WHITEHORSE — Farmer-led organizations could lose their ability to run the Advance Payments Program, the largest administrator warned recently.
About 30 organizations handle the program on behalf of the federal government.
Dave Carey, vice-president of government and industry relations at the Canadian Canola Growers Association, said Ottawa is considering handing national administration to Farm Credit Canada.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
A report tabled in Parliament last year examined the APP as part of a required five-year review of the Agricultural Marketing Programs Act (AMPA).
“Further analysis should focus on the capacity of the organization to deliver the APP and the potential impacts on producers, lenders and other program administrators,” it said.
Budget 2024 also said the government would continue to review the program “to improve program delivery and reduce the administrative burden for producers.”
Carey told the Canadian Federation of Agriculture summer meeting that other report recommendations to streamline certain processes are good ideas. These include changes to proof of sale, credit worthiness and credit checks.
“One of the things that we have significant concern over is the department’s strong recommendation that Farm Credit Canada enter the APP space as the national administrator. We’ve got concerns about farmers, farmer lenders, competing with a crown corporation, and that is a concern of our farmer board,” Carey said.
FCC would not comment, saying it would be up to Agriculture Canada to make the decision. In an emailed statement, the department pointed to the 2023 report committing to further exploration of alternative delivery methods and this year’s budget statement.
The AMPA report said although the third-party delivery model is low-cost, it is also inconsistent.
“Large administrators generated significant revenue from the program, and these benefits were not always passed on to producers,” the report said, quoting a 2019 report from Agriculture Canada’s Office of Audit and Evaluation.
That report estimated the spread on interest-bearing portions of advances earned $30.6 million for selected administrators from 2014-19 and recommended checking if comparable interest rates across administrators could be achieved.
Carey said he believes the APP has been so successful because farmers deliver it. The canola growers association lent $2.87 billion in 2023 to 10,294 applicants in Western Canada. That accounts for 63 per cent of total lending under the program.
Typically there is no application fee, but this year the association implemented a $250 charge. He said the interest-free portion of the APP impacts administrators’ costs.
He also said the government told all administrators at a meeting several weeks ago it was looking at legislative changes to the program for 2025 or 2026.
“We do have some concerns that if it’s for the 2025 program year, that there will not be consultations, as they would be, I would suggest, targeting changes through the fall economic statement, which is really omnibus legislation,” Carey said.
He added he didn’t know if FCC was actually interested in being the national administrator.
