Cash flow

[grassfarmer]

Pondering the cash flow situation today - does anyone out there have any hint of when CAIS payments for 2003 might be issued (not advance payments) Also how much do you expect the payouts to be cut back by the Feds as a result of too many claims and limited money in the pot?
I understood the calf-setaside payments were supposed to start in late November any more info on that?

[blackjack]

good question about the 03' CAIS payments. I always think it is ironic when Governments campaign on how much they are helping the ag industry, then when the industry is almost brought to its knees none of that help is anywhere in sight. The CAIS payments may not amount to much but every little bit helps.

[countryguy]

Got my Cais payment last week and was actually shocked at the amount.It was over double what the accountant(which I had to pay VERY well) told me I was going to get.Same thing happened with my aida pymt.The cais pymts ARE flowing.

[k-way]

grassfarmer

We got the second installment of 2003 CAIS a couple months ago - not that it amounted to much ($1000 total for 50-head operation) because of our so-called "equity loss". But we got ours pretty quick because of all the phone calls we made trying to get the first half. Like to the ag minister's offices, AB agriculture, CAIS (everyday for weeks!), etc. But they claim that there should be no limitation on payouts due to limited funds available. Likely story for those of you still waiting. But know also that 2004 advance payments have been flowing for some time as well. We got ours at about the same time as our 2003 final payment. The 2004 program with the changes to compensate for equity loss was much more helpful, but no hope of having the changes made retroactive to 2003.

As for the calf set-aside program, anybody expecting to get CAIS money for 2004 (or already with an advance) is advised STRONGLY to wait until after January 1st to apply. The application deadline is January 15th. The infinitely knowledgeable people at CAIS don't yet know how the payments and inventory for the set-aside program will affect their program. But as of yet, there is no plan to exclude the income or calves from CAIS calculations. Therefore if you apply before year-end, the small gains in income will most likely be offset by penalties against your CAIS claim. As for those of you who have already applied, my dad got his payment several weeks ago. Although I have no idea how come he got it so quick.

countryguy

I think you need to get a new accountant. FYI we did our CAIS ourselves, but we know many neighbors who have been charged more by their accountants to do CAIS than to do their income tax. And numerous who paid more to get it done than they received in payments. We passed that tidbit on to AB agriculture, both minister's offices, and to the CAIS office. Needless to say, they were all "extremely shocked" to hear that this was the case. How typical.

[farmers_son]

Grassfarmer: Cashflow is certainly a concern. The uncertainty concerning the date of arrival and the amount of the CAIS cheque just compounds the uncertainty we face with the cattle situation. Although this may seem strange I would like to see an option of being able to defer the CAIS cheque to the New Year for those that wish to do so.

I should explain before anyone shoots me down saying if tax is a problem then I don’t need CAIS. Tax management is certainly a big part of cash management. Having the CAIS cheque arrive in the mailbox on December 30 creates a cash flow/tax problem for some producers. Now not all producers hard hit by BSE are going to have a tax problem but some will for a number of reasons. Can’t afford to buy the usual expense items, having to reduce herd inventories, no money to reinvest in more cattle and so on. BSE or not we still have to eat and pay down debt and that is taxable. In normal times the producer can manage his tax situation by timing the sale and purchase of cattle and feed. In the present crisis that may not be possible as credit lines are maxed out, inventories already gone, CCA is depleted because no money is available for capital purchases. When the CAIS cheque arrives the last few days of December it is difficult to buy expense items, especially cattle, to manage that income and the related tax implications. Also having to rush out and make year end purchases that would not normally have been made until much later the following year in order to avoid tax further compounds the farm’s cash flow problems.

Although money is always welcome, tax is not. Especially when there is no money to pay it. If we could have the option to defer the cheque to the New Year it really helps with the tax bill. Most farms are cashflowed on deferred income tax and it would help if CAIS realized that. Having the option to defer the CAIS cheque would likely encourage some producers to send in their CAIS Supplementary a lot sooner. Certainly being able to defer the CAIS cheque would give producers who simply do not have the available cash to pay their tax another tool to manage cash flow/Income Tax.

Can’t afford to pay the tax is a real concern for some producers.