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The Rural Voice, 1987-05, Page 12c et CARE • Upholstery • Drapery • Rug Cleaning Serving Huron Coun y Doug Gavin 519-524-2440 HAY IMPROVING MONEY MAKER Less feed supplement Crude protein saving. Improves crude protein. Low operating cost. Electronically balanced. Quiet running. Centrifugal fan. 5 H.P. motor at 1 1/2" SP =15000 CFM. 71/2 H.P. motor at 1 1/2" SP =18500 CFM. 5 H.P. axial at 1 1/2" SP = 14800 CFM. ALSO GRAIN AERATION FANS Contact: A.J. HAUGH EQUIPMENT LTD. Brucefield, Ont. 519-527-0138 10 THE RURAL VOICE AN IDEA WHOSE TIME HAS COME AGAIN? There is probably no longer -run- ning disruptive relationship in society than the one farmers have with banks. New chapters are written every day. The stormy history of farmers and banks has been in its worst squall since the dirty depression in the 1980s. It started with high interest rates, was exacerbated by low prices for commodi- ties, and was little less than guerrilla warfare when banks began foreclosing to regain huge debts owed by farmers and farmers started fighting back. Farmers have won most of the skir- mishes in the courts. The banks conti- nue to win the war on a broad front. New problems have arisen this spring because some farmers haven't been able to get the financing to plant their crops. Banks continue to threat- en to withdraw from farm lending alto- gether if they don't get to do business on their terms, if farmers manage to persuade government to give farmers more protection in their uneven deal- ings with banks. All of which brings the idea of a farm bank back into discussions. At a recent meeting of the Huron County Federation of Agriculture, Larry Ryder, the Port Elgin lawyer who has fought in many of the farm legal battles in recent years, spoke of a farm bank as one way to keep other banks in line. It isn't the money the banks could lose if they don't have farm loans that matters; it's the loss of deposits from farmers and other rural residents that could do them in. The reason is that the banks make money by taking your money and loan- ing it to other people. Government regulations say that a bank can only loan money in proportion to the sum it has borrowed from customers. Banks are required to keep 10 per cent of their borrowings on deposit and can loan out 90 per cent. The more money they have on deposit, the more they can loan, and the more they can make. Reduce the size of their deposits and profits fall. Eugene Whelan, as a farmer and a farm leader in such things as co-ops and the Federation of Agriculture, was an early supporter of a farm bank. "I'd dreamed about a farmers' bank ever since I'd first entered politics — a rural bank that understood rural agricul- ture," he writes. "As it was, we did the best we could through the Farm Credit Corporation." He goes on to say that the FCC acted too much like a bank when he first came to office, bragging that it had never had a loss, which proved to Whelan it wasn't taking enough risks. Mr. Whelan's comment, though, shows that even if a farmers' bank were founded, it would likely have shortcomings. We'd probably see the same thing happen that has happened in other farm -owned organizations like the major co-operatives. After a while it can be hard to tell the farmer -owned businesses from the other businesses. For one thing, the people running the organization are probably class- mates from the same business schools as those running the other companies. For another, the farmer -owned busi- ness usually ends up following the same trends as the other businesses — such as making its headquarters in Toronto. Once in the big city, mov- ing with other big bankers every day, how long can a farmer -owned bank keep the ideals it set out with? Still, the idea of a rurally owned bank is one whose time may have come. The gap in reality between urban -based banks and rural life is widening daily. As Mr. Whelan says, it is better for farmers to help themselves, to grab hold of their destiny, than to be victims at the hands of urban financiers. A farmer - owned bank would be in the tradition of many other steps farmers have taken over the years to be self-reliant.0 Keith Roulston, who lives near Blyth, is the originator and former publisher of The Rural Voice.