Capital idea!

Wannabe dairy farmers will find it easier to tap into startup financing if the vision of two Wellington county businessmen is realized.

Citing a cost of about $1.4 million to get a new 40-cow, 100-acre dairy operation up and running from scratch, dairy farmer Albert Roelofs and Mike Brown, a Fergus-based real estate broker, hope to provide young farmers with "patient capital" - a loan to start up a business that doesn't require regular payments to the lender, Brown and Roelofs explain.

Roelofs would be in charge of the venture capital company. Brown and his business partner, Diane Gray, would act as real estate consultants. The group would provide management counsel and bring professional expertise - accounting and banking services, for example - to the table as needed. Together with the new owner, a plan would be developed that, after four years, would enable the startup farmer to either buy out investors or expand.

Brown says the group is developing marketing material and an explanatory package that should be available for investors and farmers next month. Two individuals have already inquired about startup financing: "We're very close to putting the whole thing in motion," says Brown.

Brown sees retired farmers as a source of capital, suggesting that several investors might pool their resources to finance one farm. He believes such an investment has the potential to offer more growth than mutual funds.

Many have cooled after double-digit growth in the early and mid '90s, but Brown says in the model being proposed "that would never have happened to the investor." Monthly investment reports will be available to shareholders.

Potential farmers must come into the business with their own financial backing - as much as 30 to 40 per cent of the startup cost. "It's not a charity organization," Roelofs stresses. He and Brown will be charging an as-yet-to-be-determined fee for their services.

Because of their familiarity with the region, the capital and investment service will focus on the Wellington county area and dairying initially, say Brown and Roelofs. They suggest new feather farmers, who might find startup costs daunting because of industry quota prices, might be sought in future.

Additionally, Brown cites Wellington county's "amenities," referring to the professional expertise the new farmer could draw from nearby University of Guelph, Ontario Agricultural College and OMAFRA. "We think we'd like to try to settle people here, especially from a servicing point."

A big operation isn't the aim of the financing program. Capital outlay on machinery outside the milking parlour will be minimized - likely just a loader tractor - and custom work will be the suggested trend in the field, leaving the owner free to concentrate on the barn, where money is generated.

And though investors will be kept abreast of what's happening to their capital, they won't be micro-managing the operation. It's "most important," says Roelofs, that buyers have the feeling that they are on their own farm. With sound advice and good management, that could actually be the case after four years. - Don Stoneman

© copyright 1999 Agricultural Publishing Company Limited.


Hardeman takes top farm post

Ontario's new Agriculture, Food and Rural Affairs Minister Ernie Hardeman is no stranger to agriculture.

The long-time municipal politician, who was first elected to the provincial legislature in 1995, has been in the feed business since 1963, and Hardeman Feed Ltd. at Salford, Oxford county, has done business with many of the community's farmers over the years.

Hardeman says he will take some time to consult his ministry and industry stakeholders to "see what needs to be done," but it's obvious the former mayor of the Township of South-West Oxford and chairman of the Rural Ontario Municipal Association (ROMA), has some pre-conceived notions of the role his ministry should play.

He says his years in the feed business "gives us a very clear handle on the problems and what needs to be done for our farming community."

Hardeman fills the job opening created when former ag minister Noble Villeneuve was defeated in the provincial election last month, and it's apparent that the ministry's new boss will continue to shepherd the makeover started by his predecessor.

Hardeman says that rather than putting farmers first, he'll be "working towards a whole...agriculture, agri-food program that puts the whole industry first."

But that doesn't mean farmers will be forgotten, he says: "The most important things to do in providing opportunities for farmers is to make sure that we have a processing and a delivery system that will take those products in a cost-effective manner to the consumer, wherever they may live....I think working in the whole industry will in the end benefit the farmer in Oxford and the farmers in all of Ontario."

To achieve success, Hardeman knows he'll have to push for more communication and trust among the different sectors of the industry.

"To have a strong and viable farm community we have to have a strong and viable processing and marketing community, and we all have to work together to make it good for us all."

Hardeman will be relying heavily on his knowledge of rural communities and local government to help guide him through the rural affairs portion of his portfolio. As parliamentary assistant for municipal affairs in the last Tory government, he headed up an advisory panel that assessed the impact downloading of government services would have on local communities.

He says he'll draw heavily on his 14 years of rural council and ROMA experience to determine what the government should be doing to provide opportunities in rural areas and at the same time, "protect our rural environment for farming in the future."- Bernard Tobin

© copyright 1999 Agricultural Publishing Company Limited.


Improving income relief

Weather and market woes in Saskatch-ewan have prompted the federal government to add some strings to the fraying national farm income safety net.

