Low Farm Incomes

Low farm incomes again is the issue this fall with grains and oilseeds prices at twenty year lows. There appears to be little in effective farm programs to assist in this situation. The CAIS program, as predicted, gives little help in this regard and there doesn’t seem to be any ad hoc support like there was for the livestock industry when the devastating impact of BSE hit the industry. However, if you recall ad hoc BSE payments were announced around the past provincial and almost federal elections. A cynic might say the best thing for agricultural would be another election. Stay tuned.

As you probably know OMAF has transferred the processing of CAIS applications to Agricorp, the crown corporation that administers crop insurance. This should be positive as it removes the processing to a more independent operation. However there is still no written policy book to give concrete guidelines and an element of transparency to the program.

There have been some changes in the positive direction however. It appears that the modified accrual inventory rules are going to be changed one step for the better. Inventory will be categorized into two types - inventory for sale normally in one production period such as crops and market livestock and secondly, breeding livestock kept for one than one production period. The first category will have rules similar to normal accounting rules and the latter will still use modified accrual rules. The effect of this change will bring in inventory price losses of the first category into the CAIS calculations. The question remaining is when or for what year are they going to start implementing this change?

Another change is the elimination of the deposit requirement. It has been replaced by a proposed annual fee of .45% of the reference margin amount, or $450 per $100,000 of reference margin. This will make things simpler and have less impact on ones borrowing capacity but it has been suggested the fee is a bit rich and should be lowered.

You should soon be receiving your Statement of Calculations for Program Benefits for 2004 from CAIS. Please fax or mail our office a copy when this arrives. There were sufficient problems with last year’s processing that a quick review of the processing is warranted so as not to miss out on any entitlements

In addition to the above, the government has announced for 2005 an Interim Payment Application whereby producers who anticipate a CAIS payment for 2005 can receive a portion of the estimated assistance early. To apply, producers must complete and submit the application to Agricorp by December 31,2005. If you need any assistance in this regard please feel free to contact our office.

2006 Wanda Wenzlawski