Farmers who have applied for a cash advance through the Advance Payments Program (APP) may be pleased with Monday’s announcement from the federal government.
Minister of Agriculture and Agri-Food Canada Lawrence MacAulay announced the interest-free portion of the APP is going up from $100-thousand to $250-thousand for 2024. The interest-free amount has fluctuated over the last few years from $100-thousand in 2021, up to $250-thousand in 2022, then $350-thousand in 2023.
“In the face of so many challenges, our hardworking producers continue to show their resilience and produce top-quality products for Canadians, and the world. Increasing the interest-free portion of the Advance Payments Program means improved cash flow and savings for farmers as we head into the 2024 planting season.” said MacAulay in Monday’s news release.
Numbers from the federal government show the change will save approximately 11,950 participating producers an additional $4,916 in interest costs on average, for a total savings of up to $58.7 million.
After Ottawa announced about a month ago the money would go back down to $100-thousand, as it was for years, many farm groups – including the Saskatchewan Cattlemen’s Association (SCA), Canadian Cattle Association (CCA), and Agricultural Producers Association of Saskatchewan (APAS) to name a few – voiced their disagreement, saying amid high interest rates and rising costs, it wasn’t enough.
“Even though we’d like to see it at the $350-thousand, we’re certainly pleased that it has increased to $250-thousand.” said Grant McLellan, CEO of the SCA on Monday.
“It’s an important tool for our young producers to be able to have the ability to secure financing through the APP,” said Nathan Phinney, President of the CCA on Tuesday. “Given where interest rates have risen over the past year to 18 months, it’s help for the young producers trying to get in or just getting into farming.”
Dave Gallant is the Vice-President of Finance and Advance Payment Program Operations at the Canadian Canola Growers Association, one of 27 organizations that administer the program. He says the announcement came early enough that they can make adjustments. “The program starts April 1st,” Gallant noted. “We will be making the necessary changes so that’ll we’ll be in a position to issue the full $250-thousand interest-free to farmers come April 1st.”
Some of those changes, Gallant says, include modifying agreements with banks so the CCGA can issue the new amount. He also says they were told the change was about a week or two in the making. Gallant says farmers who have applied already should see a fairly smooth transition.
“We’ve got about 25 to 27-hundred applications in already; we’re getting about 120 (applications) a day, so anything that’s ready to be issued on April 1, we will issue up to the $250-thousand interest-free.”
