Why does CAIS not use gross margin like NISA or OFIDP?
NISA and OFIDP used a calculation of farm income known as gross margin. Over time it was found that some of the expenses that were considered eligible for the NISA or OFIDP gross margin actually reduced the amount of assistance producers could receive when they were experiencing financial problems on the farm. For example, eligible NISA or OFIDP expenses such as machinery repairs, building repairs or legal and accounting fees, although very real business expenses, are in fact discretionary in any one year. Therefore, in years when there are financial problems these expenses decrease because cash flow is tight and there is less need for expenses to minimize income taxes. In this case, the NISA or OFIDP gross margin falsely gave the impression that the producer was better off. In years when there are no financial problems, cash flow is high and there is a need for expenses to minimize income taxes, these expenses increase. In this case, the NISA or OFIDP gross margin falsely gave the imp
