CAIS farmers

[frustrated1]

Am I the only one out there NOT farming for the programs? I've talked to 2 people now who've already got the new CAIS program "figured out". In the past I know one or both have made quit claims, collected GRIP, and had major FIDP cheques so they have experience. Apparently an acre is an acre in the eyes of the bueraucracy. So you take your reference margin, triple your acres and your reference margin triples. The catch is if you've been farming good land and have a good margin, then rent three times your acres in sand, your reference margin still triples. But, you pay a fraction of the rent with few inputs. BINGO! Surprise, a wreck, we didn't gross nearly as much this year! Another govt cheque. The amount of funds collected in the past just staggers me and now they're at it again. Everything is still in the paramaters of the program. Personally I find it morally bankrupt and have told them so but I sure am having a time making my payments by being honest, while thier dirt is paid for. Is this the way of the future, see how to milk the govt programs the best? If it is, methinks a new future may be in order.

[Yusishen]

Even if they triple the acres, they still need to keep the inputs up because if they use almost no inputs, then the margin (sales - inputs) is still good. Okay, if the land is garbage and yields 0, it might work but you'd need to be careful. If your sales and inputs go down by the same amount, your margin doesn't change and bingo, no payout.

I agree though, it seems a lousy way to farm and definitely not morally defensible. Glad there isn't any sand around here for rent so I don't have to watch my neighbours do it

[frustrated1]

You are correct about the inputs, however I expect a paper trail would show the inputs bought and paid for. Applied? or stored for a year or two down the line when you've ****d the program for .5 million plus and they quit renting the sand. Then, surprise they've got a couple stellar years to build them up for the next take. They've told me to never buy anything in a good year but if it looks like you're going to have a bad one: extra phos, everything repaired(FIDP), etc, etc. because someone else is footing the bill. Money wise, I'm an idiot for being honest but I can't bring myself to farm like this.

[Yusishen]

Yea, I guess you could buy the inputs and store them (chemicals at least). Personally, we never have enough storage to pre-buy and store fertilizer or fuel but I guess some guys do. Repairs won't help as I don't think they are eligible expenses in CAIS.

It doesn't seem to matter what you do, there are always people who will do their best to work the program.

[lakenheath]

Pre-purchasing fertilizer in the fall will not work with this program. The accrual adjustments eliminate it.

[frustrated1]

If you're in it to screw the program you'd have bought it in the spring and simply not applied it. If the guy is out to **** the program i'm certain they can "forget" about a little inventory.

[WoolyBear]

Most smart managers when they see a cash flow problem down the road, for which ever reason will scale back their input costs. They will even do it if there is a drought....... why put on the regular amounts of fertilizer if the rain doesn't arrive? As I see it, if you see your CASH IN begin to drop, and you want to collect on your CAIS, then you keep pouring out the input costs. Therefore, the only ones that are really benefitting are the chemical and fertilizer companies.........Your will still have the bills to pay after all won't we?

[frustrated1]

For a long time it never made complete sense to me either. Still doesn't. Then open the box wide and try to block out any conscience. These boys sit with thier accountant and figure how a program can work for them. Since they are straight grain farming they can ride the wild tides of fluctuation and in fact make sure those tides are enhanced. The cow guy for the most part only has one calf per cow to take to town, not nearly so wild of fluctuation. But a grain guy could have 5 bu per acre or 100. When you have a good year, make sure you have a fantastic one, don't have any extra costs, make your farm income real good, there's other ways to avoid the tax for awhile. Your referance margins are high. But when you have a wreck, have a big wreck. In FIDP, all their machinery was completely gone through by the dealer with no expenses held back. Why would you, the taxpayers footing the bill. If it looked a little dry, extra P, maybe N was added in the spring for next year. All eligible expenses, paid by FIDP. Then you've got a good year again, say 2003 which is enhanced by the 20,000 bu of "seed" that crop ins let you have from the drought in 02. Even though crop ins paid 100% in 02, they've got 20,000 bus plus that's sold as 03 crop, another good year for the reference margin. Not to mention the free cash. Now farm the sand with your good margins. Even at low inputs or hiding them, rent is not an eligible factor in CAIS. sand rents a lot cheaper than #1 soil and probably puts $35 per acre in your pocket or more on it's own. Then you've got the lack of production even if you did apply all your inputs. Because your margin was built on good land(an acre is still an acre) there's quite a shortfall. I'm guessing it'll work very well one year for them, a little for two years and by the third will be back to farming only the good land and work on building thier margin again. With the help of several hundred thousand from the CAIS. I could never farm like that and I always thought the programs would catch them eventually. But about the time the program should be catching up, they change the programs. These guys started collecting in one way or another since their first quit claim. About the time GRIP should have caught up to them, we had FIDP. They loved that program, especially when they got all thier machinery repaired by the dealer with FIDP monies.

Maybe I'm not completly correct in all my assumptions about CAIS but I will guarantee someone out there will make a pile of money by milking it. Moral bankruptcy and it makes me mad!

[ALLFARMER]

A couple year back when we were getting the per acre payments a farmer 8 miles away from me claimed my land as rented land. When I was fixing this the gov offical to me he likely just made a mistake on the land description. Right, a middle aged farmer with a million dollar operation is to dumb to get his land locations right sure!