The Rural Voice, 1987-10, Page 37NEWS
(coned)
Grant Collins, BCFA president,
then asked for ideas for improvement.
The dairyman who spoke first at the
meeting said that he at one time paid 22
to 24 per cent interest on a loan to buy
beef cattle. When he sold, he was deeper
in debt than before. He suggested that
the FCC write debts down to the present
market value or get interest rates down.
He added that FCC staff have told him
that he is a good manager.
Jack Wilkinson said that, despite
statements by the FCC, the Farm Credit
Act gives the FCC power to write down
debts and lower interest rates. He criti-
cized the lack of unity among farmers
which dilutes the pressure that the OFA
can put on the authorities.
Brian Ireland, in defense of the FCC,
said that the corporation knew that rates
were high but didn't expect values to
drop.
Suggestions from the floor in-
cluded:
• that interest rates be lowered when
a farmer is unable to pay,
• that property be re-evaluated and a
loan adjusted so that interest applies to
the lower value,
• that 10 per cent or more be taken off
all loans,
• that interest be based on productive
value (this suggestion was deemed
unworkable because productive value
may be less than zero and fluctuates
from year to year — although it could
work in the long run).
Most of the audience disagreed with
the OFA policy that calls for rates of two
to three per cent above inflation as they
feared that inflation could rise a ,ain.
There must be a ceiling, it was noted. A
majority supported the figure of half the
prime rate with a maximum rate of eight
per cent.
Farmers in the audience also fa-
voured a maximum length of time for a
mortgage of 29 years rather than the
present 10 years. In addition, they sup-
ported separate mortgages for land and
for buildings.
It was agreed that if the review board
recommends a write-down of principal
it should be implemented, and that it is
reasonable to write a loan down to the
level that the FCC would get if the farm
were sold. The FCC then wouldn't
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OCTOBER 1987 35