1982 last time to join the incentive scheme

Press, 27 February 1981, Page 15

1982 last time to join the incentive scheme

The livestock incentive scheme is due to be phased out in 1982. The closing date for applications to participate in it is March 31 of that year. As a livestock incentive scheme programme can be for a maximum period of ihree years, projected stock increases up to .lune 30. 1985. will qualify for incentive payments. lip to .June 24 last year 9923 farmers had taken part in the scheme, obtaining loans of 591.5 M from the Rural Bank. This has led to proposals put to the bank that will, when completed, add an additional 7.13 million stock units to stock numbers with an export earning potential of around S3OOM a vear.

Farmers, after submitting an approved stock increase development plan to the bank, are entitled to an in-terest-free loan of $l2 tor each stock unit over and above a certain minimum increase. Once the target has been achieved and sustained for two years, the loan is converted to a tax-free grant There is also the option of a $24 deduction from assessable income for each qualifying stock unit. At

present the qualifying minimum increase is 50 stock units. The farm must, have a minimum carrying capacity at the end of the programme and be able to sustain this for another two years: for dairy farms it is 65 cows and replacements (500 stock units) and for all other farms. 1000 stock units which can be made up from an equivalent mixture of livestock and cash crops. A basic principle of the scheme is that the farmer must, own the livestock at the time of making application, throughout the programme and the two-year sustaining period. If a farmer sells or transfers ownership of livestock, then either the loan will become repayable or a lax deduction certificate will not be issued. If a farmer decides to sell his stock to a sharemilker he should discuss this with the bank as he will not qualify to retain the incentive. Where a livestock incentive loan has been approved in the joint names of a 50/50 sharemilker and landowner, the sharemilker must retain ownership of the stock and remain milking on that prop-

erty during the programme period and the t wo sustaining vears to retain the incentive.

It has been suggested that by skilful manipulation <»f stock numbers it might be possible for a farmer to gain some unfair advantage from the scheme. However, as the bank monitors every farmer's participation in the scheme from a series of returns, statements and declarations from the time of receipt of the application through to the end of the sustaining period, the likelihood of any such manipulation going undetected for the entire duration of a programme and resulting in unwarranted benefits being granted is remote, says the Rural Bank.

For example, it, is a requirement oi the scheme that a statutory declaration concerning the stock carried be completed with the application and that during both the livestock increase programme and the sustaining periods, farmers have to supply to the bank each year a return of livestock owned and on their property at June 30.

All farmers have to supply annual accounts to the bank

whenever called upon to do so. Before consideration is given to writing off a loan or issuing an assessable income deduction certificate, annual accounts are required for the last programme year and the two sustaining years and. at the completion of the final sustaining period, it is a requirement of the scheme that the farmer completes a Statutory Declaration of Compliance that the approved livestock increase has been achieved and sustained for two vears.

From these various sources of information the bank critically examines each case during the course ot the programme and prior to the conversion of the loan to a grant. Any errors or discrepancy that come to light and cannot be satisfactorily explained will result, in the cancellation of the incentive and repayment of the loan.

However, despite the fact that there, may be an undetected manipulation in a scheme of this nature, the over-all benefits which will accrue to the counlrv are undoubted and the int’egritv of almost 10.000 farmer participants is unquestioned.