The Rural Voice, 1991-04, Page 42ONTARIO MACHINERY RING:
New co-operative hopes to make efficient use
of farm equipment to help debt ridden farmers
With the cash crop industry in Ontario suffering from high
input costs and shrinking margins, Jack Janzen of Centralia is
hoping that a new idea in making more efficient use of farm
machinery will catch on in Southern Ontario.
Janzen, the general manager of the Ontario Machinery
Ring (MR), is the enthusiastic man behind this new concept
that embraces the age old concept of the co-operative move-
ment that is well known in agriculture circles — sharing.
"It makes so much sense," says Janzen, a native of a 3,000
acre mixed farm in the Red River Valley south of Winnipeg.
"A farmer can no longer afford to buy a $200,000 combine just
for his own farm and have it sit in the farmyard for 11 months."
Pointing to statistics, Janzen says Ontario farmers can't afford
to borrow any more money to buy
machinery.
With the province's 72,200 farmers
owing a total of $4.65 billion on their 8.5
million acres of arable land, they're
burdened down with a $453 per acre debt,
and can ill afford to take on more. "They
have to make $50 to $60 profit per acre just
to pay the interest," says Janzen.
Using a sophisticated computer pro-
gram to co-ordinate farmers who want to
do custom work with other farmers in
need, Janzen says the Machinery Ring will
take the difficulties out of matching up the
two. It will case the tracking, billing, and
paying, which had previously been a headache to custom
operators.
"We have a computer program here that will be world
renowned in two years," says Janzen.
As well as an initial membership fee of $200, and an annual
fee of $100, farmers will pay a fee of two per cent of the amount
of each transaction to cover administration costs.
Janzen stressed several times during a recent interview that
the Machinery Ring is non-profit, and won't own any
machinery. "It will be run by a board of directors who will be
elected by the members at our first annual meeting next
January," says Janzen. "They'll make guidelines, rules, and set
rates." Initially, for this year, the MR will use custom rates set
out by the Ontario Ministry of Agriculture and Food.
When the idea was first unveiled to the Bruce County
Federation of Agriculture late last fall, it received some flak
because the idea came from Canadian Agra president Helmut
Seibert, who had seen how well the system had worked in
Europe. "Once it's up and running, Canadian Agra doesn't
want to have anything to do with it. The Ring will be com-
pletely independent and run by the farmers," says Janzen.
Machinery rings were first started in 1958 and have expan-
ded to 11 major countries in the world. They are very popular
in Europe, where, for example, there were 259 rings in West
Germany in 1985. There are about 400,000 members in
Japan's machinery co-ops.
To answer concerns that farmers might not be able to get
machinery during the times of high demand, at planting and
harvest, Janzen says there's more than enough "to work all the
acres five times over." His research shows there are 21,000
tractors of over 100 horsepower in Ontario. "If each one did
100 acres per day they could cultivate the whole province in 20
days and the tractor would sit in the barn for the other 345
days." There are also 166,000 tractors under 100 hp. And with
23,000 combines out there "at 40 acres a
day it wouldn't take long to harvest it," says
Janzen.
The Ring is starting in Huron County this
spring and goes into Perth and Middlesex
later in the year. If the federal and
provincial governments approve $400,000
interest free loans, the Ring could be in 10
counties by next spring. "We're getting a
lot of pressure from other counties and have
even had calls from other provinces," says
Janzen. Many saw their information booth
at farm shows in Toronto, and London.
"We've had a very positive response,"
says Janzen, including at least 10 farmers
from Bruce County who wanted to sign up immediately. "But
we've got to crawl first to work out the bugs," he says about
resisting the temptation to expand into other counties too fast.
All members will have their equipment inspected first to
ensure it's in good condition. They will be given a three-ring
binder with rules, suggestions, and custom rates. Both client
and custom worker must sign a receipt when work is done
before a farmer's bank account will either be credited or
debited, depending on whether they did custom work or had it
done. The Ring will see that every custom operator is paid.
Janzen says its a good system because the custom operator
is always paid, and he doesn't have to run around chasing his
receivables. "It will be up to the Ring to collect the debt, but we
expect few problems," says Janzen.
The firstcustomer was signed on March 15, the first official
day, and by press time on March 23, 16 farmers had signed up,
including several large cash crop producers.
All farms in Huron County and bordering areas received
pamphlets in the mail the last week of March. For more
information, contact Janzen at P.O. Box 69, Centralia Ontario,
NOM 1 KO, (519) 228-6904.0 by Jim Fitzgerald
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38 THE RURAL VOICE