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Well, you wanted the CWB gone...

8K views 50 replies 30 participants last post by  Licensed to kill 
#1 ·
#2 ·
Things change over time, whether you like it or not, adapt or die. What works for you does not necessarily work for somebody else. Every business faces new policies and challenges overtime. People are getting really pissed at farmers and all the breaks they get to amass wealth.
Personally the CWB was just a pimp find your next trick at ridiculous fees. deferring you cheque until next year was a way to avoid income tax because you sold a lot of grain in that year. Go cry on your bag of money about the CWB.
 
#13 ·
And what kind of drugs are you on -- I find that it is really a waste of time trying to grow wheat now I just do it because of rotations as it is really a pain in the ass to market that sh** even through the G4 outfit . Had last years production all in the bin until aug last year and delivered into this crop year as the prices really sucked now am sitting on this years production as still not impressed with the returns .
 
#5 ·
CWB never had anything to do with pulse crops, oil seeds, or cattle. And if we aren't allowed to defer anymore it will be everything. So we are going to complain that we will be forced to use the same rules as every other industry ??? Learn how to deal with these things, it's business.
 
#6 · (Edited)
Yes I think we should complain. Agriculture has always been treated specially as a business (cash-based accounting, tax exemptions for passing the farm to the next generation, etc), and rightly so. The fact that farming is losing its special status tells me we're losing the PR battle to tell Canadians what farming is really about, how it's done, and how essential it is to life and death for Canadians, and also everyone on the planet. In short farming can never be treated as just "[another] industry."

Countries like China realize this and are taking dramatic steps to guarantee their food supply, buying up land around the world. Sadly, most Canadians no longer care about local farm financial difficulties, droughts, or floods. Their grocery store shelves always seem to contain food. It's a tremendous false sense of security.

I'm not saying it can't be a business and function according to a free-ish market without significant subsidies. But at a certain point it makes good sense to treat farming specially and to lend public support when it makes sense.
 
#9 ·
Not being able to defer grain cheques will have a huge impact on how I run my sole proprietorship farm. And I sure as Christ am not able to go "cry in my bag of money". It's just a good tool to Use in the boom and bust business of farming and for me doesn't have a **** thing to do with the Cwb. Between this and the prov. gov budget I'm very frustrated.
 
#11 · (Edited)
Very good point. I don't think non-farmers realize the extremes of this boom and bust aspect of farming. It's not like normal businesses that move in longer-term cycles. Most of the factors we're dependent on are beyond our control. The small number of concessions that government has made for farmers (well society, really; it should be considered a part of the social contract) are important.

It's not a business that most sane people would ever want to work in, if they were in it solely for the money (steady income). Yet it's a business everyone is dependent on to eat. That point should be driven home to politicians and citizens everywhere. In other words, it's in everyone's interest everywhere that farms survive the bad times.

On the other hand, Conservative leadership candidate Rick Peterson is campaigning on the idea of eliminating corporate income tax entirely, which is an idea I am totally in favor of, which would make the income deferral thing a moot point. I've never seen the sense in corporate income tax. Normal companies don't pay this income tax. They simply pass it on to their customers who then pay it through higher prices. And farms can't do that. So it's just a burden on farmers and has little effect on corporations.
 
#14 ·
It's when you deliver grain to the elevator, but then don't take payment until a later date that you tell them, usually in the next calendar year or after your business year end. At that future time they send you a check. Under the current rules you don't have to report that money as income until you get the check the following year. It's a way to keep your current year income low for tax reasons. You might want to do this to keep your current year business income in the $500k tax bracket, or for other reasons.

If you have a really good year, it can help spread the income out over the next year, which could be a worse year. Helps even out the boom and bust nature of farming.

I certainly hope that if they do make this change that they don't force us all into accrual accounting, as I think that would have a lot of annoying consequences. For example, we would have to pay our taxes monthly or quarterly based on our estimated income for the year. This would be a problem for farms since we only get paid at the end of the year (or much later depending on the crop!), but would have to pay the taxes in the year the products were produced. Cash flow nightmare.
 
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#16 ·
Torriem makes some great points on this. This is a pretty unique industry being so dependant on weather and influences beyond our control. We are competing in a world with other countries who bend over backwards for their farming industry (US, EU). We can't pass costs on to our customers. We sometimes have to or chose to hold grain over from one year to the next as prices can be terrible or markets aren't available. This option of deferrals simply helps us in those rare boom years or years where we sell more than 1 years production. As the article mentions we are also bearing risk by deferring cash tickets as the company we sold to could go into bankruptcy or the grain we carry over spoils. I don't think the CWB should be part of the discussion. With this bleeding heart and cash federal government we need to paint ourselves as a vulnerable minority if we want to receive any advantages for our business from these Libs. I'm so sick of sending all this tax down east to never be seen again in the west when it's better spent in our own communities by our own people. We need to be able to utilize our profitable years to help weather the poor years and if they tax the **** out of us when we finally hit a home run, it's going to be that much more difficult to ride out the long term storm. It sounds like they have already made their mind up on this issue, but provide feedback to them in any way you can. It certainly wouldn't hurt to get the women in your life to speak up as well. Their voices will go a long way too.
 
