Credit due to rural banking ingenuity
The power of money - it's something bankers figured out a long time ago. For most regular folks, though, banks are merely doing them a favour by holding on to their money. After all, it's never easy to pull a mattress out of a burning house.For their trouble, banks loan that money to borrowers at a rate two to three times what they pay their depositors, and pocket a healthy profit.
Banks have always been a key part of rural Ontario, bringing convenience, status and even a feeling of legitimacy to small towns. But in recent years many rural bank branches have closed their doors, creating a crisis in small-town Ontario. The problem could become epidemic if fears that bank mergers will force more closings prove prophetic.
So what do you do when the bank says it's closing up shop and informs you that your account will be transferred to its nearest branch 15 km down the road? You could take you money home and stuff it in a pillow (it's lighter than a mattress) or follow the lead of a growing number of small rural municipalities - use the power of your money to attract another financial institution.
In July of last year, when the Bank of Montreal announced it was closing its branch in Wardsville, a town of 500 southwest of London, town reeve and local barber Jack Morrison and residents did something about it. They couldn't convince the bank to stay, so they set out to find a credit union that would service their needs.
After shopping around, representatives from Thamesville Community Credit Union were invited to a community meeting. It was something to behold, says Morrison. After the meeting, residents huddled with Thamesville representatives to pledge their support and the money in their Bank of Montreal accounts to the credit union, knowing that the life of their community depended on it.
A similar story unfolded earlier this year in the town of Keene, 20 km south of Peterborough. In March, after spending 95 years in the community, the Toronto-Dominion Bank announced it would close its Keene branch. But the community wasn't licked. A concerted letter writing and media campaign and a community commitment to pledge 400 accounts and deposits worth $5 million was enough incentive to bring Peterborough-based Kawartha Credit Union to town.
"Rural communities are learning they will have to take care of themselves. We feel very much a partner with the township," says Mary McGee, Kawartha manager of member services and business development. The credit union, which occupies the old TD offices, now boasts $5.5 million in deposits from Keene residents.
Thamesville general manager Paul Hogg says commitments from Wardsville residents has pushed assets from $5 million to $7.6 million since it opened its new branch at the old Bank of Montreal location earlier this year. Membership has swelled to 2,075 from 1,500. Hogg sees credit unions filling a growing niche in Rural Ontario as banks retreat from the provincial heartland.
The credit union convenience and rural commitment is something Fred Nelson used to expect from the big banks. Nelson, 94, was TD-Keene's last customer. His grandfather was its first 95 years ago. "A lot of people can't get to Peterborough," says Nelson. "I'm a great supporter of this community, and this is a great way of supporting it." - Bernard Tobin, files from John Muggeridge
© copyright 1998 Agricultural Publishing Company Limited.
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Credit union clout
- There are 387 credit unions and caisses populaires (French-speaking credit unions) in 800 locations throughout Ontario- Ontario's credit unions and caisses populaires have accumulated $13.5 billion in assets and serve close to 1.6 million members
- More than 3,500 Ontario residents participate as volunteers on credit union boards and committees in communities across the province
- Member credit unions of Credit Union Central of Ontario provide employment for more than 4,000 people across the province
- In 1997, Ontario credit unions held 5.1 per cent of provincial market share in personal loans and 4.7 per cent of the market share in personal deposits
- Credit Unions have been serving Canadians since 1900, when the first caisse populaire was established in Quebec. The first deposit was a dime, and on the first day of business, deposits totalled $26.40. Ontario's first credit union was founded in Ottawa in 1908
Source: Credit Union Central of Ontario
Decision time for pork producers
BY ROBERT IRWIN
An anxiously awaited study of pork marketing systems in Ontario has concluded that creation of a new autonomous agency will boost hog production and reduce overall marketing costs. However, the study by Edmonton-based Serecon Management Consulting Inc., predicts the move will raise costs and reduce prices for smaller operations and see 50 per cent of the smallest producers leaving the industry.At press time, Ontario Pork councillors were set to debate the report at the pork board's semi-annual meeting in Toronto. The debate was closed to media. During meetings late last month pork board directors wrestled with the report's conclusions; some have attacked the accuracy of the numbers used in making assumptions.
Ontario Pork vice-chair Clare Schlegel terms the numbers "defensible, but I think one could provide argument for other numbers."
Maintaining "Serecon has done an excellent job," pork board past chair Carl Moore concedes "any figure in there you may be able to delete. That's why [the directors] made the decision we made," to delay a vote on the report until next year's annual meeting in March.
Still, insiders now predict a final decision will be directed by the Ontario Farm Products Marketing Commission. Although the board and the Commission have collaborated closely on the issue in the past few months, similar changes in other provinces have involved a producer plebiscite overseen by government.
Serecon considered an open market system, which would eliminate Ontario Pork's monopoly power. Eventually, the study reduced the four potential marketing options to two possible solutions.
Ontario Pork chair Will Nap terms the difference between the two in number of hogs marketed and producer participation "fairly minimal."
Solution A separates marketing and universal services into two entities under the direction of Ontario Pork. "Specific marketing services such as settlement would remain mandatory for all producers, however a number of alternative marketing activities would remain optional," the report suggests.
