LIVE STOCK AND THE FARM

Southland Times, Issue 22293, 7 April 1934, Page 12

LIVE STOCK AND THE FARM

(Conducted by

W. S. Allan, B. Agr. Sc.)

Items of Interest with a view to publication in these columns will be accepted, and any inquiries accompanied by the name and address of the Inquirer, not necessarily for publication, will be answered through these columns. INCOME tax THE FARMER’S LIABILITY. THE CLAIMING OF EXEMPTIONS. SERIES 111. (By D. M. Malloch, A.R.A.N.Z.). Provision is made in the Land and Income Tax Act whereby a loss made in any year can be carried forward for the three years and set off against subsequent profits. The business of farming is never steady in its results year by year. This is due mainly to the facts that the fanner is at the mercy of the weather, the seasons, and of world wide competition in markets If a farmer comes within income tax law, he should not be satisfied with jotting down a few figures and estimates just to show that he has made a loss in a bad year, but he should carefully figure out the full loss claiming all depreciation allowances as well. Next year he may have a record season with a good yield and good prices. He is entitled to claim as a deduction the full loss for the bad year. Many sheep farmers this year will be able to claim a ‘set off” for the loss shown the last three years. There are qualifications as to carrying forward losses for income tax and as regards unemployment tax, a loss cannot be, carried forward under any consideration. The Income Tax Form. Part E of the form has to be filled in by the farmer. It is in substance, a profit and loss account divided into two parts, the top one showing the gross profit and the bottom one showing the overhead and working expenses which are deducted in arriving at the net profit. The sales of live stock, wool, grain, dairy produce etc. for the year, present no special difficulties. If the live stock and dead stock happen to be exactly the same at the end as they were at the beginning of the year, the gross income or profit would amount to the proceeds of live stock, wool etc. sold. The numbers and valuation of live stock affect the gross income however, as has been shown already. Similarly the quantity and valuation of wool, produce, etc. unsold affects the gross income and must be taken into account. The opening stock in the next year’s return must always correspond with the closing stock of the previous year’s return. An estimate must also be made of the value of meat, milk, produce etc., used by the farmer for domestic purposes. The deductions of farm working expenses detailed on the tax form are mostly straightforward.. They include rent, rates, fire and accident insurance, interest, seed bought, feeding stuff bought, wages, rations, repairs and renewals, maintenance, freight and cartage, manure, sacks etc., threshing and chaff-cutting, petty expenses. In the blank lines under other, expenses would come depreciation on implements and on motor car, buildings etc.; a portion of light, power and coal, any loss on discarded plant or implements and a proportion of motor car running expenses. It is possible there are other expenses dependent on the circumstances. Light Power and Coal. A taxpayer cannot claim as a business or farm expense, the cost of cooking, lighting and heating used by his family for domestic purposes. He can claim, however, the coal used by the mill and chaffcutter, and a reasonable proportion of the Power Board’s account, if the farm buildings are wired, or milking machines or other electric motors driven by electricity. When an implement or any other plant is discarded as useless, or is sold, the loss representing, the difference between the cost price and the scrap value or trade-in price can be claimed as a deduction. The cost of a new implement cannot be regarded as a renewal or as maintenance. It is said to be a capital payment in the nature of an investment. Any implement which the new one replaces can, however, be claimed as indicated above. Allowance must be made for depreciation if proper books have been kept. This provision would also apply where a farmer buys a new motor car, and a portion of the loss on the old car could probably be claimed. This applies both to income tax and unemployment tax. A taxpayer living in town on a salary cannot claim as a deduction from his income, the cost of running his private motor car, neither can be claim depreciation, nor the loss represented when the car is finally discarded or traded-in. . A stock firm however, will claim full running expenses, depreciation etc. on a stock agent’s car because it is used solely for business. A farmers car is used both for business and for domestic purposes. Depending on the circumstances, he can claim a half at least of the running cost and also of depreciation and any loss on a “tradeThe full depreciation on a business motor car allowed by the Commissioner of Taxes, if accounts are presented by double entry, is 10 per cent, of the original cost. Let us presume that the farmer claims at least half his running is on business and his car cost £5O. He could claim £25 depreciation, which will mean a saving of 25/- in Unemployment Tax without taking Income Tax into account. Some of the larger farmers have two cars—one which is used all the time on farm work—and the other perhaps half and half. Again others have a motor truck. If any car or truck is used solely for business, the full depreciation can be claimed. Domestic or Personal Expenses.

