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Home My WebLink AboutClinton News-Record, 1985-3-20, Page 41`bele bar HERMAN AUCTIONS Give Us A Try HOME AND FARM CONSIGNMENT AND ESTATE SALES Competitive Priced! Herren Herbrink Dial 881-3763 WALKERTON 524-2117 ALEXANDER it CHAPMAN REALTY LIMITED 10 The Square • Goderich 25 ACRES near Holmesville on Highway No. 8. House, barn, driving shed and garage. 72 ACRES - Highway 21. EXCEPTIONAL HOUSE, barn & shed. Close to lake. 100 ACRES with buildings, near Luck now. 100 ACRES cash crop, near Lucknow. Memiier'of the Huron Real Estate Board A.J. Alexander 524.7836'.:; Gus Chisholm 524-855.4::' Murray Rourke 524-2569 .1. Roger Turcotte 524-7298 Farmers react cautiously to federal white paper • By BBy Raady'1furendyle Lock farmers arra taking a cautious reaction to Flamm Minister Michael W il$01es recent- ly ecently released federal white paper called Tax Issues in Agriculture. When the report was released in late February, it caused a stir in the fanning community and the media. Figures from the report suggested farmers were nine times more wealthy . than the average Canadian, earned twice as much per year, and paid only one quarter the income tax of the average Canadian. - The major concern expressed by most local farmers revolves around those statistics and how they were interpreted. The report was prepared by the finance department at the request of the finance minister in order to help create new tax policies for farmers. The concern eagmressed by many farmers and by the minister in published newspaper accounts is that the statistics in the report are out of date and do not accurately represent the state of farming income today. Most off the figures used in the report were taken from a Farrn Credit Corporation Survey completed last fall. The most recent figures in that survey were taken in 1981 when the inflation rate was high and land was more expensive than it is today. The report suggests that the average farm was worth $508,000 of which $417,000 or 82 per cent is debt free. It compares that figure to the net wealth of the average Canadian which is pegged at $47,000. Wayne Robinson, a Port Elgin area fanner and president of the Bruce County Federation of Agriculture, says the report makes a mistake when it attempts to compare the net wealth of farmers to individuals. Robertson suggests that fanns should be compared to small or medium sized business- es. lie also took exception to the equity figures. "Equity isn't tame wealth unless you sell the farm." Gary Gurbin, Baum -Grey MP says the paper is not a statement of government policy, but is designed to provide a basis for discussion. "Recent newspaper reports have created a controversy by misinterpreting the statistics and the purpose of the paper. Unfortunately the most recent statistics available in many instances were from 1981," he says. Gurbin says there have been significant changes in land values and equity in farm operations in the last three years. He says Finance Minister Wilson, "has n� illusions about the figures ie the report, but hi many cases they were the most up to date figures available." Me finance department intends to get more information from fanners and farm groups before any recommendations are made in the federal budget expected sometime this spring, says Gurbin. The finance department is considering several proposals for the budget but wants to know which ones farmers consider to be "top priority" , before making a decision, says Gurbin. "We can't do everything at once." Of the proposals now before the finance department, a reduction in fann capital gains tax appeared to be the most likely tax reform, Robertson says the federation is taking a cautious approach to the white paper and plans to make a written response to it some- time this month. He stresses the need for storage comodity prices to solve the long term problems in agriculture. "One thing the report does point out is the constant and continual decline in farm income," says Robertson. Interpretation of paper shocking The interpretation of the figures in the federal government's white paper on tax issues in farming, and further misinterpre- ations in the news media are shocking and appalling, according to the Ontario Federa- tion of Agriculture (OFA). From an emergency executive meeting held in Toronto on February 25, OFA president Harry Pelissero said, "While figures don't lie, interpretations may vary." He said the white paper, prepared at the request Of Finance Minister Michael Wilson, is "one sided and not current." ' `For instance, in discussing the decline in land values, the white paper stops at 1981. Since then, land values have plummeted, especially in western Canada where they were hit by drought." "Some of the comparisons used in the study and reported in the media are illogical," Perlissero said. "To compare the worth of the average farm to the worth of the average Canadian family is comparing apples and oranges. It would be more credible to show a business to business comparison." The white paper's figures on the rate of return on equity may look good on paper, if it's interpreted to be 19.3 per cent for the years between 1975 and 1983, "But farm groups aren' t talking about the golden days of the seventies. According to the tables in the 0 white paper, for 1982 and 1983, fanners have been losing on their equity. The crisis has been in recent years, Pelissero said. Another illogical comparison, Pelissero said, is between the value of farm land and trading stocks. "The fact that the value of rural real estate has increased means noth- ing. A farmer can't dump his business as easily as he could shares on the Toronto Stock Exchange. Equity, or paper value, doesn't put the kids through school or put shoes on their feet," Pelissero said. In addition, Pelissero said, the white paper shows that in 1982 and 1983, the nominal value of lands and . buildings declined significantly. "Once again, these are the, crisis years, and the severity of the problems is diffused when the interpretations incorpor- ate figures from 1972. The white paper's interpretations should not be read in isolation, and the contents of the 64 page document cannot accurately be summarized in a brief news story, Pelissero said. "The Fann Credit Corporation did a thorough study on Canadian farmers which showed that 17 per cent are in severe financial stress, seven per cent are in moderate distress and the remaining 76 per cent are more stable because they have the minimum equity needed to give them a reasonable chance to survive in agriculture." "This is a far cry from the white paper's interpretation that only 3.2 per cent are in the distress ' category. .The contradiction in figures, both from government departments, proves only that there is no definitive statement on what his happening in the farm sector. As president of an organization that represents over 24,000 farm families, I can Only say that there is more than enough cause turn to page 27 kOf]V R,:&F '.11 PIONEER. SEED CO:RN -3906 -3803 3925 3950 -3949 PIONEER® B:iAND • SOYBEAN GEED SOYBEANS 1282 .087 7 PIONEER BRANDALFALFA SEED ALFALFA °532 -524 -526 - Fanners call and check out the good prices on Alfalfa this year. Ray Brown R. R. 6, Goderich" 529-7260 PIONEER. BRAND • SEED COFIN Pioneer le a brand name; numbevs identity varieties. Reglatered trademark licensed to Pioneer HI -Bred Limited Chatham, Ontario LOOKS EXPENSIVE. :!:rt6'ptiti$�:'i,?:i>i?:!:\.C,jiee•,y\��`:.��A,';r,: �v);:� +:v:.:!:.. LOOK AGAIN. LIST OF STANDARD FEATURES 1986 MAZDA B2000 I 1985 TOYOTA PRICE $7675' $7998° S SPEED OVERDRIVE STD 1985 NISSAN $7694* NA STD STEEL.aELTEO RADIALS STD NA STD TINTED GLASS STD NA NA INTERMITTENT WIPERS STD NA. NA DUAL DOOR MIRRORS STD NA OPT AM -FM RADIO STD OPT OPT 1VEAR SERVICE PROTECTION PLAN STD OPT OPT 1986 MAZDA B2000 x7675* M -W MOTORS LTD. 184 East St. Goderich 524-2113 ��r