While a complete repair job will be discussed at the agriculture ministers' meeting in Prince Albert, Sask., this week, Agriculture Minister Lyle Vanclief has announced changes to allow farmers to withdraw up to 60 per cent of their 1999 Agricultural Income Disaster Assistance (AIDA) payouts this year.

Ontario farmers, hit by drought and low prices, will also benefit, Vanclief said in a conference call from Brandon after viewing flooding damage by air. Vanclief said the AIDA advance should pump an extra $54 million into Saskatchewan, $22 million into Manitoba and $117 million across the country.

Money could flow in the next few months, but farmers, many of whom have not filed for AIDA because they deemed themselves ineligible, are urged to file by the July 31 deadline.

Vanclief will also enhance NISA, increasing the minimum income trigger from $10,000 to $20,000 for individuals and $20,000 to $35,000 for families. Farmers will be able to draw from their accounts more easily, making withdrawals and deposits in the same year. Penalties have been lessened for farmers who withdraw too much.

As for a longer-term fix to safety nets, including farmer gripes about negative margins and NISA tie-in (see page 23), Vanclief, heading into the first ministers' meeting, pledged that he "remained committed to assessing AIDA's performance in 1998." - John Muggeridge

© copyright 1999 Agricultural Publishing Company Limited.


Rails to travails

Farmers and other adjacent landowners in Simcoe county appear to be getting the upper hand on trial enthusiasts who want to run the Trans Canada Trail from Caledon to Cookstown.

Land owners such as W.D. Potato Ltd.'s Linda Davidson are not claiming victory, but New Tecumseth mayor Larry Keogh says if farmers and agri-business in the area don't want the trail, it shouldn't be forced upon them.

Last month, the New Tecumseth town council passed a resolution saying the trail could proceed on an abandoned CN railbed if trail enthusiasts could convince adjacent land owners to pledge their support to the project.

But that's not likely to happen, says Betty Sutherland, a trail opponent who farms with her husband, Wayne, north of Beeton. Sutherland has collected signature from 18 adjacent landowners, indicating their opposition to the trail.

Keogh says the council has set up a committee to find an alternative route for the trail, but it will first attempt to sell landowners on the positive aspects of the trail. If that fails, the trail will likely proceed where landowners are willing to co-operate. But developing a continuous trail appears unlikely.

Sutherland says she's pleased that the council has listened to farmers who feared that the trail would cross intensive farm operations and play havoc with spraying and other farming activities.

Linda Davidson wishes council had made a definitive decision on the issue.

During potato harvest as many as 500 trucks travel through the yard in a day, says Davidson, who with husband Walter owns and operates a potato storage and transportation business that employs 50 people and has annual sales in excess of $25 million. - Bernard Tobin

© copyright 1999 Agricultural Publishing Company Limited.


Support growing for lysine suit

Grassroots support for Middlesex pork producer Rein Minnema, who has launched a $35-million class action lawsuit against four companies who rigged the lysine market, continues to grow.

Mid-June the 44,000-member Ontario Federation of Agriculture lent its "moral" support to Minnema's cause, joining such groups as the Christian Farmers Federation of Ontario, Ontario Pork, and county pork associations and federations of agriculture.

Wellington farmer Ray Baptie, chairman of the OFA Farm Finance, Trade and Taxation committee, cited "overwhelming" support for Minnema, who met with the committee and paralegal Bob Salvador. "We are opposed to price fixing and support Mr. Minnema and any others affected by this in seeking damages," says Baptie.

OFA directors passed a resolution offering moral support to Minnema's bid, but Baptie stressed there would be "no financial attachment." The growing groundswell in his favour comes as good news to Minnema, who knows he may be in for a long court battle. First step is getting clearance from the courts to proceed, and define who is in the class. Reacting to recent news of another price fixing scam involving vitamins, Minnema vows to go after those companies "if nobody else does." - John Muggeridge

© copyright 1999 Agricultural Publishing Company Limited.


Dolly growing old quickly

Molecular studies on Dolly, the now three-year-old sheep cloned from a six-year-old ewe, indicate that her cells are essentially nine years old.

The research - conducted by Paul G. Shiels of PPL Therapeutics, the Scottish company that helped create Dolly, and reported in Nature magazine - suggests that clones inherit both the genes and the age of the animals from which they're made.

Shiels' work focused on telomeres, strings of genetic material at the ends of chromosomes' inside cells that protect chromosome tips, much like the plastic ends on shoe laces. In most tissues, the telomores get shorter with each cell division, and if they get short enough, according to one theory, the hallmarks of aging appear.

Though Dolly appears youthful (and sheep don't get grey hair or other obvious indicators of age) her telomeres are about 5,000 molecular units shorter than expected for a sheep her age. "We've been raising the question of how you would look for signs of premature aging in a sheep," said Ian Welmut, the scientist at Scotland's Roslin Institute who oversaw Dolly's creation. "The answer is 'I'm not sure'." Vets typically determine a sheep's age by look at how worn its teeth are.