There is misconception in the minds of some farmers as to why there should be a distinction between farm expenses and domestic expenses. Domestic expenses, of course, are not allowed at a deduction, but farm expenses are. Let me take the case of two taxpayers—one a storekeeper and the other a farmer —both without income from an. outside source. The storekeeper lives in the suburbs and travels to and .from work every day. His wife manages all the domestic and household affairs, paying the rates, insurance and mortgage interest on the house, the family drapery bills, doctors’ and dentists’ fees and buys her provisions etc., from the store as any other customer would. The storekeeper pays his wife a monthly allowance of £2O to provide the wherewithal. At the end of the year,'he might complain that he has had a bad year, and that there has been no profit because his position is not a penny better off than it was at the beginning of the year. It may be quite true that his position is no better, but it is quite wrong to say his business has not shown a profit. His business has provided him with an income of £2O a month totalling £240 for the year, and this sum has been used to provide his wife and home with the necessaries of life. Let- us now take the case of a farm-

er whose bank account is much the same at the end of the year as it was at the beginning, and whose other assets and liabilities have not altered. The contention that because he is no better off his income has been “nil” is quite wrong. He has, like the storekeeper, provided his family with the necessaries of life for a year, and his income from the farm would in this case be equal to the domestic or living expenses. When a farmer has made a loss or when his income has been “nil” his position must be weaker at the end of the year to the extent of his living expenses at least. In other words, he has been drawing on capital. The following are items of a domestic or personal nature:—Accounts from the draper, chemist, bootmaker, doctor, dentist, hospital, school fees, music fees, church and other donations, payments to any member of the family and not stamped as wages, life insurance premiums, wages of a domestic servant, furniture, carpets, wireless etc., etc. Rations and stores can be claimed but only for farm workers, whose “keep” is stamped. It would be impossible to distinguish between the cost of “keep” of farm hands and the cost of “keep” of the family, when they are provided for together. A farmer can claim under the heading of rations in the income tax and unemployment tax form, the estimated “keep” of men working for him during the year at 15/- a week. A farmer cannot put down “keep” for members of his family working for him unless he stamps the “keep” at 15/- a week. Neither can he claim wages for them unless they are properly recorded with wages stamps affixed. Special Exemptions.

The net income is shown on Pai-t E, but income tax is not charged on the net income shown there. Certain special exemptions are allowed including:— (a) Life insurance premiums on the taxpayer’s own life. (b) Unemployment Tax paid. (c) £5O a year for children under 18 dependent on the taxpayer. (d) Contributions in support of a widowed mother with a limit of £5O. (e) Stamp duty and some others which do not concern the average

farmer. Particulars of all these special exemptions must be given on Part D of the income tax form. There are qualifications for some of these exemptions. In addition to the above, there is another special exemption of £2lO for a single man and £260 for a married man both of which diminish, however, as the income rises and disappear altogether- if the net income on Part E is over £725 in the former case, and £BOO in the latter case.

Let us suppose the net income of a married man with two young children is shown at £560 on Part E, and he has a life insurance premium of £3O, and unemployment tax paid last year amounts to £l2. The taxable income would be as follows:—

£ £ Net Income 560 Less allowance for children 100 Less allowance life insurance 30 Unemployment Tax 12 Portion of special exemption on income of £560 160 302

Taxable income of 258 In Part D there must also be shown details of depreciation claimed on buildings. For unemployment tax there are no special exemptions whatever, and the tax on 1/- in the pound is payable on the net income. This net income on the unemployment tax return would generally agree with the net income on Part E of the income return. The unemployment tax in the foregoing example would be 1/- in the pound on £560, which is £2B. General.

About the end of the year an assessment notice is sent out by the department. It shows what tax is payable and how it is arrived at, and it should be checked by the farmer. Early in the new year a demand is made with instructors to pay the amount due generally before March 1 each year. If the farmer forgets or does not bother to complete a tax return, a default assessment (often many times the amount of the income) will be sent, and a date given before which an objection may be lodged. This should have urgent attention and proper returns completed, it is a fact that in the past some farmers have been at a loss to know what to do with default assessments, and have paid the amount demanded which has been in excess of what the tax should have been. If tax has been overpaid a refund can be claimed if the request is made within three years of payment. A study of taxation shows that the Government has been leaning more and more on income in levying taxes. The following shows the farmer’s liability for taxes over the last six years. Year Income Tax Granduated Land Tax 1928 No Yes 1929 Yes, but only Yes and super where the un- land tax improved value of land owned was over £14,000 provided income tax was greater than land tax. 1930 Yes but only Yes, but not where unim- super land tax proved value was over £7500 as well as land tax. 1931 „ „ „ No, a flat rate of Id. 1932 Yes, but only „ „ where the unimproved value was over £3OOO as well as land tax. 1933 „ „ ~ » » Besides this, unemployment tax based on income has been levied on all farmers over the last three years, and the rate of income tax has been gradually increased and exemptions decreased. It is thought in many quarters that the tax on income now universal has come to stay in some form or other, and if this is the case, it is in the interests of all farmers to keep records to enable them to give accurate results, and at the same time claim all possible deductions and exemptions. Next week, unemployment tax will be dealt with and inquiries on income tax will be answered through these columns.

