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The Citizen, 1987-09-23, Page 20PAGE 20. THE CITIZEN, WEDNESDAY, SEPTEMBER 23, 1987. anks change attitude, FCC problems remain After nearly a year of the Farm Debt Review Boards (FDRB) the attitude of banks has changed, George McLaughlin, chairman of the Ontario FDRB told about 40 people in Clinton last week but the problems with the Farm Credit Corporation continue. More and more creditors, Mr. McLaughlin told the September meeting of the Huron County Federation of Agriculture, are coming to the realization that their money is already lost. If a creditor is going to seize a farm and sell it, he can only expect to get the present market value of the property, less the costs of selling and seizure and he may be stuck with the land for a while. Creditors are realizing that if you’re going to take a farm and sell it to someone else for the price then they might as well agree to a write-down of debt with the current owner and leave him on the land. Leaving a farmer on his land is only viable, however, hesaid, if there is enough cashflow to service the restructured debt. The panels that help negotiations between a Farm Directors chosen Regional Directors and voting delegates and alternates to the annual convention of the Ontario Federation of Agriculture in Tor­ onto in November were elected at the Regional Annual Meeting of the Huron Federation of Agricul­ ture, held in Clinton on September 16. Elected personnel, by regions, are as follows: Huron East Central (Morris, Hullett and McKillop Townships) - Regional Director, DougGarniss, RR4, Wingham; Delegates - Larry Plaetzer, RR 1, Auburn; Bert Sanders, RR 4, Brussels; Allen Cardiff, RR 5, Brussels. Alternate delegates are Leor. Maloney, RR 1, Dublin, and Bill Murray, RR 5, Seaforth. Huron North West (East and West Wawanosh, Ashfield and Colborne) - Regional Director, Chris Palmer, RR 5, Wingham; delegates - Ralph Scott, RR 3, Blyth; Tony McQuail, RR 1, Lucknow; and Jerry Jaretzke, RR 5, Wingham. Alternates are John Gaunt, RR 1, Belgrave; Donald Dow, RR 3, Wingham; and Walter Elliott, RR 1, Lucknow. Huron North East (Grey, Howick and Turnberry) - Regional Direc­ tor, Robert Harrison, RR 1, Monkton; delegates - Murray Crawford, RR 3, Brussels; Will Stafford, RR 1, Wroxeter; and Jim Mann, RR 1, Monkton. Alternates are Keith Williamson, RR 3, Walton and John Underwood, RR 1, Wingham. Huron West Central (Goderich, Tuckersmith and Stanley) - Re­ gional Director, Hank Binnedyk, RR 2, Kippen; delegates - Wayne Elliott, RR 2, Goderich; Brenda Macintosh, RR4, Seaforth; and Jim Macintosh, RR 4, Seaforth. Alternates are Jim Papple, RR 4, Seaforth; and Stanley Johns, RR 4, Seaforth. Huron South (Hay, Stephen and Usborne) - Regional Director, Paul Klopp, RR 3, Zurich; delegates - MikeOndrejicka, RR 1. Exeter; Teresa Van Raay, RR 3, Dash­ wood; and Matt Muller, RR 2, Creditor!. Alternates are Gary Baker, RR 2, Dashwood and Hugh Rundle, RR 1, Centralia. farm and his creditors, must work to see that he will have enough credit for planting, etc. The FDRB plans follow up with farmers it keeps on the land at three month, six month, one year and perhaps longer intervals to make sure its solutions work. Iftheydon’t, he said, the panels had better know so they won’t put more farmers into the same fix. But although banks seems to be coming to a more realistic view­ point, he said, the FCC is still a big problem although “compared to last February the FCC is great.” The problem with FCC is not with the people on the ground but with the constraints put on by the head office in Ottawa, he said. “Right now they’re pretty tight because of the lack of money. They’re way over their budget.” That’s why, he said, FDRBs are now fighting to get more money allocated to FCC from the minister. “FCC won’t forgive principal,” he said, “but they will do a lot of things with interest.” These steps may accomplish the same thing over a period of five or 10 years. I I LET THE COOK’S TEAM HELP YOU MAKE PLANS FOR YOUR WINTER WHEAT AND FALL ALFALFA FERTILIZING PLANT YOUR WHEAT FOR THE SAME COST AS SPREADING YOUR FERTILIZER! Our 2 Air Flow Dry Sprayers are capable of doing both jobs at the same time. SOIL TESTING SERVICE AVAILABLE AtCook’swehavea completesupplyof: WINTERWHEAT: •Augusta •Frederick •Frankenmuth *Harus [Bagged or