Cheques have begun flowing under last spring’s changes to the Canadian Agricultural Income Stabilization program, in which $900 million in new funding will be sent to producers under the CAIS inventory transition initiative, or CITI.
All existing applications for 2003, 2004 and 2005 are being reprocessed using the new criteria for evaluating the value of farm inventory. As of Nov. 20, 3,000 cheques a week have been sent out under the federally administered CITI program.
A total of $95 million has been mailed so far.
“We are reprocessing the applications using a new method of evaluating inventory,” said Ellen Funk, manager of business risk management with the CAIS program.
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“With the old method, we used the end-of-year price. With the new method, we are comparing the beginning-of-year and the end-of-year price to value inventory.
“So if the price of cattle fell from Jan. 1 to Dec. 31, then that is more accurately reflected using the new method,” she said.
Funk said cheques started to be sent at the end of September, and the officials are close to finishing reprocessing for 2003.
The work has not been without glitches, however. Charlene and Craig Kaartinen, who own Star Lake Beef, a 110 cow-calf mixed farm near Eriksdale, Man., are frustrated with the changes.
The third-generation farm couple, who have been in business since 1987, operate on a 50-50 ownership basis. But when they received documents from CAIS, they were surprised to see that they were both listed as having zero percent shares.
“It shows that I had a greater loss with their new calculations, which to me would mean that I should have received a cheque. But because my share shows zero, I’m getting zero of the new payment,” Charlene Kaartinen said.
“I asked them if this was a keystroke error, but they said their screen was showing 50 percent share.”
Funk said that about 10 new staff had been hired to assist with the review effort, and admitted that clerical mistakes are not unheard of.
“But it’s not an issue that we are hearing about repeatedly,” she said.
Kaartinen urged any producers who are submitting forms to make sure their information is accurate.
“Anybody who is submitting information should double check it, because you may submit it one way and when they are retyping, things get changed. We found that pricing and values had been changed. It was little things that affected the end result,” she said. “It gets frustrating.”
Kaartinen is concerned that producers who might have hired out the filing of their CAIS forms may not be aware that a single mistake could affect their payout, or whether they get anything at all.
“They might look at it and think, ‘it says zero percent, so I don’t get a payout’ or ‘I guess I’m not eligible.’ “
When dealing with CAIS, producers should make sure that the bureaucrats document every instance of communication, whether by phone, fax or e-mail, she added.
“If it hasn’t been documented, it’s just as if you haven’t phoned in,” Kaartinen said. “I’ve learned the hard way.”
Funk said that requests for basic information are not tracked, but if personal information is given or follow-up is required, then the calls are documented.
Depending on the commodities produced, some CAIS applicants might see no impact at all, Funk said. In cases where there have been overpayments unrelated to the new inventory evaluation, all collections have been suspended until Jan. 1.
“With the CITI program, we may be able to collect overpayments off of some of those payments,” she said. “Under the reprocessing for the CITI program, if you would have been worse off using the new inventory evaluation method, there will be no attempt to collect money. It’s neutral. So only if you are better off as a result, you’ll get a payment.”
For 2006, the CAIS program will incorporate the revised method of evaluating inventory on a permanent basis, Funk added.
Robert Vosters, a cow-calf producer near Marquette, Man., took issue with the decision to exclude breeding animals from the CITI review.
Livestock are a marketable commodity, just like grain, he said. Any sales income or purchase expense is fully reportable in the year, just like grain. He said the Canada Revenue Agency and the banks do not distinguish between these commodities.
Vosters added that in cases where breeding animals were actually sold, they should constitute a realized loss.
“Bottom line, if they are going to pay out on a paper loss for one commodity, they should pay out on all commodities. Treat everyone the same,” Vosters said.
“If they want to pay out just to grain farmers, come out and say it.”
Jana Lerner, communications officer with CAIS, said producers appealing a decision based specifically on the old inventory evaluation may choose to continue their appeal or wait for the revised process to be completed for each year.
Applications from 2004 are now being looked at while work on 2005 will start early next year, she said.
All producers involved in an appeals process were contacted by telephone earlier this year and given the option of continuing their appeal or waiting until the new inventory evaluation process was completed, Lerner said.
