Payment on Non seeded Acres?

[Hopperbin]

Sask. 99 are you saying that if you voluntarily summerfallow you could have a structure change and if you could not plant because of too wet you would not? So who will judge that one? If there is a structure change on unplanted acres then that is a screw job. Saskfarmer you don't need a 140 per acre margin. Think about it, a farmer with a 140 per acre margin taking on 50,000 acres of land today that will not get planted, at his max payment will be 7 million. Pays for a little land rent I believe.

[parsley]

You know, hopper, if we want to keep any semblance at all of a free enterprise system, we have to be responsible for our farming decisions.

Group after group after group lining up at the government trough will destroy our standard of living.

Each one of us has a personal responsibility in agriculture, to choose what is decent.

Decent.

Pars

[Hopperbin]

You know I was driving around today and I should not give out this information but what the hell. I have a neighbour that in the last 3 years grew barley and it went malt when malt was worth a lot, he then grew canola for 2 years in a row and lucked out a bit because he was not 0 till and grew 40 bushel crop back to back n ow has his land all planted. His ref margin is going to be one hell of a lot higher than anyone else's in the area like top. Now say he has a corporation. Other neighbor that has cropped 15000 acres for 8 years now and completely screwed up everything. Realizes what I just have and purchases farmer A's corp and Corp A purchases Screwed up farmers other corp. Now screwed up farmer has millions of dollars in coverage that he did not have before. How much will screwed up farmer pay farmer A for his 4 quarter corporation???

[Hopperbin]

Parsley some investors might actually be doing this.

[parsley]

You make such an important point.

Sharpies.

The world is full of sharpies, and when government gets too much involved in agriculture, the sharpies siddle in.

Some farmers could occassionally make needed use of some farm aid, but it has gotten to the point where corporations of "investors" harvest farm aid 'schemes'.

So-called professionals are too easily able to transfer farming/farmer information these days.

Not-true-farmers harvesting government money targetted for agriculture, will skew agriculture. Pars

[parsley]

Hopper, no one could get that high of a payment because of a couple reasons:
a) you would be over the cap per entity
b) I know how you arrived at the 7 mil but the program would grind the 7 mil down to about 4.5 mill because of the cost share tiers. Then the compensation from crop insurance would probably reduce it further by 2.0 mil because of the unseeded acre benefit.
c) Yes there is a structure change if you voluntarily summerfallow. This will be supported by your unseeded acre benefit claim from crop insurance.

If you are not in crop insurance, it would be in your best interest to report the acres as "unseedable" on the 2010 application.

The answers to all of these questions you are asking should have been explained to you by your accountant if he helps you will the forms.

Guys, I cannot not express how important it will be to have your 2009 and 2010 applications prepared properly (and even more critical in 2007 & 2008). Go find someone that knows what they are doing if keep driving until you find the right one.

[parsley]

And as far as the $140 minimum reference margin, well you would have to meet with my guy at MNP to have that one explained to you.

From that list of customers sorted by RM that has ranges of reference margin per acre numbers from $50-$210, which farms do you think will weather the storm better...

[BreadWinner]

The lower reference margins will weather the storms better I hope because ours is in the low side.

[freewheat]

I'm still at a loss over why one needs a 140 buck margin to coast through a year of virtually no inputs which are allowable. I don't think MNP is necessarily speaking of guys who have no seed in the ground, I presume. I know I certainly don't need 140 buck ofmargin after paying my allowable inputs to get me through the next year, in a year of few costs. If a guy has spent money on a crop sure why not 140 bucks.

[freewheat]

Freewheat, a couple things:

a) Take a look at the right hand side of your statement A (non-allowable expenses). Yes, even if you don't plant a crop, you may have less repairs, contract work, etc etc but many of the categories will remain similar. You will still have some kind of depreciation factor as all the equipment is a year older. The one potentially large item is the draw for personal living. Depending on the size of the farm this could be $50 on its own. Just because a farm doesn't seed any acres, you will still have mouths to feed. If there is off farm employment that offsets this draw it is an advantage but then a different calculation. From my own farm which has minimal debt, majority owned land, it is tough to keep this section below $100.

b)Understanding the cost sharing tiers of the program and actual payments would be the other difference. Although $140 is being tossed around by the time you grind this to the correct cost share you are below a $100. This $100 is to cover all the cash costs and non cash costs (depreciation) that are not covered by agristability.

As it was explained to me, and its a good thing if your overhead costs are lower than the average or as expained above, this level is where the program adequately covers a farm's costs and will allow it to stay in the black with the tough year we are facing.

The higher the reference margin, the easier it allows a farm to maintain a profit. A lower margin only potentially means a producer may have to absorb a larger portion of the loss. It doesn't mean that a farm won't be around next year.