Lacombe County producers may be eligible for the Federal Livestock Deferral Provision

When farmers in designated regions, known as prescribed regions, experience extreme weather conditions that necessitate the sale of their breeding herd, they can defer a portion of the proceeds from these sales to the following tax year.

To defer income, the breeding herd must have been reduced by at least 15%.

• Where the breeding herd has been reduced by at least 15%, but less than 30%, 30% of income from net sales can be deferred.
• Where the breeding herd has been reduced by 30% or more, 90% of income from net sales can be deferred.

This deferral helps to even out income fluctuations caused by the forced sales, providing farmers with a more stable financial situation.

 To qualify for the Livestock Deferral Provision, farmers must meet specific criteria:

1. Location: The farming operation must be located in a prescribed region. These regions are determined annually based on weather conditions and their impact on farming operations. For 2024, Lacombe County is one of the identified prescribed regions, meaning farmers in this area may be eligible for the program.
2. Sale of Breeding Herd: The sale must involve all or part of the breeding herd. This provision is specifically aimed at situations where farmers need to sell breeding livestock due to adverse weather conditions.
3. Adverse Weather Conditions: The sale must be due to drought, excess moisture, or flooding. These conditions must significantly impact the farming operations, making it necessary to reduce the herd.

The primary benefit of this provision is the ability to defer income to a subsequent year, helping farmers manage their tax burden more effectively. This deferral can be crucial in a year where income is unexpectedly high due to forced livestock sales, preventing a spike in taxable income and allowing for better financial planning and stability.

Farmers who believe they meet the criteria for the Livestock Deferral Provision should consult the official guidelines provided by Agriculture and Agri-Food Canada. Detailed information and the list of prescribed regions for 2024 can be found on their website:

• Livestock Tax Deferral Provision - Agriculture and Agri-Food Canada
• 2024 List of Prescribed Regions

By staying informed and prepared, farmers in prescribed regions like Lacombe County can take advantage of this provision, ensuring they have the necessary financial support during challenging times.