# Section 8 of T1273 - Crop inventory valuation and productive capacity

#### Entering this Amount

## Crop inventory valuation

1. Find your code in the Inventory Codes List and enter it in column a.
   Note: To view this list, you must have a PDF reader (such as Adobe Reader) installed.
2. In columns b through d, enter the information as outlined in How to complete the columns (below). You can only enter amounts up to two decimal places. However, if you print Form T1273, inventory amounts will appear to three decimal places.
3. If you have more than 15 inventory items to enter, you must open a second Form T1273 and enter them there.
4. If you have more than 15 inventory items to enter, you must create a second farming business and enter the additional items in the second business's livestock or crop inventory screens.

#### The Canada Revenue Agency says...

You must complete this part of Form T1273 (Statement A) if you meet any of the following criteria:

- you produced crops or forage (with the expectation of harvest) during the program year;
- you had unseedable acres in the program year; or
- you carried over crops or forage in your inventories from your previous fiscal year.

This part of the form is used to measure your crop and forage inventory change from the ending amount you reported in 2007 to the ending amount in the 2008 program year. This part of the form is also used to establish that your farm has completed a production cycle. Refer to your crop production records, sales and feeding records, crop insurance measurements, and inventory records to help you complete this section.

Provide the contract or identification numbers for any production (crop) insurance relating to the crops listed on this section.

Ticking the "Yes" box for a decrease in productive capacity will identify that you feel this operation has undergone a downward structural change specifically because of disaster circumstances during the program year. A decrease in productive capacity means a decrease in the overall amount that you can produce.

For example, producers who were unable to seed or harvest some or all of their land due to excessively wet or dry conditions, should tick Yes to a decrease being due to disaster circumstances.

Note: If you filed to the CRA on the accrual basis for all years, you do not need to complete column g.

Crops or forage carried over from 2007 but no longer seeded or produced in 2008

## Crops or forage carried over from 2007 but no longer seeded or produced in 2008

If you had an ending inventory amount in 2007 for a commodity you stopped producing in 2008, complete columns a to c of Section 8 - Crop inventory valuation and productive capacity, and enter "0" in the "Acres" and "Quantity produced" columns. Indicate the amount (if any) of ending inventory in column f.

Landlords/tenants

## Landlords/tenants

If you are a tenant involved in a crop share, list only your share of the acres and quantities. Landlords are not eligible unless their share of the allowable income is in accordance with their share of the allowable expenses. This is considered a joint venture.

Canadian Wheat Board (CWB) commodities

## Canadian Wheat Board (CWB) commodities

Commodities marketed through the Canadian Wheat Board (CWB) are valued using the Early Payment Option (EPO) at 100% (EPO 100). The EPO is the highest estimated value that a producer can receive at year end. EPO values are based on the CWB Pool Return Outlook and are adjusted for a discount factor.

On CWB commodities, a receivables adjustment is necessary to calculate the difference between the initial price and the EPO for each CWB commodity on a per-unit basis.

The adjustment will be calculated automatically by the administration based on the information included in your application. Alternatively, you can opt to complete a CWB Receivables Adjustment Worksheet, which will provide additional information upon which to calculate the adjustment. Once the worksheet has been used to calculate your CWB Receivables Adjustment, you must submit the worksheet annually. Therefore, if you used the worksheet in 2007, you must complete and submit a 2008 CWB Receivables Adjustment worksheet.

Perishable horticulture crops

## Perishable horticulture crops

For a commodity that is considered a perishable horticulture crop for program purposes (i.e. a horticulture crop that spoils or decays easily and cannot be stored for periods longer than 10 months, such as potatoes, apples, carrots, etc), adjustments are made on an accounts receivable basis, and not on an inventory valuation basis. A Perishable Commodities worksheet is also available for producers of these commodities.

Do not record ending inventories for perishable crops. Report the "Quantity produced" from your 2008 fiscal period production. Do not report any production from the previous fiscal year.

See Section 11 - Deferred Income and Receivables of Form T1273 (Statement A) to report any income from sales of 2008 crops that are received in 2009.

Unseedable acres

## Unseedable acres

Be sure to report all acres that you would normally have seeded in the program year, but could not due to your land being too wet or too dry, beside "Unseedable Acres" near the bottom of the "Crop inventory valuation and productive capacity". Report all summerfallow and pasture/wasteland acres on the designated lines.

Unharvestable acres

## Unharvestable acres

If you grew a commodity and expected to harvest it in the program year but could not harvest it, due to reasons beyond your control, report the commodity and corresponding acres, and report your production as zero. Snowed under crops are not included in this section, see "Snowed Under Crops", below.