BREEDING EWES MANAGEMENT PROBLEM. WEANING TILL MATING. Breeding ewes are kept to produce lambs, to produce the largest possible number, to produce them at the proper time and with the maximum vigour or growth force. The feeding between weaning and mating has a considerable influence on the lambing percentage and since it acts through the underlying factors of fecundity and fertility it is necessary to explain first the true meaning of these two terms. A ewe that is bred to produce, say, two eggs at a mating period can achieve this only when the conditions of environment, i.e., feeding and management, are favourable. With unsuitable feeding or improper management, the number of eggs produced during oestrum may be reduced, but the maximum will be secured when proper feeding and management are practised. A born twin-bearing ewe cannot be made a triplet-producer, neither can a bom single-bearing ewe be made a twin-bearing one, by good feeding and management. These only serve to bring out the latent possibilities in an animal, because the hereditary makeup (in this case—fecundity) is a fixed entity. Fertility. Fertility, which indicates the ability of a mated pair to produce living healthy offspring may or may not be a measure of the fecundity of the individual. Thus a ewe that produces dead twin lambs is lacking in fertility, but fecund to the extent of producing two eggs (twins). Since fertility commences with the earliest development of the offspring and since unfavourable dietary conditions, lethal factors, disease, and accidents may operate throughout the gestation period of the ewe, it is easy to understand why the fertility of a flock, i.e., the lambing of live, healthy lambs, may be low, and yet the fecundity be high. The number of lambs born is decided at the time of conception, subsequent feeding and management having no effect in increasing the possible number. Both fecundity and fertility are influenced by inheritance, feeding, and management. For this reason a true indication of the fecundity of a flock can be obtained only when the feeding and management conditions before conception are favourable. Higher fecundity can be bred into a flock by using the offspring of high-producing ewes, and twin rams either or both. High fertility, which is based primarily on fecundity, necessitates rational feeding during the gestation period, freedom from disease, accidents, and other influences.

With a w.ell managed flock of ewes lambing should be spread over a period of from 16 to 20 days, and need not be so long as is now frequently the case. The cause of such prolonged lambing is usually to be found in the faulty feeding of the ewes prior to mating. When mated they fail to come into season or only become fertile when the body vigour is raised in response to the feed offered in the tupping paddock. Among young ewes there will usually be found a small percentage which wove barren in the first year, and records show that they are usually barren in the second year, and therefore should be culled at once. Ewes may be unproductive because of some genital defect, because they have been mated with an infertile ram, or because they are unfit. This unfitness of the ewe is often caused by under-de-velopment, a consequence of lack of proper feeding from birth, or by the fact that the ewe is either too fat or too thin. For example, two-tooth ewes that have been fattened for exhibition may fail to breed at their first or subsequent mating; on the other hand, many undeveloped two-tooth ewes, especially on high country, have to be held over and not mated till they are four-tooths. Feeding the Ewes. On the average Canterbury fat-lamb raising farm weaning takes place about the beginning of January, and on sheep stations about the beginning of February. The usual after-weaning practice is to concentrate on the feeding and management of the sale lambs and ewes, and to relegate the breeding ewes to a back paddock, often with little or no feed and water. Since the necessity exists for careful management from weaning onwards the ewes deserve better attention than this. When the lambs are removed, the ewes should be gone through and the culls disposed of. All the ewes to be kept should be examined individually for condition and should be separated out into good, medium, and bad, or whatever drafting suggests itself, depending on the feed available. Each lot of ewes should then be fed up to mating, so that the whole flock will be in a fit condition for the start of breeding. Fitness at this period may be likened to a racehorse which has to be tuned up to the correct pitch for running in races, that is, neither too fat nor too lean, healthy and ready in every way to undertake a vigorous race. In other words, the breeding ewes should be active, vigorous, and exhibiting intensely the natural desire for' reproduction. Special forage crops are not always necessary to bring about the desired condition. It is more commonly a question of rearranging existing feed supplies. On country where fat lambs are important, more attention could be given to feeding of breeding ewes during January and February, as in these months there is frequently a short food period in Canterbury. It has already been indicated that it

is possible to overfeed and get the ewes tob fat; but usually this can be avoided by proper feeding and exercise. This danger is more often experienced by stud breeders than the ordinary sheep man. An experience in one of the College stud flocks in 1929 showed that where ewes were over-fat in autumn, the number of dry ewes in the spring was three times the normal; winter losses were also greater. This happening we can now explain since the cause has been made clear by the College veterinary department, and has already been described in Bulletin No. 22. A more common happening is that the ewes are so neglected after weaning, owing to the shortage of feed which usually occurs in January and February, that they are not in condition to reproduce and may fail either to come into season or to conceive at all. Under these circumstances, those that do conceive do not give expression to their natural fecundity, and what is really more important, they produce lambs endowed with a poor vitality or growth force; these take longer to fatten and are often of lower quality.