Wilmut, who co-authored the Nature paper, said he believes the link between telomore length and lifespan is variable enough that Dolly may live a normal 15 years or so.

Cloning research on cow cells at Advanced Cell Technology in Massachusetts suggests cloning makes cells younger, not older, cloning expert Jose Cibelli told the Washington Post. - Richard Charteris

© copyright 1999 Agricultural Publishing Company Limited.


Deadstock companies fight for survival

If you raise livestock in eastern Ontario, get ready to pay a fee for deadstock removal.

Cyclical prices for hides and offal have plunged, and the companies which collect dead farm animals say they will have to charge farmers a pickup fee to survive.

Norval farmer Harry Brander, chairman of the Ontario Federation of Agriculture's land use committee, says OFA will be asked to lend support to one of several funding options which may include municipal support and user fees.

The five-member Eastern Ontario Recycling Association says companies need $50 per cow and $15 per calf to make farm pickups profitable. Cattle hide prices, meanwhile, have plunged to $23 from a high of $53, and the companies say they are under pressure from bankers, and have been forced to sell off assets and cash RRSPs to stay afloat.

The deadstock industry ran into a similar downturn in the early 1990s, but found that charging fees often hurt business. Companies west of Highway 400 seem less affected, possibly due to higher livestock numbers.

© copyright 1999 Agricultural Publishing Company Limited.


Four inducted into Hall of Fame

You don't get into the Ontario Agricultural Hall of Fame in Milton for being blasť about the business of agriculture, and this year's four feisty farmer inductees are no exception.

Passion for agriculture and clear-cut vision for its future characterized each of the four men whose portraits now hang in the Hall of Fame Gallery at the Farm Museum in Milton: farm mutuals advocate A. Bruce Caughey, turkey innovator Mac Cuddy, grape pioneer Ronald Moyer, and dairy genetics visionary Alvan Dewey Ralph.

"In all practicality in the world of global economics, [supply management] can't continue," a feisty 79-year-old Mac Cuddy told Farm & Country following the unveiling of his portrait which will reside in the Hall of Fame.

Fellow inductee Ronald C. Moyer, who co-founded the grape board and pioneered vinifera grapes in the province, was no less outspoken. Despite popular consensus, free trade was not the silver bullet for the grape industry, said Moyer following his induction: "We used to have 80,000 tons [of grapes]. Today, we have 40,000. It's all a case of trying to compete with the garbage of the world."

Cuddy, who built up the Cuddy Foods empire from a 100-acre turkey farm near Strathroy in 1950, says his selection to the hall of fame "is an exceptional and humbling honour." A key to Cuddy's success, he says, was expansion into the U.S. early on, in the early 1970s. He also pioneered year-round breeding of turkeys through use of controlled barn lighting. The vertically-integrated breeding, incubating, hatching, growing, dressing, further processing and marketing business today controls 27 per cent of the world market for hatching eggs and day-old poults. Cuddy chicken is found in McDonald's restaurants throughout Canada.

Moyer, an RCAF World War II pilot who helped found the grape board in 1974, serving 15 years as chairman, secured funding for Canada's first virus-free grape vines. The family continues to run a fruit business in Grimsby. The first supplier of Seyval Blanc grapes in Ontario in the early 1970s, he helped bring the Ontario wine grape industry to world-class status.

Also inducted was A. Bruce Caughey, 89, who milked cows on Amherst Island, and was the driving force behind the Fire Mutuals Guarantee Fund, which links and protects Ontario's 50 farm mutual insurance companies. Combined, the member-owned mutuals are the fifth largest property insurers in Ontario. For more than half a century, Caughey was a director on the Amherst Island Mutual Fire Insurance company. He spent 45 years serving on area school boards, helping bring a school and telephone service to the island.

Not only did he receive little remuneration for countless hours of community service, says son Bruce Jr., he did it in the days when the last Amherst Island Ferry departed at 6 p.m. Returning from evening meetings, his father would cross by small boat or over ice in the winter, he says.

The fourth inductee is Alvan Dewey Ralph (1894-1972), a Carleton county registered Holstein Breeder who helped found the Eastern Ontario Cattle Breeding Association in 1947, today known as EBI. Using his own resources, Ralph helped complete a transaction to purchase 100 acres for the association to establish an AI unit nearKemptville College in 1947.

"Without his strong leadership at the beginning of the Eastern Ontario Cattle Breeding Association, it would have been very difficult to get the organization going in the early years," says Ralph's hall of fame sponsor Robert Aumell.

© copyright 1999 Agricultural Publishing Company Limited.


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