Thank you.
Some dairy farmers, hog farmers or people with mixed farms had debt levels of 50% to 55%. However, these big producers have tremendous value in terms of quotas and land.
In my constituency, land values dropped 40% to 45% in the last two years, and even the value of quotas is showing a downward trend. The new approach is to lend quotas to the next generation of farmers. That will not give farmers the full value of their quota, which they will have to buy back in the future.
How will banks react to these drops in farm equity, which can be major for some producers? There may be a drop of between $1 million and $2 million for farms that may be worth $4 million to $4.5 million and have $3 million in loans to pay off. These farms will no longer have any equity.
What will the banks do about this situation?