The Rural Voice, 1983-11, Page 11\-\•\•\•\-\t\r\\�\-�t\-\-\•\-\t . \+�+�\fit\-\-\-\r
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Through combined efforts, farm organizations are lobbying
to make more funds available to farmers.
1984. The assistance at $16 million is
a rebate of four per cent off the in-
terest charged for the first two years
the loan.
Ralph Barrie, O.F.A. president,
called this $200 million absolutely in-
adequate. His estimate is that it can
help no more than 1,500 farmers in
all of Canada.
In addition, S.B.D.B.'s were made
available to farmers. This also
amounts to a four per cent interest
rate reduction, but only on property
acquired between June 28, 1982 and
March 31, 1983.
The concerns of the farm organiza-
tions proved to be correct. Farm
foreclosures across Canada increased
dramatically, causing many instances
of militant actions by desperate
farmers and demands that part of
some loans be forgiven.
Ralph Ferguson, MP Lambton, in-
troduced legislation to revise the bill
used in the Great Depression, The
Farmers' Arrangement Creditors
Act, whereby a court can impose a
proposal on a lender, including
forgiveness of loans or parts thereof.
This bill is still in Committee and will
shortly be debated and possibly acted
upon.
The Canadian Farm Survival
Association (C.F.S.A.) was formed
to take an active roll in assisting
farmers to survive in the face of re-
cent difficult times. Even the tradi-
tional farm lobby groups are getting
more militant. At a recent directors'
meeting the O.F.A. decided to in-
stigate a number of steps to get more
funds for the F.C.C.
These steps will begin at the county
level where all producers are asked to
write or phone their MP and to show
their displeasure by demonstrating.
If this doesn't work province -wide
demonstrations are then called for
both in Ottawa and Toronto.
Meanwhile, the O.F.A., C.F.F.O.
and C.F.S.A. are meeting to map a
common strategy.
F.C.C. interest rates have now
dropped to 12'/4 per cent from 13 1/4 .
This is almost exactly the rate asked
for by the C.F.A. and C.F.F.O.
The four per cent subsidy brings
the rate close to the minimum eight
per cent mark.
There is no problem in getting
more funds for the F.C.C. The pro-
blem is that Finance Minister Lalonde
has refused to allow the F.C.C. to
borrow more than $250 million from
private sources. Accusing fingers
have been pointed at the banking
community for lobbying the minister
to leave lending to the private sector.
This, of course, had been denied. But
the F.C.C. could use another $500
million to $750 million to carry out its
mandate.
This is what farm organizations are
trying to get with their combined lob-
bying.
Steve Wright, Credit Advisor in the
Goderich field office of F.C.C. has
found that in his area of north
Huron there is a definite improve-
ment in farmers' economic condi-
tions. Hardest hit were beef pro-
ducers, which is why there are more
problems in Bruce and Grey counties.
Wright says all problems must not
be attributed to the present recession.
There have always been individuals
who could not run their businesses. In
good times even the poor managers
survive, but when the crunch comes
they find it hard to make repayments.
He also has found that some good
managers have been caught off -guard
by the inflation and high interest
costs. They too have been guilty of
overspending.
He advises everyone to know their
costs and be efficient. Then he has no
doubt they'll come through.
Since October 1st there have been a
number of changes in F.C.C.
policies. Previously, a mortgage
could be paid off as fast as money
became available. This has now
changed; there will be a pre -payment
penalty of three months interest on
any amount paid in advance.
Further, there will be no more fixed
interest rates for 25 to 30 years. The
maximum period will be 10 years.
However, F.C.C. funds were
depleted by June 13th of this year.
This leaves a backlog and it is this
backlog the farm lobbyist are so con-
cerned about.
The Ontario government had their
Beginning Farmers Assistance Pro-
gram riding piggyback on F.C.C.
loans. As the dearth of F.C.C. money
made the provincial program impo-
tent, it has now been changed to in-
clude several of the chartered banks.
The program will rebate interest
charges in excess of eight per cent, to
a maximum of five percentage points,
on loans up to $350,000.
Every farmers who has used
government money in the past or who
may need F.C.C. money in the future
should take personal responsibility
for assisting with the lobbying efforts
to improve F.C.C.❑
Possible solution?
The Ontario Federation of Agri-
culture has developed the Agri -Bond
scheme for financing the agricultural
industry. For several years O.F.A.
has been seeking to have this scheme
integrated into the Farm Credit Cor-
poration's structure. This concept has
gained wide acceptance in the farm,
financial and political communities.
However the federal finance depart-
ment has refused to recognize Agri -
Bonds.
The Agri -Bond would be an instru-
ment an investor could purchase from
F.C.C. bearing interest rates lower
than other investment instruments,
Guaranteed investment Certificates,
for example. The investor would
receive a tax credit for the interest he
received from his Agri -Bond; this
would be applied to his taxable in-
come raising the effective returns
from the Agri -Bond to a level similar
to a G.I.C.
This very same tax credit system is
now in place for investors in Cana-
dian corporations. O.F.A. is asking
that this policy be expanded to in-
clude investors in Canadian
agriculture.
In short, Agri -Bonds would make
more dollars available to F.C.C. to
loan to Canadian farmers at less cost
to Government. ❑
THE RURAL VOICE, NOVEMBER 1983 PG. 9