Deposits to AgriInvest drop

Wednesday, March 31, 2010

by SUSAN MANN

Deposits in Ontario farmers’ AgriInvest accounts are down for 2008 because many farmers haven’t received the necessary government paperwork to make a contribution.

Ontario Federation of Agriculture vice-president Mark Wales says “no one who files tax as a corporation has even received a deposit notice yet. There are more than 4,000 of those people who haven’t even been able to deposit and therefore couldn’t participate because those forms haven’t been sent out.”

Although 23,000 Ontario farmers applied for AgriInvest for 2008, only 16,199 made deposits for the year. The government, which matches the farmers’ contributions, uses applicants’ annual allowable net sales to set a ceiling for contributions. For 2008, the ceiling was $24.6 million. Farmers deposited only $18.8 million.

Wales says he doesn’t know when those farmers will be getting their 2008 deposit notices. “Every time I meet with AAFC (Agriculture and Agri-Food Canada) I nag them. They just put up their hands and say the data is in Winnipeg and they’re trying to make sure its right.”

Agriculture Canada didn’t return calls by the deadline for this posting.

Sean McGivern, National Farmers Union Ontario coordinator, says many farmers have told him they haven’t invested in the program “because they simply haven’t had the cash to invest.”

But Wales disagrees lack of money is the reason for contributions being down. Matching government contributions and being able to make withdrawals when needed to protect margins from small declines will motivate farmers to find the money to put into the program. “All you have to do is find it, stick it in and you can take it back out a month or two later.”

As for the future of the program, Wales says he thinks it’ll continue because banks have been told they’ll have AgriInvest accounts this year. “That tells me the program is not in jeopardy.”

Henry Stevens, president of Christian Farmers Federation of Ontario, couldn’t be reached for comment.

AgriInvest is like a savings account for farmers. It provides coverage for small income declines. Each year, farmers can deposit up to 1.5 per cent of their allowable net sales in the account and receive a matching government contribution. They can withdraw funds at any time. The government contribution plus the interest earned on both the government and farmer's contributions is taxed as investment income upon withdrawal. BF