4,500 angry farmers
Farmers owe about $30 million on overpayments, processing errors as far back as 11 years but Agricorp didnít bother to tell them... until now
By Patrick Meagher
OXFORD COUNTY ó Thousands of Ontario farmers were jolted by an unpleasant letter last month informing them they owe the province a whack of cash.
While some farmers are scratching their heads, saying they never applied for a loan, itís no loan. The money owed is from an overpayment made from support programs, corrections to program forms wrongly completed, or processing errors. In total, about 4,500 farmers owe about $30 million ó on average about $6,000 each ó and the provinceís administrator of risk management programs, Agricorp, wants the money paid back over the next three years. In some cases, farmers owe as much as $100,000. Agricorp has gone back at least 11 years in search of money owed.
Crop farmers Randy and Debbie Huber, in Oxford County, only owe $354.72 but say the debt is so old they canít verify it.
"I donít know if it was for wheat, corn or beans," said Debbie Huber. "It was 11 years ago. We were so angry we called our accountant. Theyíre dealing with a number (of similar cases). We called Agricorp and were told that a debt to the crown had no limitation and that if you didnít pay it would be sent to collections.
"Something from 2001 is very hard to verify. Legally, weíre required to keep seven years of tax returns. We have nothing to substanitate this and they (Agricorp) provided nothing to substantiate it either."
Some farmers are crying foul because they say they received money from the AgriStability program and thought it was a support payment during the crisis of cash that followed the closing of international borders to Canadian cattle when BSE was detected in an Alberta cow in May 2003.
"I feel like I have been blind-sided," said Renfrew County beef and crop farmer Peter Tippens. He owes $18,000 for money received in 2007, which he used to erect a Cover-All structure. He said he and his accountant simply filled out the required AgriStability forms, as they do each year, and sent them in.
"I never applied for a loan," Tippens said, thinking he received a support payment because of the BSE crisis.
He and other farmers also say they never received annual statements saying they owed money to the province. Tippens said he knows of one farmer who was told he now owes more than $100,000. Few want to talk about it. "A lot of farmers are embarrassed about it," Tippens said.
"Iíll pay the damned thing back but how could this go on for so long?" asked an exasperated Tippens. "Did someone not notice that 4,500 people (owed money)? Some heads should roll."
When Montague Township councilor, Vince Carroll, in Lanark County, discovered he owes $2,478, he asked, "Who has the right to reclaim monies paid out eight years ago as a grant? This is bullshit."
So far, farmers have received the money interest free but will start having to pay interest of about three per cent as of Jan. 1 for any unpaid portion, said Agricorp, which is already bracing for a fight. Agricorp has notified farmers that they need to submit a repayment plan or a provincial collection agency will pursue them.
The Ontario Federation of Agricultureís (OFA) manager of the farm policy research group, Jason Bent, said farmers who were unaware of the outstanding balance should contact Agricorp to get a copy of the previous letter that explained the overpayment or correction.
Ottawa lawyer Donald Good has looked into the matter (see page 5) and argues that "negligence" is no defence for the government and some farmers might not have to pay back the money.
Some farmers have discussed how to keep the money. Their issue is that it took the province an awful long time to notify anyone about it. The problem stems from the fact that Agricorp, until recently, did not have "adequate procedures for collecting overpayments" and did not have a "formal collection policy," concluded a 2008 special report to the auditor general titled "Agricorp Ė Farm Support Programs."
The report noted that in 2008 Agricorp had recorded a whopping $24 million in overpayments with no plan to get the money back other than, in some cases, to deduct the amount from a future cheque. The report stated that OMAFRA "instructed Agricorp not to recover any overpayments from the Ontario Cattle, Hogs and Horticulture Payment Program (OCHHPP). One producer received an OCHHP program payment of $740,000 yet had been overpaid $127,000."
As of 2008, there were 600 inactive producers, some having retired, who owed $1.4 million and Agricorp had no plan to go after the money.
Progressive-Conservative Agriculture critic Ernie Hardeman said he received many calls on this issue but declined to offer a recommendation on how to mop it up. He did say that "someone should be accountable as to how they messed this thing up."
He added that it was unfair for farmers now retired to be told they owe money for an overpayment eight years ago. "Itís sad that the province let this thing get this far."
Agricorp just seemed to have forgotten about money owed, Hardeman said. "The auditor general in 2008 pointed out that this was no way to run a train and they were told they should be looking more at following up on what they were doing. If these were overpayments they should be doing something about collecting (the money) back but up to this point they had done absolutely nothing."
OFA vice-president Debra Pretty-Straathof said that the surprise invoice from Agricorp has caused "real hardship" for some people.