Drought Affected Ranchers Would Benefit From Tax Deferral

Saskatchewan Stock Growers Association (SSGA) President, Doug Gillespie, today 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.

In announcing the request Gillespie said, “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.”

Gillespie added, “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.”

“We have had reports from producers indicating that hay is in short supply across the province with prices running at record high levels,” said Gillespie, “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.”

Gillespie commended Saskatchewan’s Minister of Agriculture Lyle Stewart, and Environment Minister, Herb Cox, for recently acknowledging 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. Gillespie also welcomed changes to crop insurance announced earlier this month by federal Agriculture Minister, Gerry Ritz, and Saskatchewan’s Lyle Stewart, which 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. 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.

“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.”

For more information contact:
Chad MacPherson, General Manager
Saskatchewan Stock Growers Association
306-757-8523
ssga@sasktel.net