The Alberta Wheat Commission (AWC) warns the Federal Government that eliminating deferred cash purchase tickets for grain sales as outlined in the federal budget released last Wednesday would severely hurt farmers’ income.
This important cash flow management tool allows farmers to defer income on grain sales to balance income throughout the year, avoiding excess swings in taxation levels and encouraging farmers to deliver grain into good market opportunities.
“Many farms use this tool to avoid having to choose between losing a sale that might bump them into a higher tax bracket that year, or lose the ability to maximize their revenue due to severe taxation swings,” said Kevin Auch, AWC Chair.
Losing this tool would cause a ripple effect throughout the agri-food value chain since the lack of cash flow management could result in farmers’ inability to make business purchases year round. Canada’s agriculture industry’s competitiveness would also be affected: If farmers are not able to deliver grain when market opportunities arise because of tax swings, Canada will miss out on sales to international competitors due to a lack of available inventory.
“For many farmers, eliminating this tool also eliminates the option to sell grain when there is a good price for it. Grain would end up sitting in storage on-farm rather than being sold into the marketplace. This disruption in cash flow is not only a loss to farmers but to the entire value chain.”
Source : AlbertaWheat