Loading...
HomeMy WebLinkAboutThe Wingham Advance-Times, 1985-03-20, Page 73The Farm 1, Week at Maher 20. I83 - 13a Bank sees new realities in farm - bank relationship New realities for banking and agriculture have emerged from the economically turbu- lent 1980s that are affecting the relationship between fanners and their bankers ' in five important ` ways, according to Bank off Montreal spokesman. "We have gone though a period in which many basic business assumptions were proven wrong," Bank Vice -Chairman S. M. (Stan) Davison told an audience off farmers at the fifth .annual. FrstBank. Farm Profit Outlook Conference in London recently. "As we enter the last half off the 1980s....with a good degree of stability occurring over the last year, a new set of basic business rules appear to have emerged." One important result has been the develop- ment of a much wider range off farm banking services than have ever been available before --fixed or floating rate operating loans, building and equipment team loans, longer term mortgages, and this year a revolutionary new service account developed from sugges- tions by farmers serving on the Bank off Montreal's Agricultural Advisory Panels. The new farmer - banker realities as the Bank of Montreal sees them, said Patrick M. Moncrieff, the Bank's . Senior .Agriculture Manager, are high real estate rates and thus a high real cost of borrowed funds; low inflation; asset values trending to productive values; relatively low growth in demand for farm products; intense commodity sales competition -- all leading to continuing pressure on farm operating margins. "In times of instability and uncertainty," Davison said, "the time planning horizon of farm businesses was, of necessity, the short term While this is still true, to some degree, because of the real cost of borrowed funds, the new realities are taking hold and we are beginning to see, with confidence, a little longer -team. Hence, we can begin to think about planning our strategies for the remainder of the 1980s. These new realities, used as the central theme of this year's conference, have had five major impacts on fanner - banker relation- ships, Kouwenhoven said. The number- onesirrpact is on structure. "Agriculture is undergoing a major change in structure. There is a sorting out process going on. A smaller percentage of fanns are responsible for purchasing the largest share off farm inputs and sale off farm commodi- ties." One of the main purposes of new Commercial Banking Units within the Bank of Montreal, he said, is to "have specific expertise to service the larger commercial farm enterprise. We have staffed these ,units with more experienced and senior personnel because you want professional service." A second impact is on farm financing. The farm financial issue has become the number one farm policy issue in Canada today, Kouwenhoven said. "Governments are at- tempting to sort out where the true public interest lies... We are not looking for government protection but...for guidance on the future direction of the agricultural industry. " A third impact was on credit worthiness. Because of the effect on capacity to service debt of declining asset values, low commodity prices, and high real interest rates, he said "credit worthiness is no longer assumed, by turn to page 14a Turbulent 80s affect farm -bank relationship • Permit dual labelling for chemicals Agriculture Minister John Wise has instructed Agriculture Canada officials to amend regulations to permit the voluntary dual labeling (metric and imperial) of agricultural chemicals, including fertilizers and pesticides. "For years, fanners and fann organiza- tions have told the federal government that a metric only label on these products could be misunderstood by users," Wise said. "My colleagues and I have recognized and shared these concerns with the• agricultural com- munity.", For Quality Service and Fair Prices Call Ritchie Electric Lucknow528-3141 We Specialize in: "As a government, we believe that every effort should be made to ensure that errors in application due to metric only labeling are avoided. Therefore, like the Canadian Federation of Agriculture, the United Grain Growers and others, we believe that both measurement systems should be allowed for the labeling of agriculturalchemicals, includ- ing fertilizers and pesticides," said Wise. The Minister said he expects the amend- ment procedure will be completed in the near future and no prosecution under the current metric only regulations will be undertaken. -Electric Heating & Electric Heat Conversions -Electric Motors Sales and Service :Danor Farm Ventilation Systems Generator Sales & Service -Pole Line Construction 24 Hour Emergency Service -Free Estimates .. GENERAL Emergency Power Alternators 0111 a •r ;ti�i;••;,.", `r. eb:::ro:;p$ 'tiiaX.tx>'.F.::.., ;,'!.r•{+?f;`'S;;L};. b Y' c�... : ice.:N.,4C.:;$r;�::x?.:`.