The Rural Voice, 1979-12, Page 33A farm business
agreement made easy
BY MEL CHAMBERLAIN,
Agricultural Representative,
Wellington County
You say - a farm business agreement can
be made easy? Perhaps a misleading
statement - but there are some things you
can do to make it easier.
Let's talk about a very common situation
- a farm family wishing to bring a 20 year
old son into the business. Son has probably
worked for Dad for a year or two and
received wages. His interest is sincere and
father and son seem to be able to get along.
How do you give son more responsibility, a
share of the income and some idea of what
the future holds? These points may make it
easier.
•Talk about it - as a family, to clarify the
wishes of each other. Decide if income is
sufficient for the possibility of two families.
If not, can the farm business be enlarged to
increase the income sufficiently?
•Think about a farm business agree-
ment. Keep it simple! Talk to your
accountant and lawyer to help you decide
what is best for you.
•Son will probably wish to own assets -
sell or give him some. A breeding herd
appreciates in value. You can sell son part
of the herd and take a demand note back.
He can pay for the livestock over a period
of years. Farmers on the cash basis declare
income or expenses when payments are
made. As the son makes payments on the
note, he has a current expense and the
father has a current income.
Another idea would be to sell one of the
farms to son. Capital gains can be deferred
and there is no longer a gift tax to worry
about. Or the son may acquire ownership
of some machinery.
•Assets should be owned individually.
Father and son contribute their assets to
the business and it is operated as one unit.
•A farm bank account is a must. All
income and expenses should go through
the account. Your record keeping will be
easier. Monthly cash advances can also be
drawn from this account for personal
requirements.
•Appoint someone to keep the records
and make provision to have other family
members inspect the records periodically.
•Divide the net cash income at the end of
the year as previously agreed upon and
each individual file on separate income tax
A d vice on Farming
form.
•Review the agreement annually and
revise as needed.
A bulletin entitled "Farm Business
Agreements and Asset Tranfer" is avail-
able from the Ontario Ministry of Agricul-
• ture and Food offices free of charge. It is
easy to read and is an excellent reference.
Nitrogen fixation
could increase
food production
A biological process that may hold the
key to the economic production of food
from poor soils is a step closer to reality as
a result of an international conference held
in Brazil last summer.
The first meeting on associative nitrogen
fixation attracted scientists from 15 count-
ries around the world. They provided
conclusive proof that some bacteria, when
associated with certain plants other than
legumes, can take nitrogen from the air
and make it available to the host plant.
Nitrogen fixation associated with leg-
umes, such as alfalfa and clover, is well
known.
Rob Rennie, a research scientist at
Agriculture Canada's research station at
Lethbridge, Alta., is working on nitrogen
fixation in wheat. He attended the confer-
ence, and reports that the nitrogen -fixation
process has been identified in certain types
of wheat, corn, rice, sugarcane, sorghum,
millets and grasses.
"There's a lot of research to be done
yet," Dr. Rennie says. "Methods for
identifying new nitrogen -fixing systems
and for measuring nitrogen -fixation per-
formance must be developed before we can
consider any practical applications to
agriculture."
Canada is the only nation presently
involved in nitrogen -fixation research in
spring and winter wheats. Research at the
Lethbridge station has established that the
ability of certain wheat plants to support
nitrogen -fixing bacteria can be induced by
genetic alterations.
In an ideal situation, the host wheat
plant would provide the bacteria with all
the energy they need -- in the form of sugar
-- and the bacteria at the same time would
provide the plant with its nitrogen needs.
"The science of nitrogen fixation associ-
ated with crops other than legumes has
come of age," Dr. Rennie says.
"Scientists attending the conference
agreed to meet every two years to review
progress."
United Nations officials at the confer-
ence expressed much interest in support-
ing further research.
"Nitrogen fixation may hold the key to
economically increasing food production
from nitrogen -deficient soils in many parts
of the world," says Dr. Rennie, who was
invited to participate in the conference by a
United Nations agency.
Falls are the most common
cause of lost time on the farm
Injuries from falls are the most common
cause of lost time on the farm, and the
most serious ones occur when climbing
tower silos.
At the Ontario Ministry of Agriculture
and Food's Elora Research Station, the
Farm Safety Association of Ontario is
testing several devices to reduce the risk of
climbing silos.
"In co-operation with the Construction
Safety Association, five fall -arrest devices
manufactured by four different companies
will be installed on tower silos at the
research station," explains Larry Swinn, of
the Farm Safety Association.
Personnel at the station will participate
in this practical experiment to determine
which devices have the greatest potential
in agriculture.
Unlike the cages that enclose silo
ladders, fall -arrest devices attach the
dimber to the ladder. There are basically
two types of devices --one uses a cable
system, the other uses a fixed rail or tube
system. If the person falls, the device will
allow him to fall only a short distance.
"This type of equipment has a number
of industrial applications, particularly in
the construction and chemical industries,"
says Mr. Swinn. "We'll be evaluating the
equipment over the next three or four years
to see how it survives weathering and
rust."
THE RURAL VOICE/DECEMBER 1979 PG. 31