The federal government’s Greencover Canada program will pay about $2 million to farmers in its first year of operation, but some producers don’t want their share just yet.
“We get mixed messages from the producer community right now, some hoping to see the money before the end of the calendar year and others hoping not to,” said program assistant manager John Sharpe.
Farmers have told him a payout could mess up their tax planning.
“They generally don’t like a surprise cheque at the end of the year that brings them some additional taxable income that they had not anticipated.”
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And although Sharpe said the federal government is not purposely delaying program payments to accommodate those who would prefer to be paid in the next calendar year, some farmers shouldn’t count on a cheque before the end of 2003.
“I’ll be the first to admit it’s probably a little later than we had expected.”
But he said that’s primarily because farmers haven’t returned the signed land-use agreements the government needs before it doles out cash.
Sharpe said 102,500 acres of farmland were eligible for the program, which pays producers to convert environmentally sensitive land to perennial cover. Applications totalled 200,000 acres, so a number of people were declined.
All 766 successful applicants will receive the minimum $45 per acre payment for planting tame forage. The initial cheque will be for $20 per acre.
Another $25 per acre instalment will be paid out next year following an inspection of the perennial cover. The average payment for 2003 will be $3,030.
Saskatoon farm accountant Allyn Tastad said his corporate clients are not calling for a deferral of the payment to next year. The year-end for most corporate farms doesn’t coincide with Dec. 31 and their tax rate is much smaller than what individual farmers pay.
“There are still a few farmers who are managing their tax situation but for most of these large corporate farms it isn’t really an issue,” he said.
One group that could be pushing for the delay are pension farmers, who are over 65 years old and still farming a few quarters of land.
“They’re trying to even out cash flow,” said the accountant, who is a partner in the firm Hounjet Tastad.
He said he has heard complaints from unhappy customers who were unable to access what many consider to be a rich government program because they had the wrong class of soil.
The application deadline for next year’s program is Jan. 31, 2004.
