Agriculture and Agri-Food minister Chuck Strahl announced last week federal tax deferrals to livestock producers in Northwestern Ontario impacted by this past summer’s drought, but farmers in Rainy River District are not pleased with the response.
“Deferring tax really isn’t the problem, so we don’t think it is the appropriate solution to our request at all,” said Trish Neilson, president of the Rainy River Federation of Agriculture.
Owners of breeding livestock who were forced to sell all or part of their herd this year due to the drought conditions will be eligible for a one-year tax deferral on 2006 income from these sales to help replenish their breeding stock for the following year.
“I don’t think too much of it,” echoed Ken McKinnon, president of the Rainy River Cattlemen’s Association. “It’s going to offer little or no benefit to farmers in the district.”
He said this is because of the lack of immediacy.
“My interpretation of it is it defers income for 2006 into the following year, but on account of all the things that have happened in recent years to especially the beef farmers, with BSE, drought conditions, lack of kill and processing facilities, our farmers here are in a very depressed income bracket,” McKinnon noted.
“There’s not that many who will have income that they can defer into next year,” he argued. “If you have no income to defer, what good is it going to do?”
McKinnon said farmers are trying to get some emergency-type funding in place to feed their cattle.
“To feed them today—you can’t wait until next year to feed them,” he stressed. “The income is needed now, not in the following years.
“They just don’t get the message.”
Neilson also indicated when farmers sell their cattle, they typically don’t get the price they’re worth. In fact, she said recently the chances of selling a cow for cull prices have jumped.
“So selling breeding stock probably didn’t jack your income to any great degree and [the tax deferral] doesn’t give you any compensation for the loss you are taking on that cow,” she explained.
For instance, if a farmer has a bred heifer worth $1,300 and sells it because they have to, the farmer might get $300 or $400 for it.
“Your income went up a few hundred dollars, but you can’t replace her [the heifer] the next year,” Neilson noted. “They make it sound as though if you have a cow worth $1,000, you can just turn around and sell it for $1,000, but that’s not the way the cow market is right now.
“When you go to replace one, you end up spending more money.”
Both Neilson and McKinnon also mentioned problems with the provincial Canadian Agricultural Income Stabilization (CAIS) and Production Insurance (PI) programs, formerly Crop Insurance, which are meant to provide protection for different types of losses.
They said this summer’s drought resulted in farmers being short on hay and having to invest in water systems.
“And the tax deferral does nothing to address that issue,” Neilson charged, noting the provincial program only helps 51 of about 300 producers in the district.
“That’s less than 25 percent of our farmers and leaves the rest of them out in the cold,” McKinnon stressed.
“I would say probably just about all the land was over-pastured this past season,” he added. “Now were going to get into a situation where next year, [on] a lot of these pastures, the re-growth is going to be very slow.
“The effects of this drought situation, it’s probably going to take the producers of the area two or three years to recover.”
Neilson said district farmers had requested $150 per animal unit to address the real cost of the drought.
“The reason we have to ask for the money is the CAIS just doesn’t address the issue,” she remarked. “Until they get the programming structured right, they’re going to get these requests steady.
“They have to go back to the real problem, which is the programs.”
McKinnon noted four farmers in the district already have sold off their entire breeding herds.
“All those cattle are gone,” he said, adding he doesn’t know how many additional farmers have cut their breeding herd down to a level so that they can feed the remaining ones.
“It affects the rest of the economy of the district,” McKinnon warned. “The producers will not be buying feed supplies for those animals, so it’s going to effect all those businesses that supply for the farmer.
“It does have a real snowballing effect.”
But the farmers plan to keep pushing for the funding and Thunder Bay-Rainy River MP Ken Boshcoff is offering his continued assistance.
“I’m well aware, from speaking with the representatives, that that’s not quite what they wanted because of the huge impact on the farm community,” Boshcoff said Friday, referring to the tax deferral announced by Strahl.
“That’s why I’m trying to pursue other avenues in terms of support,” he noted, adding he has a meeting scheduled with Strahl in early January.
“It’s far from over and I’m still on the case,” he vowed.
Still, Boshcoff said he’s pleased with the progress so far.
“Let’s look at it this way—we’ve got the minister acknowledging there’s a drought,” he remarked. “We’ll do a follow-up because we want to pursue any other angles that are available.
“I’m well aware of the limitations, but I think we have the minister now understanding our issue. . . . We’re speaking with one voice and it’s making my ability to present to the government that much more forceful.”
Boshcoff noted the minister’s office had to verify the weather documentation and has acknowledged there is a drought situation here.
“That is very clear to them,” Boshcoff stressed. “There’s no disputing the issue.”
Meanwhile, both McKinnon and Neilson indicated they are going to keep writing letters.
“Every opportunity I get I try to get the message out there,” McKinnon said. “Hopefully they’ll come to the party, otherwise all we can do is do our best to cope.
“We had been increasing our numbers and it was helping the economy and now the way things have gone in recent years, we’re on a slide the other way—it’s discouraging.
“The farmers need the resources in order to sustain their herds,” McKinnon stressed. “And we need it now. That’s it, plain and simple.”
Fort Frances Times
Local News from Across the Rainy River District
