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The Lucknow Sentinel, 1985-03-20, Page 53The Farm Edition, Week of March 20, 1985 - 5a f - Bank official says causes of farm pressures hereto stay By Sharon Dietz 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 . Ludmow recently told area farmers these are normal times and if fanners are relying on a drange'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 Reagan's policy to President Ronald Reagan's nudi maligned plan to dismantle U.S. farm_ support -. programs is causing nervous twitches north of the border as Canadian farmers realize their inoomiies stand to suffer from the fallout. Canadian govemment offidaLo and experts • - in the field readily admit that Reagon's plan to "wean" U.S. fanners from costly programs that support prices for such products as wheat, soybeans and Dorn could .. .cut deeply into the incomes of 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 of modem situation. "tln the pressures of the modern situation, the work ethic, work -a little harder and a little more, while it was valuable historically and iit is traditionally a part of farming, it is not working, today," observed Bill Bearss, manager of the Royal Bank agricultural services. In the 70s there was margin fir error but they were unique times, said .Beams. In the 40s and 50s you couldn't make mistakes and survive. • ., "These are normal times," BearSs told about 50 farmers attending the thcknow District Co-op fmnaneial workshop Fbbruary 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 farmers after an assessment of their operation, banks want to do business with farmers, Bearss. The dollars are there for • . qualified borrowers and the compassion is there for those in trouble. Look around you, Bearss told the farmers, there are people with high debt load who are making a profit. Even in these tough times, . there have been fanners who have percolated up through the industry and they have made profits, remarked Bearss. • He asked those at the workshop to think .about why one farmer carrying a heavy debt load is able to make it; while another fanner with a much -smaller debt load is -forced under. • One farmer at the workshop commented he had once been told "if you have more money tied up outside the barn than inside the bam, you'll never make a go of it." Bearss said financial management makes the difference. Farmers who do • not make it are slow to read to negative situations, slow to identify a problem and react too little and too late to be effective.. There is no replace- ment for good financial and • production records, he stated. Good financial and production records require organization, regular maintenance which takes discipline and consistent figures which ate understandable to the fanner. • Good records can be used to take action to make change, said Bearss. Sound financial management permits better planning .for the short and long teen and prepares a farmer for a down cyde:.It-also allows monitoring of the situation; when compared to your plan. • Banks were remiss until the mid 70s, said Bearss, because, they did not follow up to showpeople how to use the money they were tura to page 6a dismantle farm support programs threatens "farmers agricultural products, inducting wheat and Schnittker, a Washington -based' agricultural artificially high prices, many fanners still other grains. consultant. cannot cover their costs in the face of high If those prices are inflated because of the A ainst this backdrop is .the n f interest rates and plunging land values. . complex web of support programs dating to g p B ear nyW The cumnent s ort of activityb Co the Depression, they are destined to fall as „ that should the strong U.S. dollar begin to spurt c ogress to drop beside its Canadian counterpart, the provide beefed . m emergency loans to crop loans and cash subsidies to U.S. farmers competitive advantage enjoyed y a b fanners in time for spring planting is reoogni- are reduced or stripped away. Cam's' tion of the problem. Reagan has already been American farmers will be spurned to °off will shrink forted to ease credit terms ,for his $650 -mil - produce more to make up for lost income, The subject could be toothed on • at • the lionrelief program, but he is expected to veto thereby flooding the world market and further. Manch 17-18 meeting between Reagan and congressional efforts to add money to the • depressing prices. ' Prime Minister Brian Mulroney in Quebec package. It is a worrisome prospect for farmers in ' City, but the more likely forum is a meeting Regardless, the battle over short-term . Canada, as well as their counterparts in between Agriculture Minister John Wise and relief has pushed the debate over long-term Argentina, Australia and Europe,: who know his U.S. counterpart, John Block, in April. ` farm policy. into the national spotlight. • the prices they command are "influenced, if A major sticking point in the debate so far The Reagan plan is part of a move to reduce not determined" by U.S. prices, said John is that even if existing U.S. policy has led, to the $200 -billion U.S. federal deficit. • AND EVERYTHING I:N BETWEEN Today, many people know about Kubota mid-size tractors. But few are aware that . Kubota's roots date back to 1890. Since .-then, Kubota has grown to be one of the largest manufacturers of agricultural equipment in the world. With dealers coast to coast, Kubota has become a well established name, synonymous with economy, dependability and durability. 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