George Horvath wouldn’t normally raise a fuss about losing $120.
But this time, it’s the principle of a government clawback that concerns the Leross, Sask., farmer.
The Net Income Stabilization Account program audited Horvath’s 1996 statements and found he had overstated his net income by including the gross sales figure from his grain elevator tickets.
Under the program, Horvath can put three percent of his net income into a bank account. The federal and provincial governments match his deposit and sweeten the deal with an interest bonus.
Read Also
Land crash warning rejected
A technical analyst believes that Saskatchewan land values could be due for a correction, but land owners and FCC say supply/demand fundamentals drive land prices – not mathematical models
Because he included freight and elevation charges in his net income, NISA auditors calculated governments deposited $120 too much in his account.
Horvath is one of about 10,000 prairie farmers who have had clawbacks from their NISA accounts. While the amounts may be small individually, they add up to almost $4 million. It’s no small change for a struggling farm economy.
Since the loss of the Crow rail subsidy, one-third of the wheat and half the barley he produces goes toward paying the freight for his grain. Horvath argues the NISA program should recognize this, just as it rewards income from the rest of his grain.
Horvath said NISA is the only way farmers can recoup part of their expenses. From the $120,000 worth of grain he grows each year, Horvath gets to keep about $20,000. In his 50 years of growing grain and feeding cattle, he has seen just about all government farm subsidy programs come and go.
He worries the clawback is the first step toward the erosion of NISA. But he isn’t optimistic about Farm Business Consultants legal challenge. It seems the federal government wants to get rid of all its obligations to farmers, he said.
Defiant, he has included freight and elevation in his net income figures for NISA for the 1997 tax year. And when he files his 1998 application this year, he’ll include the costs again.
“If they want to claw it back, it’s up to them,” he said.