Snowed-under crops

## Snowed-under crops

If, at the end of your 2008 program year, you were unable to harvest some or all of the 2008 crop due to snow, report the snowed under crop acres as production. Report the number of acres under the inventory code for that crop and report any estimated production that you may be able to harvest in the next year (if the crop was not salvageable, report a quantity of zero).

Once the crop has been reported using the correct inventory code for that commodity, use code 6826, "Harvest Discount Allowance", to indicate the total acreage (regardless of the commodity) that was snowed under.

Example

Example
  You had a total of 350 acres seeded. 100 acres were seeded to canola while the other 250 acres were seeded to barley. You were able to harvest 80 of your canola acres and 200 of your barley acres before the remainder of your crops were snowed under. Therefore, on your crops inventory, you would report 100 acres for canola and 250 acres for barley, reporting the actual harvest amount you received from those acres. You would then report 70 acres as snowed under using code 6826, "Harvest Discount Allowance".

Standing/Unharvested crops

## Standing/Unharvested crops

If your fiscal year-end is such that your farm always has a standing crop (for example, July 31), do not include the standing crop in inventory.

If your fiscal year-end is such that a standing crop occurs in some years because harvesting may or may not have been completed by fiscal year-end (for example, September 30), include the standing crop in inventory. Fall and winter crops should also be reported in this manner.

Once the crop has been reported using the correct inventory code for that commodity, use code 6826, "Harvest Discount Allowance", to indicate the total acreage (regardless of the commodity) that was still standing at your fiscal year-end.

Organic production

## Organic production

Identify your crop as "organic" only for your crops that have been Certified Organic by the provincial or federal governing certification body

Multi-Stage Crops

## Multi-Stage Crops

Producers of multi-stage crops should report all acres of those crops even if no production was expected in the program year. Use the codes from the "Inventory Code List" that reflect the stage of production for the program year.

For producers in British Columbia, multi-stage crops are apples, cranberries, sweet cherries, echinacea and ginseng.

For producers in New Brunswick and Nova Scotia, multi-stage crops are blueberries (low bush), cranberries, echinacea and ginseng.

For producers in all other provinces, the multi-stage crops are echinacea and ginseng.

Planting densities for B.C. apples and cherries

## Planting densities for B.C. apples and cherries

British Columbia producers who are reporting apples or sweet cherries in Section 8 - Crop inventory valuation and productive capacity, will be contacted by provincial representatives to collect detailed information on the variety, age, and density of apples and sweet cherries.

Apples
  - Low density: less than 500 trees per acre
  - Medium density: between 500 and 999 trees per acre
  - High density: 1000 or more trees per acre
Sweet cherries
  - Low density: less than 500 trees per acre
  - High density: 500 or more trees per acre

Berry producers

## Berry producers

In some operations where early harvesting of berries is possible, a second planting of another commodity may occur. If there is expectation of harvest for both commodities in the same program year, then you would report the acreage and production on the crop inventory page, for each commodity.

Sod producers

## Sod producers

Report your total sod acres (not just acres harvested). Sod producers must complete a Sod Productive Capacity Worksheet, which will allow the Administration to more accurately measure structural changes in sod operations. If you do not automatically receive this worksheet, contact the Administration.

How to complete the columns

## How to complete the columns

Column a
  Use the Inventory Code List to identify each crop grade and variety. Leave the code blank if the commodity is not listed in the Inventory Code List.
Column b
  List all commodities that you produced, or had on hand at the end of your 2008 fiscal period. Record each grade or variety of crop separately [for example, record #1 Wheat (15%) separately from #1 Wheat (12.5%)].
Column c
  Enter the code for the unit of measurement used to measure the commodity you are reporting. Commodities must be reported using units of measurement (for example, tonnes), not dollars. Use the same unit of measurement for all entries in a single row. Click here for the Units of Measurement Code List.
Column d

  Indicate the number of acres used to produce each crop. List only those acres for crops that produced, or should have produced, a crop during the program year. For commodities not measured in acres, use the unit of measurement considered standard for that commodity.

  Greenhouse and nursery operations must report their unit of measurement in square metres, based on productive area.

  Maple syrup producers should report in hundreds of taps producing (for example, if you have 350 taps producing, you would report 3.5).

Column e
  Indicate the quantity of the crop that was produced in the program year.
Column f
  Indicate the quantity of crop you had at the end of your 2008 fiscal period.
Column g
  You will only need an end of year price (EYP) to value crops that are shaded for your province on the Inventory Code List. If the commodity you are reporting is marked with an "X" for your province on the Inventory Code List, leave the EYP column blank unless you meet the criteria for submitting your own price.