#20 ·
There are a few problems with this.

Deferring a grain ticket can be a decent way to stabalize income year over year. If I have a great year this year and next is a crappy one by deferring grain tickets it can help with that stabalization.

A bigger issue I see is if it is eliminated then something needs to be done regarding the lack of delivery availability. This year as well as many others I have had to wait 1-3 months from my contract date to delivery date. I.e I contracted for dec delivery and didn't get to deliver till march. In those cases my cash tickets do not flow into the year in which I actually did contract to sell. Unless they go take my unsold grain as income in the year I produce it, I don't see how the cash deferral thing is a big issue for the government.

If I defer my cash ticket to next year and have the same year financially the next and defer to the next, all this has done is move the income from one year to the next, the government still gets its money, simply a one year lag. The governments in Canada doesn't seem to care about the farmers and food policy. I wish our country would feel the effects of a lack of food for a few years and then maybe they would realize how much farmers and food security do for a countries stability and safety.
 
#21 ·
I don't see a problem with getting rid of the defered grain tickets. As mentioned, every other business claims the income when they sell it. (And no, we don't defer grain sales.)

However, suddenly pulling the rug out from under farmers that do use this option isn't right either. There should be notice that this is going to happen X years down the road so that farmers can gradually adjust their sales to accommodate. Otherwise, there will be a farmer out there that suddenly has to claim 2 years of sales in a single year.

Andrew
 
#24 ·
Seems like the government is picking a dumb fight here not farmers. You can't cheat death and taxes so the taxes are due anyway eventually. This policy is designed to give the industry the grain it needs in the commercial pipeline WHEN it needs it. Paterson in Winnipeg piles beans in bunkers, a lot of which has to get deferred or it wouldn't all get delivered. They can move the beans when they need to, the farmer doesn't have to take the income all in the same year. Don't forget a crop is marketed in two calendar years. What's wrong with letting the farm choose which year the income is declared in. This is a GREAT system for the entire industry and means nothing to the government in terms of taxes eventually due. It is a DUMB fight for them to pick and helps nobody including themselves.
 
#25 ·
Most of the big grain traders offer deferred payment here, have used glencore, graincorp and emerald in recent times. Sometimes they have ok money for deferred also.

Running a pool of deferred payments and deliverys/sales is a nice tool to manage cash flow and a safety net for a lean year.
 
#26 ·
We defer a lot of money every year. It really only saves you the first year. After that your in the same place you started. If they do get rid of it then expenses will have to be adjusted to offset the extra income. The prick won't get an extra dollar from me if I have to put three years of fertilizer on at once to make sure I don't go above the low corporate tax rate.
 
#33 ·
Wow I can't believe anyone would give up the deferred payment option! I use it pretty regularly, I can usually sell Dec. grain for the same price as Jan. have it delivered and pick up a check on the first business day of the year and deposit it. If I had to wait and deliver grain in Jan. instead that could put a real bind on cash flow, especially should the weather turn bad and making it difficult to deliver. After prepay expenses I need the money in Jan., it makes a really big short few day swing in the account. I sure would be in trouble without it.
 
#34 ·
This is a really stupid question...

If you deliver grain (cattle, sell a combine or tractor or whatever) and make an agreement with the buyer not to pay you until after your year end, you are breaking the law?
 
#35 ·
Not sure about it if new rules come in but my accountant told me as long as both parties claim the income/expense in the same calander year it's all good. If I sell you 10 cows you can't claim the expense in December and me wait till January to claim the income.
 
#38 ·
I see a logistical nightmare for grain companies. A farmer has a good year and has taken in all his income he wants for the year and has pre-bought inputs, he's not going to haul anything out from end of October to year end. Regardless of any price premiums it won't off set the increase in taxes. November- December the elevators will be empty. January 1st will have line ups 5 miles long. What do you think the elevators will do for prices when that happens?? I used to be caught in the cycle of defer- pre-buy, until we incorporated, the last few days and the first couple day of the year were quite a juggling act/nightmare! I see deferring as a very useful tool for farmers and I hope they don't change it, it does help to even out the good and bad years. I know people are comparing farming to other businesses, but very few if any have the income swings that farming does. As far as blaming this on there being no Wheat Board......WTF????? And as far as blaming an open market for poor wheat prices, ya there was never bad wheat prices when they were running the show!!!! lol But anyways, the CWB, that's a whole other story.
 
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