Cynicism about the new farm income assistance program ran rampant last week as more farmers began to work through the application forms.
Bob Friesen, president of the Canadian Federation of Agriculture, said the group wants the government to allow farmers to include their losses when calculating how much their income dropped this year.
Friesen said it’s inconsistent that losses from 1998 are not considered when applying for 1998 benefits, yet will be used in 1999 to calculate whether farmers’ income has fallen at least 30 percent from the previous three years.
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The CFA also objects to the automatic deduction of three percent of eligible net sales from any Agricultural Income Disaster Assistance benefits, the money the government might otherwise contribute to Net Income Stabilization Accounts.
The program seems to be designed to save money, not save producers, said Friesen. The government must ensure it gives as much of the AIDA funds as possible to the farmers who need it the most, he said. If the money isn’t used, Friesen predicts some pundits will judge the farm income crisis as exaggerated.
“If we hear that line, there’s going to be an awful lot of problems,” said Friesen.
Complicated calculations
Part of the problem with AIDA is that the forms and calculations involved are not straightforward, said Terry Betker, a farm financial consultant with the accounting firm Meyers Norris Penny.
“There is no easy way to determine whether or not a farmer is going to qualify,” said Betker, making the program “virtually unbankable.”
Meyers Norris Penny has worked out a calculation to get a rough idea of whether a farmer qualifies for AIDA, he said. For a minimal cost, the firm will advise a farmer whether it’s worth the cost of having an accountant complete the forms.
But a spokesperson for the AIDA administration in Manitoba and Saskatchewan said media reports have overblown the complexity of the forms.
“It’s not as daunting as it’s being made out to be,” said Reg Grenier.
The form is seven pages long, with most of the space left blank so farmers can list their information.
Grenier said farmers who aren’t enrolled in the NISA program also have an additional five pages of information to complete about their income and expenses for the past three years. The form also includes a worksheet to estimate the AIDA payment, but this part is optional, said Grenier.
He said farmers who have up-to-date books and records should be able to complete the forms themselves. However, Grenier noted 85 percent of farmers use an accountant or tax filer to prepare their income tax statements, and he expects many will use them for the AIDA application.
So far, based on the similarly designed income disaster programs in Alberta and B.C., average payments have been around $35,000, said Grenier.
He noted this average is based on a small number of samples, but said it should be some encouragement for farmers to complete the AIDA applications.
“If that takes two hours of looking through your books, it’s probably worth it,” he said.
So far, the AIDA administration has received about 100 completed applications, mainly from Saskatchewan farmers, but had been taking 400 to 500 calls per day, many of them requests for applications.
Grenier said AIDA administrators will meet with groups of farmers to explain the details of the program on request. So far, AIDA has run 15 presentations in Manitoba and 12 in Saskatchewan, with several more scheduled.
In Alberta, the program is being administered by the Farm Income Disaster Program. Grenier said the AIDA forms are based on information required for FIDP.