Bulk] WINTERCANOLA: •Tandam •Glacier ^Crystal -ALSO Fall Application of ATRAZINE or ROUND-UP "It's the way we work. Together, we each do our best so that we can do the best for you. We pride ourselves on giving our customers personalized attention and prompt, courteous service. K ■ A Division of Gerbro Inc.l llIlK ^k WALTON BRANCHWVl\ W 527-1540 Walton, Ontario 887-9261 He said there is a tremendous amount of pressure on the federal government to refinance the FCC to get it back doing the proper job it is supposed to. The government has given the corporation a small fund to cover farm losses but this is being quickly eaten up he said. Another problem is that there is a provision that says the FCC can’t hold land for more than five years. This prevents deals being struck whereby the FCC could take over a farm then lease it back to the farmer at a nominal rate with the option that he can buy the land back in the future. Because FCC mustn’t hold land for more than five years, it can’t make agree­ ments with farmers for more than about three years in order that it will have time to sell the land before the five year period is up. If they haven’t sold the land in five years they must give it away, he said. Mr. McLaughlin said the pro­ cess of farm debt review has speeded up greatly since last December when the backlog was about three months. The three- person review panels must be made up of one board member, a farmer from the same or like commodity and a member with farm finance experience who could be a farmer with a background in a very good financial program or someone like a retired bank manager with farm finance back­ ground. The requirement that one board member be on each panel caused the backlog, he said, because last December there were only three board members. Today, with an expanded board, it takes about three days from the time the board receives a notice of seizure of a farm property, until the paperwork is completed and the investigation leading to the hearing proceedings gets underway. One of the differences between the activities of the Ontario Board and the Alberta Board is that in Ontario the panel must visit each farmer before the formal hearing and view the operation and talk to members of the family about the situation and what they would like to see happen. Afterward the panel meets with the creditor or creditors to see what they want to do. In the early days of the process, he said, creditors were inclined to say the farmer was no good and they might as well seize the assets, but discussions with banking groups had convinced them that if they threw a lot of land on the market it would depress prices, the bank wouldn’t get enough to cover the debts and by driving land prices down a whole new group of farmers would be put in trouble. Whenever possible, he said, the aim of the panels is to keep the farmer on the land if he wants to stay on the land. Some don’t want to stay and if the farmer doesn’t want to stay or if the panel sees little hope in the farmer being able to continue, then the aim is to get a good exit package for the family: enough cash for a house in town or an agreement to sever off the house from the farm or a leaseback agreement to let the farmer live in the house. Seeing the exit package, he said, many farmers are happy to get out from under the problem but “What do you say to them when they say ‘You mean to say I have to leave this farm after three genera­ tions?’ ” Manyfarmershave atremen- dous resistence to changing their operations, hesaid, and don’t want to go along with the recommenda­ tions for changing their manage­ ment that the panel proposes. In some cases the farm records were so poorly kept that the panel could see little chance of the farmer being able to change his manage­ ment system enough to survive even if debts are written down. But about 50 per cent of the applicants, he said, are “darned good farmers, about as good as they come in their neighbourhood, farmers who made the wrong decision at the wrong time. If somebody could have told them that the year after they borrowed that interest would go up to 22 per cent and that two years later commodity prices would go down, they wouldn’t have done what they did. “If it wasn’t for that, I don’t think I’d be in this business. I believe there are a lot of good farm leaders who need help.”