This solution would be quickest of the two to implement and, according to Serecon, would provide producers "with a much clearer picture as to the actual costs associated with marketing their hogs."
It is estimated that Ontario Pork currently serves a scant 30 per cent of the market, something Serecon says makes the present system appear unrealistically efficient, because hogs that don't go through the system pay at the same rate as those that do. Both Schlegel and Moore estimate the total is 50 per cent or greater, depending on which marketing options are included.
The report predicts solution A would increase marketing costs to those not dealing directly with packers by approximately 42 cents per market pig and decrease the costs for those marketing directly by 34 cents from current levels.
Solution B calls for "creation of an autonomous agency." Ontario Pork would continue to provide such universal services as producer advocacy and license competing selling agencies, including the new marketing agency, which could be a co-operative or a corporation.
Solution B would give producers greater freedom: It allows for competing selling agencies. Serecon notes lack of choice was identified as "a key element of dissatisfaction on the part of the larger production units," which emerged in last November's industry task force survey.
The report forecasts newfound satisfaction through solution B would boost current 30 per cent participation in Ontario Pork marketing five per cent above solution A to 50 per cent through the independent agency over a five-year period. It also predicts the agency would stimulate a 16 per cent increase in hogs produced, bringing the current 3.8 million produced annually to 4.4 million.
The report forecasts solution B would improve satisfaction among medium and large-sized producers. Operations with between 100 and 600 sows are predicted to be most supportive of the agency. The report says they are adequately efficient but "still small enough to benefit from co-operation."
Despite Serecon's number crunching, Nap says producers "will still make up their mind based on philosophy more than anything else...Are we going to serve all producers equally, and is one co-operative better than four or five?"
No matter how satisfied they are with the current system, producers must look beyond status quo and try to anticipate what the market will look like "five or 10 years out" and "what their needs will be," Nap warns.
Schlegel, who served on the industry task force, says both A and B satisfy that group's chief recommendation, which was to "separate politics and marketing."
The key, he says, is that in "an industry with a lot of sellers and few buyers we continue to work together to balance out the marketplace," leaving selling to individual producers.
© copyright 1998 Agricultural Publishing Company Limited.
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Farm lobby kicks in early
After being shut out in their pursuit of a larger share of the provincial budget last spring, Ontario farm groups are hoping a lobby-early-and-often campaign will deliver the goods next year.The 37-farm-organization-member Farmers of Ontario met with Premier Mike Harris last month at the International Plowing Match, officially launching the campaign.
In past years the lobby effort never shifted into high gear until after Christmas, but the budget process usually starts in September, and key spending decisions are often made in November.
"This time we're going to start early and be very insistent agriculture gets a fair share of the budget increase," says Ontario Federation of Agriculture president Ed Segsworth.
When the 1998 budget was tabled last spring farm leaders were surprised to find their lobby efforts had failed to fatten the farm envelope. While Finance Minister Ernie Eves applauded the efforts of the sector, the only new agriculture ministry initiative was the four-year, $35 million Rural Youth Job Strategy.
The meeting with Harris "was a positive, first step in enhancing the co-operation between the agricultural community and the government," says Segsworth.
The lobby will work with OMAFRA to develop a series of proposals to enhance funding in areas of market development, the environment, risk management, agricultural research and food safety.
"I'll be disappointed more than last year if we don't get something this time around," says Wayne Newman, Ontario Agricultural Commodity Council chairman.
With a election expected next year, will the government be more willing to listen to the farmers' concerns? "If we can get our point across, rural Ontario will be either behind them or against them," says Segsworth. "This is going to tell a big tale, I would think - how they treat agriculture." - Bernard Tobin
© copyright 1998 Agricultural Publishing Company Limited.
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Another tax rollback claim
A second rural Ontario homeowners' group is citing a neighbouring hog farm in their quest for property tax reductions, hoping to ride on the coat-tails of a recent rollback in the Ridgetown area.Eighteen families, members of the North Marysburgh Ratepayers Association in Prince Edward county, claim the proximity of the 2,500-sow unit Hay Bay Genetics, owned by the Davis family, has devalued their homes.
Association president Bob Marne, Picton, who has lived in the area for 20 years and once raised pigs himself, gives the Davis family full marks for "neighbourly relations. We would all concede Hay Bay Genetics is one of the more responsible hog operations."
But area homeowners are concerned about odour, water quality and owners' rights of enjoyment, as well as property values, Marne says.
The group is counting on last month's ruling by the Assessment Review Board (ARB), which rolled back taxes for three Ridgetown-area homes. That case, argued by one of the appellants, Ridgetown lawyer Douglas Desmond, has come under fire from farm groups and is being reviewed by the ARB chair.
The 75-member North Marysburgh group had decided to proceed with their claim in 1997, well ahead of Desmond and the Ridgetown group. Michael Chorney, one of the Picton claimants, says they initially decided to await a province-wide Ministry of Finance study on the impact of hog farms on property values that was repeatedly promised over a two-year period.
"Now [the Ministry of Finance] is saying they never heard of this study. I think we're being stonewalled," Chorney concludes.