Flushing.

This term flushing is used to describe the adequate feeding of the ewes just previous to mating and the practice has long been recognized by many sheep-owners. That it can have a material effect on the percentage of lambs born is shown by the following table, the contents of which have been extracted from Bulletin No. 996 of the United States Department of Agriculture:— Effect of Flushing. TABLE I.

It is not yet universally understood that the percentage of lambs to be bom in any flock has been determined at mating time and that nothing done after that period can increase the number of lambs. If a high percentage of lambs, or what is probably of more importance, a low percentage of dryewes, is desired, then it is imperative to study the pre-mating feeding. Flushing consists of feeding the sheep on stimulating foods and so managing the diet that their body system is invigorated. Flushing is usually best done by changes from dry to succulent feed or vice versa, or by changes on different types of pasture. Whatever food is used it must be properly balanced and contain sufficient protein or flesh-forming substance to bring about the desired condition of the ewes and produce the stimulating effect referred to above. Badly nourished ewes suddenly put on a succulent crop frequently return to the ram two or three times as the change has been too sudden. The development of functional eggs is a gradual process and can be retarded by bad feeding. If ewes are unfit a much longer flushing period is required. Keen observers have noted that the appearance of twins during the early part of lambing is indicative of ewes being fit at the commencement of mating. If, on the other hand, most of the twins appear towards the end of the lambing it shows that the flushing or feeding conditions prior to or during mating were only manifesting themselves towards the end of the mating season, and that the previous feeding had been insufficient. Purchased Ewes. A very common practice is to purchase aged ewes at the ewe fairs and take one or two crops of lambs from them. In any case, farmers purchase each year a number of ewes, and have to take them when offered and in. the condition offered. The time has arrived when the wisdom of the established practice should be called to question. The ewe fairs are now held at the time when most fat-lamb raisers are ready to mate the ewes. These are often driven or railed from the fair to the mating paddock. The statements already made indicate that this is about the best way to secure a poor lambing, delayed over a long period. Such lambs have an impaired growth force and can only be moderate lambs at any period under any form of feeding. If it were possible for the farmer to secure his ewes a month earlier, he would have time to feed them up and allow them to recover from the semistarvation necessitated by being held in saleyards and droving or railing. Feeding at Tupping Time. While flushing previous to mating is sound practice, it does not imply that when the rams are put out good feeding should cease. The provision of good feed for ewes while with the ram is necessary in order to maintain the vigour of both ewes and rams. If this is not done, ewes that take the ram late in the season will have their fecundity reduced by semi-starvation. Attention has lately been drawn by students of animal breeding to the fact that the effects of starvation at periods in an animal's life, and especially in the early stages, become cumulative as the animal grows older. Infertility, barrenness or abortion are some of the troubles which may occur and which may be traced to mal-nutrition at some previous period. Should any pronounced constitutional disturbance arise as the result of bad feeding, for example that evidenced by the slipping of lambs by young ewes, it may be better to fatten these ewes off than to risk further troubles. Time of Mating. A discussion of this question would provide sufficient matter for a separate bulletin, but it snould be pointed

out here that it deserves more thought. Lambs should only appear when there is sufficient food available to ensure that the in-lamb ewes get their full requirements and that there is no check in the supply. Each farmer should know when his spring feed will be ready, and by calculating back five months from that date he will have the proper time to put his rams out.

Summary.

1. Breeding ewes are kept for production, and careful thought should be given to every point in the management. 2. Fecundity is an inherited character influenced by feeding and management. 3. Fertility is largely dependent on feeding and management. 4. Delayed fertility is the direct result of bad management and may become cumulative in older ewes. 5. Over-fatness is a cause of infertility or delayed fertility. 6. Low condition is the most common cause of infertility and delayed fertility, and is a contributing factor to many troubles in older sheep. 7. Purchased ewes should be on the farm three to four weeks before tupping. , , , 8. Ewes should be flushed for mating. 9. Ewes should be well fed during mating. , ~ , 10. The time of mating should be calculated to secure lambing when there should be sufficient feed.

43 c » —> 3 . S3 c •- w.t3 CO s g How treated in. g> o a 33 2J3 o > o.S> < l.g 1916 lb. Unflushed 4.75 100 Flushed (grain) 1918— 17.13 140 Unflushed 3.03 120.0 Flushed (grain) 12.25 150.0 Flushed (pasture) 11.80 145.5 1921— Unflushed 1.53 122.2 Flushed (grain) Flushed (extra 3.37 147.4 pasture) 8.15 169.2