Loading...
The Rural Voice, 2003-11, Page 8CANADIAN CO-OPERATIVE WOOL GROWERS LIMITED AP AM: 4b4 - Now Available WOOL ADVANCE PAYMENTS Skirted Fleeces Well -Packed Sacks For more information contact: WINGHAM WOOL DEPOT John Farrell R.R. 2, Wingham, Ontario Phone/Fax 519-357-1058 4 THE RURAL VOICE Keith Roulston Let's not have a sequel to the '80s Keith Roulston is editor and publisher of The Rural Voice. He Imes near Blyth, ON. History does repea itself but it tends to come back dressed a little differently each time around. This summer the combination of the crisis in the cattle industry from vanished export markets after the BSE discovery in Alberta and some distrurbing news about climbing farm debt had me thinking back to the terrible days of the early 1980s when high farm debts, soaring interest rates and depressed cattle and crop prices created a crisis in rural Canada. Like many people back then I watched the anguish as longstanding farm families around me got into financial trouble but I was a little closer than many bystanders. As part of the research for a play Anne Chislett and I wrote called Another Season's Promise, I talked to some of these families and heard their stories first hand. I can still feel the pain that came across in the interviews. So I was disturbed this summer to read an article by Barry Wilson that showed Canadian farm debt had ballooned to $44 billion at the end of 2002, 87 per cent higher than nine years earlier. For more than a decade following the 1980s crisis farm debt had stayed relatively stable at about $20-$23 billion. It recalls the period from 1977 to 1983 when farmers heeded the call from government advisors and bankers to expand and specialize, even if it meant borrowing money to do so. The problem was, of course, that inflationary times led to soaring interest rates. When interest rates topped 20 per cent, farmers found the debt they'd thought they could ser- vice, and were assured they could by the "experts", suddenly was eating up all their income. Then drops in both cattle and cash crop prices made the problem worse by reducing income. The different picture for farm debt this time is that interest rates and inflation have been stable at a rate that's a fraction of what the country faced in the early 1980s. There seems little danger of the kind of soaring rates that turned the world upside- down for borrowers two decades ago. What's new this time, however, is the soaring Canadian dollar which has effectively cut 15 per cent off the price of those products that are exported from Canada (beef producers could only wish to have exports). Like interest rates 20 years ago, this is an important and uncontrollable factor for farmers who think they'll be able to handle a certain proportion of debt. And of course also uncontrollable are external forces like trade issues. from disease like BSE to U.S. domestic politics which can overnight throw up barriers at the border, crushing prices. Whether it's overt trade issues like tariffs on wheat exports or more subtle efforts like country of origin labelling, the ability to carry large amounts of debt can change instantly by the decision of someone beyond our borders. The other interesting development in the latest figures is that more than half the debt is non -mortgage obligations such as line -of -credit borrowing. "In many ways, this illustrates the problem in agriculture, that farmers are borrowing against their equity just to pay the bills — just to put groceries on the table" said Bob Friesen, president of the Canadian Federation of Agriculture. Government and lenders insist the debt isn't a problem, that it just indicates farmers are confident and investing. There's no doubt they are — that a younger generation has put the trauma of the 1980s behind them and grasped the mantra of expansion and specialization. This can be good because you don't want to live in fear of the past forever. But here's hoping that circumstances don't conspire to make today's confident borrowers suffer like their predecessors. I don't want to write a sequel to Another Season's Promise. 0 J.R. FARMS EAST FRIESIAN DAIRY SHEEP 4 o yam, 7y , ,} t Ali �t o- Breeding Stock and FI crosses > Milk production records available > Closed Flock, Maedi -Visna OPP - negative > Economically priced BILL AND LAURA MCKAY RR 2 Tavistock, ON NOB 2R0 (519) 462-1446 e-mail: jrdairysheep@execulink.com CANADIAN CO-OPERATIVE WOOL GROWERS LIMITED AP AM: 4b4 - Now Available WOOL ADVANCE PAYMENTS Skirted Fleeces Well -Packed Sacks For more information contact: WINGHAM WOOL DEPOT John Farrell R.R. 2, Wingham, Ontario Phone/Fax 519-357-1058 4 THE RURAL VOICE Keith Roulston Let's not have a sequel to the '80s Keith Roulston is editor and publisher of The Rural Voice. He Imes near Blyth, ON. History does repea itself but it tends to come back dressed a little differently each time around. This summer the combination of the crisis in the cattle industry from vanished export markets after the BSE discovery in Alberta and some distrurbing news about climbing farm debt had me thinking back to the terrible days of the early 1980s when high farm debts, soaring interest rates and depressed cattle and crop prices created a crisis in rural Canada. Like many people back then I watched the anguish as longstanding farm families around me got into financial trouble but I was a little closer than many bystanders. As part of the research for a play Anne Chislett and I wrote called Another Season's Promise, I talked to some of these families and heard their stories first hand. I can still feel the pain that came across in the interviews. So I was disturbed this summer to read an article by Barry Wilson that showed Canadian farm debt had ballooned to $44 billion at the end of 2002, 87 per cent higher than nine years earlier. For more than a decade following the 1980s crisis farm debt had stayed relatively stable at about $20-$23 billion. It recalls the period from 1977 to 1983 when farmers heeded the call from government advisors and bankers to expand and specialize, even if it meant borrowing money to do so. The problem was, of course, that inflationary times led to soaring interest rates. When interest rates topped 20 per cent, farmers found the debt they'd thought they could ser- vice, and were assured they could by the "experts", suddenly was eating up all their income. Then drops in both cattle and cash crop prices made the problem worse by reducing income. The different picture for farm debt this time is that interest rates and inflation have been stable at a rate that's a fraction of what the country faced in the early 1980s. There seems little danger of the kind of soaring rates that turned the world upside- down for borrowers two decades ago. What's new this time, however, is the soaring Canadian dollar which has effectively cut 15 per cent off the price of those products that are exported from Canada (beef producers could only wish to have exports). Like interest rates 20 years ago, this is an important and uncontrollable factor for farmers who think they'll be able to handle a certain proportion of debt. And of course also uncontrollable are external forces like trade issues. from disease like BSE to U.S. domestic politics which can overnight throw up barriers at the border, crushing prices. Whether it's overt trade issues like tariffs on wheat exports or more subtle efforts like country of origin labelling, the ability to carry large amounts of debt can change instantly by the decision of someone beyond our borders. The other interesting development in the latest figures is that more than half the debt is non -mortgage obligations such as line -of -credit borrowing. "In many ways, this illustrates the problem in agriculture, that farmers are borrowing against their equity just to pay the bills — just to put groceries on the table" said Bob Friesen, president of the Canadian Federation of Agriculture. Government and lenders insist the debt isn't a problem, that it just indicates farmers are confident and investing. There's no doubt they are — that a younger generation has put the trauma of the 1980s behind them and grasped the mantra of expansion and specialization. This can be good because you don't want to live in fear of the past forever. But here's hoping that circumstances don't conspire to make today's confident borrowers suffer like their predecessors. I don't want to write a sequel to Another Season's Promise. 0