August 27, 2012 / 9:18 PM / in 5 years

Canada gives tax relief to livestock farmers hurt by drought

WINNIPEG, Manitoba (Reuters) - The Canadian government said it will allow some livestock producers to defer income tax on the sale of breeding animals for one year, as the eastern provinces of Ontario and Quebec cope with drought.

Hot, dry weather this summer drastically reduced feed supplies for some Canadian farmers, forcing them to liquidate herds.

The tax deferral allows farmers to redirect money toward replenishing next year’s breeding stock, Agriculture Minister Gerry Ritz said on Monday.

Farmers in drought-stricken areas will be allowed to defer taxes on 30 percent of income from net sales, if they have reduced their breeding herds by at least 15 percent.

Farmers whose herds have been reduced by more than 30 percent can defer 90 percent of income from net sales.

Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by David Gregorio

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