Ont. to add interest, set deadlines on ag program debts

Ontario’s farm program delivery agency plans to require all outstanding account balances owed by farmers to be paid back within three years — and, starting next year, paid with interest.

Agricorp said Monday it will notifty all farmers with outstanding balances on the books that interest will be applied to any outstanding accounts, starting Jan. 1, 2013 — and that all outstanding balances must now be repaid within three years.

While Crown agencies usually add interest on debts owed, the province has previously granted a waiver of interest to farmers who owe money to Agricorp.

The latest waiver, granted last month "in the context of the provincial budget," expires Dec. 31 this year, Agricorp said.

The federal government also waived interest for 2012 on such programs but will resume adding interest in 2013 on amounts owed, Agricorp said.

Any current Agricorp customer with a balance owing will now have to set up a repayment plan within 45 days of the date on his or her statement of account, the agency said on its website.

Farmers can opt to either repay the debt in full at any time; repay it in instalments; or allow it to be repaid from future program payments, as long as those payments are enough to "eliminate" the full balance, with interest, within three years.

Any farmer who no longer takes part in any business risk management programs run by Agricorp, but owes money to the agency, will now have to repay at least a third of that debt each year, starting within one year of his or her statement of account.

"The three-year timeframe being provided to producers to repay their outstanding balance will help ensure time for proper tax planning and cash flow considerations," Agricorp said on its site.

An example of an outstanding balance would include any overpayment to a farmer that resulted from a processing error by Agricorp, the agency said. "Any overpayment that results in a debt owing to the Crown is collectible, regardless of when or how the debt was incurred."

Previously, such overpayments — incurred for reasons such as incomplete program applications, processing errors, changes to farm operations and "the nature of programs that provide advance payments" — were recovered only through future program benefits.

Now, however, "if you currently have an outstanding balance, you will receive a consolidated statement of these overpayments, to ensure you understand what is owed, as well as when and how the debts were incurred."

Failure to set up a repayment plan with Agricorp "may result in your account being subject to the same collection processes as any individual with monies owing the Crown," the agency said.

Furthermore, Agricorp said, while the agency can negotiate the terms of repayment within the three-year timeframe, it "cannot negotiate the amount of the debt."

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