HomeMy WebLinkAboutClinton News-Record, 1985-3-20, Page 63Bankofficial says causes aff
By Sharon Dieu
Farmers have traditionally relied on
historical cycles in their industry, a trust that
time will correct the problem and if you work
a little harder and longer hours and increase
production, things will improve. This reliance
on historical cycles has prompted some farm-
ers today to believe the tough times fanners
are facing now will dissipate when the cycle
starts an upswing.
But a Royal Bank official speaking at a
financial workshop in Luc know recently told
area farmers these are normal times and if
farmers are relying on a change in the cycle to
bring back the good old days, they should
think again.
"While it was valuable historically and the
• work ethic is traditionally a part of farming,
farming, this is not working in the pressures
of modem .situa�t�i�oAn,• p yy {�� opt:
"In the pr ureS of M f F Nit ,
the wolitethic, woriialittle harder and pude
more, while it was valuable histtiricallyad '
is traditionally a part of farming' it., int
working today, °' .. obseived Bill lam,'
manager of the lioyal Bank agricultural
services.
In the.70s there was margin for error but
they were unique times, said Hearns. In the
40s and 50s you couldn't make mistakes and
survive.
"These are normal times," Beams 'told.
about 50 farmers attending the Iudurow
District Co-op financial workshop February
28. `All of the causes and pressures to create
a situation of imbalance in a farming opera-
tion are with us to stay."
Despite what you read and the pressures on
some fanners after an assessment of their
Wank.',Witless with
ry le dols are the for
ilualifiect.bOutowera and the compaasion is
there for . . in trou t
tookarmnmd rut Beams told the femme,
there are people withhigh. debt load who are
making a profit. Evert in these tough cirrus,
there have been fentners who haw per »lat€d
up through the industry; and they fiave made
profits, remarked Bearss.
He asked those at the workshop to think
about why one fanner carrying a heavy debt
load is able to make it, while another fanner
with a much smaller debt load is -forced
under.
One fanner at the workshop continental he
had once been told "if you have more money
tied up outside the bar than inside the bam,
you'll never make a go of it."
Bearss said financial management makes
Slow to react to t if'
"to i ilf ' a "per and a et too.
too late to be effective,. Theis iao Mime.
met for good financial and production
records, he Mated.
+;rood financial and pmduc ion records
require" organization, regular tnainte anoe
° whicli'takes discipline and consistent figures
which areunderstandable to the farmer.
Good records cern be used to tie action to
make change, said Bearss. Sound frnaneial
management permits better planning for the
short and long tern and prepares a fanner for
a down cycle. It also allows monitoring of the
situation, when cowered to your plan.
Banks were remiss until the raid 70s, said
Beams, because they did not follow up to
show people how to tise the money they were
tum to page 6a
Reagan's policy to dismantle farm support programs threatens farmers
President Ronald Reagan's much maligned
plan to dismantle U.S. farm support
programs is causing nervous twitches north of
the border as Canadian farmers realize their
incomes stand to suffer from the fallout.
Canadian government officials and experts
in the field readily admit that Reagon's plan
to "wean" U.S. fanners from costly
program that support prices for such
products as wheat, soybeans and com could
cut deeply into the incomes off farmers in
Canada and elsewhere.
The main reason: U.S. prices tend to
become the world price because the United
States is the largest world trader in most
agricultural products, including wheat and
other grains.
If those prices are inflated because of the
complex web of support programs dating to
the Depression, they are destined to fall as
crop loans and cash subsidies to U.S. farmers
are reduced or stripped away.
American farmers will be spurred to
produce more to make up for lost income,
thereby flooding the world market and further
depressing prices.
It is a worrisome prospect for farmers in
Canada, as well as their counterparts in
Argentina, Australia and Europe, who know
the prices they command are "influenced, if
not determined" by U.S. prices, said John
Sdmittker, a Washington -based agricultural
consultant.
Against this backdrop is the nagging fear
that should the strong U.S. dollar begin to
drop beside its Canadian counterpart, the
competitive advantage enjoyed by Canadian
exports will shrink
The subject mould be touched on at the
Mardi 17-18 meeting between Reagan and
Prime Minister Brian Mulroney in Quebec
City, but the more likely forum is a meeting
between Agriculture Minister John Wise and
his U.S. counterpart., John Block, in April.
A major stiding point in the debate so far
is that even if existing U.S. policy has led til
artificially high prices, many farmers still
cannot weer their costs in the face of high
interest rates and plunging land values.
The current spurt of activity by Congress to
provide beefed up emergency loans to
farmers in time for spring planting is recogni-
tion of the problem. Reagan has already been
forded to ease credit terms for his $650 -mil-
lion relief program, but he is expected to veto
congressional efforts to add money to the
package.
Regardless, the battle over short-term
relief has pushed the debate over long-term
farm policy into the national spotlight.
The Reagan plan is part of a move to reduce
the $200 -billion U.S. federal deficit.
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