The Citizen, 1986-12-10, Page 27FclTp“nsave""CLl’P’NSAVE... CLlP’NSAVE... CUP’NSAVE.,.
THE CITIZEN, WEDNESDAY, DECEMBER 10, 1986. PAGE 27.
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Tools g Equipment
HOME-FARM-CONTRACTOR
'Hoose out out A sous for future
reforeoon
□ Sanders & Saws
□ Painting Equipment
□ Post Hole Augers
□ Auto Tools
□ Compaction Equipment
□ Concrete and Masonry
[Power Trowels
Drills and Saws]
□ Hoists and Jacks
□ Ladders
□ Lawn and Garden
Equipment
□ Handling and Moving
Equipment
□ Plaster Sprayers
‘ ‘Just like a woman -- never can make up her mind! ’ seems to be the thought running through the mind of
Brent Pepper of Brussels, as he tries to get his sister Kara to make a decision on a gift at the annual
Children’s Bazaar at the Brussels United Church last Saturday. The event is sponsored by the
“Wednesday Morning Group”, which meets throughout the year to make crafts to sell at the Kids-only
event. Volunteers staff the bazaar and help wrap gifts, and only kids under 14 are allowed in to do their
Christmas shopping. All items sell for $1 or less.
Advisor says take a look
at farmland options
□ Scaffolding
□ Heaters
□ Fastening Tools
□ Saws
□ Water Pumps
□ Generators
□ Drills and Rotary
Hammer Drills
□ Grinders and Sanders
□ Miscellaneous
□ Demolition
Equipment
□ Canoes
□ Floor Sanders
□ Pavement and
Concrete BreakersMANY0THERITEMST00
NUMEROUSTOMENTJONH
Two great locations to serve you better!
NEED IT? RENT IT.
> '
** I
BY ART LAWSON
FARM BUSINESS ADVISOR
LONDON OMAF
Close to a third of the cropland in
Ontario is farmed on a rental or
share basis. The cost of renting
land may be much lower than the
cost of owning the land, but these
days it is still hard to generate
profits from crop production even
at modest rental rates.
Prices of many field crops are at
very low levels. Stabilization will
apply to the pricing of many crops.
Analysis of some farm records
shows that demands for operating
costs, fixed costsand theopera-
tor’s living will require 95 to 100
bushels of corn (at stabilized price)
per acre. At that level of yield,
there is still no money left for land
rental, depreciation of equipment
or reduction of debt principal.
My calculations are based on
averages. Each producer will have
a different situation and different
requirements. You’ll need to push
a pencil to work out your financial
needs.
The point I’d like to make is that
many producers can’t afford to pay
any rent. Every dollar in rent they
pay will be either a dollar out of
their savings or another dollar in
debt. It’s a tough situation but
that’s the way it is.
I know of a few people who were
able to get land for free last year,
but most producers are not facing
that prospect. Most landlords are
depending upon some rent as part
of their retirement income or to
cover some of the ownership costs
of their land.
What do you do if you can’t
afford to pay rent and your landlord
can’t afford to give away the use of
his land?
KNOW THE LAND YOU RENT
You may have some alternatives
in the crops you grow. The land you
have may be relatively better
suited tosome crops than others. If
your land is relatively better suited
to beans than corn, you may be best
off to shift your crop acreage that
way. This is a short term solution -
sooner or later you ’ll need to rotate
toother crop alternatives. Your
cropping experience should be
your guide. Don’t throw in big
acreages of something you’ve
never tried before.
You may have areas that are best
not cropped at all. You need about
70 bushels per acre just to pay for
cash inputs, fuel and repairs.
There may be areas that should just
be retired either temporarily or
permanently.
KNOW YOUR LANDLORD
You need to be open and honest
with your landlord. You need some
mutual appreciation of needs and
wants.
There may be some non-cash
things you can do to either
supplement or replace rental
payments. There may be services
such as snow blowing, yard and
building maintenance, firewood
and so on that you can provide.
These things have a value to the
landlord, but may be more econo
mical than a cash outlay on the part
of the tenant.
Payment terms may also be
negotiable. Can part of the rental
payments be timed to wait until
stabilization is received? Stabiliza
tion may be a major part of your
crop returns. Try to anticipate the
cash flow to minimize credit needs.
Similarly, you might agree on a
low basic rental rate but provide for
bonus payments depending upon
yields or prices above some
pre-determined levels. For exam
ple, basic rent might be $25 per
acre, plus $1.00 per bushel for
every bushel of corn yield over 120
bushels per acre.
Ifthere are windfalls, you should
plan to share some of the benefits
with the landlord if he’ll give you a
break on rental rates.
The key is mutual trust. Docu
ment your agreement. Keep in
touch through the season. Do your
best to follow the prepared agree
ment.
SHARE RENTAL AGREEMENTS
There has been a steady growth
in the number of share agreements
in recent years. There can be some
real advantages to both the
landlord and tenant in using share
arrangements.
Share crop income can qualify as
farming income for the landlord.
Cash rental does not qualify the
landlord as a farmer.
Crop received as share income
can be covered with both crop
insurance and stabilization. A
properly documented and register
ed share agreement may provide
the landlord with greater security
in the event of the financial failure
of the tenant.
The tenant benefits in reduced
cost of inputsand the sharing of
risk with the landlord. The closer
involvement of the landlord is an
advantage in keeping him tuned in
to the realities of both the
production and marketing of the
crop.
There is mutual benefit in
improved crop and soil manage
ment. A good basis for calculating
shares can provide the foundation
of a longer term rental agreement.
The coming crop year looks like a
lean one. Here are some real
challenges to both landlords and
tenants. With a little co-operation
and mutual understanding, you
can both make it through to better
times.
CLINTON
Hwy. 8 West
(519)482-3339
After Hours:
(519)482-5355
Shop Hours:
7 a.m.-5:30 p.m.
WINGHAM
Main St. N., Wingham
(519)357-1666
After Hours:
(519)357-2335
Shop Hours:
7a.m.-9p.m.
OPEN Sundays
9a.m.-9p.m.
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