Cash advance money three weeks behind

Money from the Advance Payments Program has been slow to make its way into farmers’ hands this spring.

Delays in getting everything in place since increased limits were announced have caused a three-week backlog in processing applications.

Dave Gallant, director of operations at the Canadian Canola Growers Association, one of the federal government’s agents for the program, said its normal service standard is three to five days.

“We’re about three weeks behind,” he said July 8.

However, he expects staff will have caught up within two or three weeks.

He said the situation has stressed everyone.

“Our staff are stressed. You can tell farmers are stressed when they phone us,” he said. “They need the money, they want the money and we’re doing our best to get the money out as quickly as possible.”

The announcement of the first changes to the Advance Payment Program since 2006 came May 1 and caught many off guard, he said.

It bumped the maximum advance to $1 million, up from $400,000, and allowed canola producers to get up to $500,000 interest-free. Other commodities remain at $100,000 interest-free.

It took until May 29 for the federal government to pass the regulations to increase the payments and provide extra assistance to canola producers.

Gallant said there was little information they could pass on to farmers at that point.

The CCGA could finally take applications June 7, but couldn’t actually issue the advances until June 26 as the federal government worked to change forms and computer systems and define the extra requirements of those applying for more money.

“It’s quite a bit more of a strenuous process to approve these,” Gallant said. “We’ve also had to fix over 1,500 accounts to take into account the rules that were announced on May 1, which were effective May 29, which we couldn’t put into place until June 26.”

The process can be complex.

For example, a farmer who had obtained the then-maximum $400,000 advance on April 1 would get $100,000 interest-free and the remainder with interest.

Effective May 29, if that entire advance was based on canola it would all be interest-free, so that account had to be changed.

“However, because Agriculture Canada’s system wouldn’t allow us to send them that information that way we had to keep the account as $100,000 and $300,000 until June 26 and then go back and fix it to May 29,” Gallant said.

“There’s a lot of complexity that was imposed upon us because the change happened mid-year that we have been challenged with in addition to the extra calls and the extra paperwork to deal with the larger advances.”

A statement from Agriculture Minister Marie-Claude Bibeau said the changes were designed to improve cash flow.

“Government officials and the 36 different program administrators worked hard together to ensure the new limits would be available as soon as possible,” she said.

She noted that applications could be made by June 10 and advances larger than $400,000 were available by June 26.

“It is our understanding that APP administrators have been working overtime and that the applications should all be processed shortly,” Bibeau said.

The CCGA has about 30 people working on the advance applications who are working overtime to catch up.

They have to carry out more credit checks and vetting of farmers’ ability to pay the debt, considering farmers can now get up to $1 million.

Gallant estimated about 200 farmers were still caught in the backlog. He said there have been some angry phone calls but most have understood the situation.

Gallant said nearly 6,000 advances have been requested and there are new applicants due to the higher limit. He suggested with the dry conditions some may be holding off to see what they produce before applying.

The good news is by fall all the processes will be in place and familiar to everyone.

“The next two, three weeks we’ll be through the backlog and it will be business as usual,” he said.

About the author


Stories from our other publications