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| Monday, 05 July 2010 | |
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One way or another farmers and ranchers are going to have to deal with higher interest rates. The National Manager of Agriculture for the Bank of Montreal says it's a good time for the industry to come up with a strategy which could include locking in rates right now. David Rinneard says strategies might include selling off un productive assets or renting equipment and of course dealing with higher interest. Rinneard says on the other hand there may be farmers that are comfortable with the thought of paying more interest. "For those people we're recommending that they earmark what would be a payment associated with a higher interest rate", he says, "but rather than allocate that surplus cash flow to interest payments at this time they can allocate that toward principle reduction". Rinneard says not only does it ensure that money is already set aside when the rates rise, it lessens the effect of higher rates with a reduced principle. Rinneard suggests Agri-Invest might be a hedge against rising interest rates and is appealing with the government contributions made to the program. |
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| Last Updated ( Monday, 05 July 2010 ) |
