The federal government readily admits that the financial component of the recently announced Farm Families Options Program, more simply referred to as Options, offers only short-term financial relief for low income farm families.
The government estimates that about 26,000 farm families and individual farmers in Canada earn annually less than $25,000 and $15,000 respectively in total income from farm and off-farm sources, and therefore qualify for the program.
Greater long-term value, however, may result from the conditions that a producer must meet to qualify for support funds. These conditions are not difficult and are intended to improve the producer’s business skills.
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Within two years of applying for the program, the producer must participate in either a Farm Business Assessment, or FBA, offered by the Canadian Farm Business Advisory Service, or an individual learning plan and skills training provided by the Canadian Agricultural Skills Service.
Other possibilities are pre-approved equivalent-instruction programs offered through other services. It is the responsibility of the applicant, however, to ensure such alternate programs are eligible and to cover their cost.
The FBA has two components. The first is an initial farm financial assessment by a certified consultant that includes a review of records, analysis of the current situation and a business profile.
Up to three days of consultation are budgeted for this purpose.
The second part provides up to two days of consultation to develop a written financial action plan that includes ways to set business goals, manage cash flow and increase profitability.
The five days of FBA consultation are valued at more than $2,000, but all fees are waived for participants in the Options program.
Follow-up consultation is also available at no cost to see how the producer is progressing with the financial plan.
To qualify for this program, a producer must have a minimum of $10,000 in annual gross sales. Beginning farmers may also participate if they can demonstrate a capability of earning the minimum requirement for annual gross farm sales.
The individual learning plan has the same minimum gross farm sales requirement as the FBA.
Spouses also qualify for assistance, but net family income must not exceed $45,000 per year.
Once a person enrols in the Canadian Agricultural Skills Service, he or she will be assessed for strengths. This will identify skills such as farm business management, accounting, finance and human resources that are needed to make the most of a farming enterprise.
The assessment might also direct the individual to courses that will lead to other types of employment.
Funding will be provided to support both formal training in a college program or informal activities such as workshops and short courses. Tuition fees, course materials and certain other costs associated with skill development are covered under the plan.
Larry Roche is a tax analyst with farm
taxation and planning specialists Farm Business Consultants Inc. He can be contacted at fbc@fbc.ca or call 800-860-7011.
