The Wingham Advance-Times, 1983-03-16, Page 5522 •• The Fame Edition, Week of March 169 1983
a
®from page 5
And a recent provincially
funded study by the Con-
cerned Farm Women group
and the University off Guelph
indicated financial strife is
,ndeed hurting the farm
family. Group president Beth
Slumskie of Dobbinton, gave
-,speech on the Grey -Bruce
-turfy area on initial findings
saying two years of low
commodity prices and high
interest, rates have resulted
in a crisi with record levels of
bankruptcies, foreclosures
and "an atmosphere of
fear."
"Of course we all recog-
nize that the problems we
face are not limited to
agriculture. Almost every
area of the economy has been
hurt," Slumskie said. "But
we owe it to ourselves and
future farmers, and the
consumers of Canada, to
a _ %r � 1
nesse- �n , h ustry influence
ensure that the current diffi-
cult times do not result in
permanent, irreversible
damage to food producers...
We must not tolerate the
destruction of our farming
ommunity."
The farmers that are hurt -
rag most are those with the
kigh debt loads and low
quity, observers say. Those
veil established farmers with
,ighequity could make mon-
y, and some, good money,
Is the recession continues.
But the financial squeeze
•ontinues on the heavily
ndebted farmers despite re-
:ent reductions in interest
rates. Accumulation of debt
from high interest rates over
about two years still must be
paid and many commodity
prices are too low to inspire
confidence much of that debt
will be paid off.
Governments have respon-
ded with some emergency
assistance and in Ontario this
year the OFAAP (Ontaric
Farm Adjustment Assistance
Program) begun last year has
been continued. Among oth-
er things, it offers interest
rate subsidies and loan guar-
antees to banks that make
loans to financially distres-
sed farmers.
However, some activist
farm spokesmen fear a new
restrictive rider put on this.
year's loan guarantee clause
could put the assistance
program out of the reach of
farmers who need help the
most because it will make
banks more liable for bank
losses than under last year's
program. However, bank in-
dustry and government
spokesmen contend the new
rider will only make banks
scrutinize high risk loans
more carefully, not scare
them off farm loans alto-
gether.
And because of soft export
demand and world surpluses
- for grains in particular -
price prospects aren't good
in many commodities. Some
farm leaders fear that banks
will be reluctant to loan
money to farmers in trouble
for spring planting thus
causing more farm failures.
)n the affluent 1970s farm-
ers -became more dependent
on credit than ever before as
banks and governments en-
couraged expansion at a time
when interest rates were low.
In 1980 when interest rates
escalated to the 20 per cent
range, many farmers were
caught short, especially on
floating rates for operating
loans.
The credit squeeze and
eco
soft market conditions for
many crops has resulted in
government, farm and acad-
emic spokesmen calling for
more emphasis in the 1980s
on farm financial manage-
ment, a change from the
1970s when increased pro-
duction was being emphasiz-
ed.
The provincial agriculture
ministry and private farm
analysis farms have initiated
short courses in farm man-
agement for farmers that see
the necessity of honing their
management skills in a time
of belt tightening.
Many government, bank
and farm analysis feel that in
the long term agriculture will
be a healthy industry, but it's
the short term that farmers
must weather if they are to
reap the long term benefits.
Critics of financially over
112 2Lid
CIA
0
extended farmers say they
borrowed too heavily in the
cheap money days of the
1970s, which many finan-
cially squeezed farmers will
admit. But the lending insti-
tutions themselves aren't
being let off the hook.
Bob Delano of Virginia,
president of the conservative
American Farm Bureau Fed-
eration of the United States,
this month told the annual
meeting of the Canadian
Federation of Agriculture in
Ottawa a story, familiar to
Ontaria farmers, about "too
liberal" 1970s farm lending
practices by banks. •
"1 had a neighbour who
went to borrow $100,000 to
build a pig barn and the bank
said, °You don't need
$100,000, you need
$200,000.' My neighbour
went bankrupt."
—The London Free Press
Commodities
designated
under plan..
•from page 5
ed area. Other commodities
can be designated for sup-
port at the government's
discretion.
During the past year, said
Whelan, there were pro-
grams for two named com-
modities, sheep and soy-
beans. During the past few
years we have had stabiliz-
ation programs for apples
and sour cherries in 1980;
greenhouse cucumbers in
'79-80 and potatoes in 1978
and 1979.
Earlier this week Whelan
announced a $2A million
stabilization program for
sour cherries and a $1,3
million program for green-
house cucumber and tomato
producers.
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