He says the group eventually went ahead without the study and was scheduled for a hearing before the ARB prior to the Ridgetown hearing. But the Picton group cancelled that hearing and forfeited their deposits earlier this year when they concluded Desmond's elaborate, professional research might make his cases stronger than theirs.
Chorney says if his group had proceeded and lost it could have adversely affected Desmond's case, and if he were successful, it would provide a valuable precedent on which to base their own arguments. - Robert Irwin
© copyright 1998 Agricultural Publishing Company Limited.
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Woman wins benefit battle
Like many young farm couples across Ontario, Seaforth's Carol and Bob Leeming hold down off-farm jobs to help keep the family on-farm. Carol, 35, is a planner for the County of Huron and a partner with Bob in an egg and crops enterprise in Seaforth.When it came time to file for maternity benefits after the birth of her second child, Laura, in 1996, Carol found that her off-farm job had become a bugaboo, not a boon. The Canada Employment and Insurance Commission told her that as "co-owner of the farm," she would have to count 15 per cent of the farm's gross earnings against her bi-weekly Employment Insurance (EI) benefits, dollar for dollar. It wiped out the benefit entirely.
Two years later, after a successful two-year battle with three levels of bureaucracy at Employment and Immigration Canada, Leeming hopes claiming maternity benefits will be fairer for her and other farm women across Canada.
"It's meaningful for other farm spouses, looking at the contribution they're making" to the farm business, says Leeming's Stratford-based lawyer Mike Mitchell, who successfully argued at a Federal Court of Appeal hearing last May that Leeming had been wrongfully denied maternity benefits in 1996 because of her partnership with Bob in the 7,000-layer, 100-acre farm.
Mitchell argued at the hearing in a downtown Toronto courtroom that Leeming's involvement in the farm was limited to 12 hours of bookkeeping a year, and that she was rather an investor in the farm. Upholding an earlier ruling, Judge J.A. Robertson awarded Leeming full benefits for the six-month period in 1996, plus court costs. Agreeing with Mitchell's arguments, the judge likened Leeming's 12 hours a year of bookkeeping to a shareholder checking up on investments.
Leeming also took the issue to the 1996 Ontario Federation of Agriculture convention. Today, OFA Huron-Perth member service representative Paul Nairn, who helped her through the appeals, reports that Agriculture Canada is working on clarifying the application forms, and reworking the 15-per cent rule - a rule Leeming still believes discriminates against farmers. While farmers with off-farm work pay EI premiums like anyone else, they must count 15 per cent of their gross income against their benefits, while all other self-employed people can use their net income.
Leeming's lawyer, Mitchell, says the case, heard in federal court, will set a precedent and speculates that farm women applying for benefits may end up having to keep a log of hours worked on the farm. "I never believed that this case was unique," Mitchell says.
Leeming, who has received calls from 10 farm women in the same predicament, says that while every case is different, persist if you believe you are right: "Some didn't bother going through the process, because it is intimidating, dealing with stuff that's beyond comprehension," she says.
"If you feel it should be considered in your favour, keep on, persist." - John Muggeridge
© copyright 1998 Agricultural Publishing Company Limited.
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Millers, wheat board impasse
The Ontario wheat board is at an impasse with millers, and even the province's new mediator can't bring the two sides together.The issue is whether the wheat board should be allowed to set up a new marketing system called declared off-board sales, under which farmers could opt out of the board pools by promising to sell all their wheat in the U.S.
Millers say the plan is unfair. Off-board wheat would be sold in the U.S., where it might at times sell for less than Ontario millers would be paying for wheat from the board's pools. The U.S. millers would thus have an edge in competing for North American flour sales.
For its part, the wheat board says that growers wouldn't choose to go off-board if wheat would get a lower price at U.S. elevators. Plus, the board says it's ready to agree to a volume cap on the plan to be sure enough wheat stays in Ontario to meet millers' needs.
After the two sides reached a stalemate mid-summer, the Ontario Farm Products Marketing Commission (which regulates the province's marketing boards and would have to approve the off-board plan) appointed Chuck Bokor as mediator.
Bokor, a community leadership specialist withOMAFRA, tried to arrange an October meeting of the two sides but has written to the wheat board saying that as long as the board wants to talk about its off-board to the U.S. program, millers say there's no point meeting.
Instead, millers say the board should either continue to sell all wheat through its pools, or it should let off-board farmers sell to either Canadian or U.S. buyers.
Commission chairman Don Taylor warned the board at its August annual meeting that before any plan gets commission approval, "it must at ... least give millers equal access to Ontario wheat." The plan, Taylor said, "must be good for the entire Ontario wheat industry, including millers and downstream customers."
The board has been touting the U.S.-system as a go-slow way to answer the demands of growers who want to market outside their board.
Yet growers such as Lambton farmer Owen Dobbyn say that the best hope isn't a mediator; it's to get the commission out of the board's way. "We elect our delegates but they have no say," Dobbyn told Taylor to wide applause. "This is a sad state of affairs." - Tom Button
© copyright 1998 Agricultural Publishing Company Limited.
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