Canadian farmers seeking pre-production cash advances under the federal Advance Payments Program ahead of this year’s spring seeding will be able to get the entire eligible amount up front.
Federal Agriculture Minister Marie-Claude Bibeau on Wednesday announced a “temporary waiving” of the program’s usual requirement that pre-production cash advances be issued in instalments of 60 per cent up front and 40 per cent after seeding is confirmed.
The temporary waiver, providing for an immediate 100 per cent advance on application, is expected to increase cash flow for producers this spring to help manage current high input costs, Agriculture and Agri-Food Canada said in a release.
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The department cited “exceptional circumstances” this spring, such as feed shortages due to drought, along with “disrupted supply chains and increased input costs” such as for fuel and fertilizer, due to the war in Ukraine and delays stemming from the global COVID-19 pandemic.
The Advance Payments Program provides cash advances of up to $1 million based on up to 50 per cent of the anticipated market value of a farm’s eligible production, whether it’s still to be produced or is already stored.
The first $100,000 advanced in a given crop year is interest-free; producers get up to 18 months (24 for cattle and bison) to fully repay a given year’s advance.
The temporary waiver to the up-front limit “comes in time for the planting season and will help farmers purchase the inputs needed for sustainable food production,” Bibeau said in Wednesday’s release.
The Alberta Wheat Commission, which administers the FarmCash advance program for growers in the four western provinces, noted Wednesday the new waiver follows an increase announced last week in the Advance Payments Program’s individual commodity rates.
For example, FarmCash chief operating officer Syeda Khurram said last Friday, a canola producer in Saskatchewan was previously eligible for a total advance of $504,400 on 2,000 tonnes of canola, but the same producer in 2022 qualifies for an advance of up to $727,500 on the same commodity.
FarmCash program administrators said Wednesday that in situations where a producer has already applied for an advance for this spring via FarmCash and received partial funds, the balance of those advances will be issued “within 24 hours.”
“The change announced today is welcomed by producers struggling with their cash flow this season,” Alberta Wheat Commission chair Greg Sears said in that group’s release Wednesday. “In these unprecedented times, changes to business risk management programs are necessary to help producers and industry weather the challenges.”
“Producers are facing some big increases in input costs as well as rising interest rates, and this change will help us to manage our costs,” Ian Boxall, president of the Agricultural Producers Association of Saskatchewan, said Wednesday in a separate release. “This will be especially helpful to young producers and operations that are facing cash flow issues after last year’s severe drought.”
The Advance Payments Program, which is delivered through 30 various ag industry associations, last year provided 17,340 farmers with a total of $2.39 billion in advances.
AAFC on Wednesday also noted that federal ag and agrifood lending agency Farm Credit Canada in December began offering credit limit increases of 30 per cent for crop input financing, for farmers who meet pre-approval criteria. — Glacier FarmMedia Network
