Call sparks visits to study effluent storage
The day had come – yes I received a letter from my dairy company explaining that they would not pick up my milk unless I had adequate effluent storage facilities in place by May 31, 2015.
Obviously 24 hours storage doesn’t make the grade anymore. Over the years I had heard from many farmers who had received the same letter and what they had to do to become compliant.
As a result I decided to turn this requirement into a project which could not only help me but also the clients of my firm.
Since June 1 I’ve visited farms in both the North and South islands. I’ve seen:
Effluent ponds ranging from 700,000 litres to more than 2 million
All types of storage tanks
Concrete bunkers both above the ground and below
Even research on effluent bladders Pond stirrers Numerous pumping systems and irrigators including travelling to K-Lines
Solids separators and weeping walls.
Along with effluent, in many instances some sort of pad is built. This may include: Stand off pad Feed pad with troughs Covered feed pad Herd homes Over three months I’ve become knowledgeable about the systems.
Being an accountant though, I wondered how I could save some tax, with having to spend all of this money. Briefly this is what we get as farmers:
Ponds, settling tanks or other similar improvements for the purpose of the treatment of waste products 5 per cent per annum.
Construction on the land of feeding platforms, feeding yards etc 10 per cent p.a.
Fencing 100 per cent as deductible expenditure
Travelling irrigators 20 per cent p.a.
Irrigation pumps 13 per cent p.a.
Irrigation piping 13 per cent p.a.
Rubber for wintering pad 30 per cent p.a.
The good news is that my bank manager has been quite helpful. They had just announced a ‘‘ Rural Environmental Compliance Loan’’. The interest rate for this type of loan is around 5 per cent, about 1 per cent lower than a 90 day BBR. This loan is up to $300,000 and is for a period of five years principal reducing. No establishment fees either.
In the end I’ve done so much homework I’ve totally confused myself. At the end of the day I realised that I am only an accountant trying to do a farmer’s job. The only way I could get a real answer to my problem was to employ a consultant specialising in this field. At least I know that’s tax deductible.
If you would like help identifying the depreciation rates please contact me.
Gavin Haddon, Director CooperAitken Accountants in Morrinsville, Matamata and