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Drought-stricken ranchers in Saskatchewan seek tax relief from federal government


July 21, 2015   by Canadian Underwriter


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The Saskatchewan Stock Growers Association (SSGA) on Tuesday asked the federal government to “take the steps required to allow drought stricken ranchers to defer taxes on livestock they have been forced to sell due to dry conditions.”

Livestock producers in some areas across Saskatchewan are reporting hay yields that are between 50 and 70% below normal

SSGA president Doug Gillespie announced the request, noting in a media release that “livestock producers in several areas across Saskatchewan are reporting hay yields that are from 50%-70% below normal, as well as poor growth on pastures. As a result, many producers could be forced to sell portions of their breeding herds.”

While recent rains will improve pasture conditions in some areas, “it is too late for many hay crops, as well as any producers forced to sell due to poor pasture growth earlier in the season,” Gillespie added.

He said that there have been reports from producers indicating that hay is in short supply across the province, with prices running at record high levels. “We expect many producers will find it difficult to find the feed required to carry their cowherds through the winter, depending on whether some drought damaged grain crops can be salvaged for forage to be used in cattle feed.”

Recently, Saskatchewan’s Minister of Agriculture, Lyle Stewart, and Environment Minister, Herb Cox, acknowledged the severity of this year’s drought conditions by making 90,000 acres of provincial Fish and Wildlife Development Fund Land available to producers short of pasture, the release noted. Earlier this month, federal Agriculture Minister Gerry Ritz also announced changes to crop insurance that provide producers greater flexibility around the use of drought-stressed crops for grazing and greenfeed forage production.

The SSGA’s tax deferral request is aimed at a federal policy provision whereby the Ministers of Agriculture and Finance can designate certain areas as “significantly impacted by drought,” the release said. This in turn allows producers in these areas to defer a portion of the tax due on breeding animals sold due to drought until the following year. This provision helps producers retain some of the cash required to rebuild their herds when drought conditions abate.

Related: City council in Sturgeon County, Alberta declares state of agricultural disaster due to drought

“We believe that implementing the livestock tax deferral provision will help ease the financial pain for producers that are selling into a depressed market for bred cows and allow them to rebuild their herds once growing conditions have improved,” said Gillespie. “Producers will appreciate knowing as soon as possible if they will qualify for a deferral, given the impact it could have on their business decisions.”

The request came a day after city council in Sturgeon County, Alta. voted unanimously to declare a “state of agricultural disaster” due to a recent drought and the impact on the livelihood of local farmers. Last week, Alberta’s Parkland County also declared a state of agricultural disaster. Moisture levels in some areas of Alberta are at the lowest levels recorded in the last 50 years.


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