Saskatchewan producers who borrowed government guaranteed money during the BSE crisis paid back most of the taxpayers’ money, according to information from the agriculture ministry.Assistance offered through the province’s livestock loan guarantee program between October 2003 and January 2004 resulted in 2,749 loans worth $35.5 million.”The producer went to the bank and the loans were 100 percent guaranteed by Agricultural Credit Corporation of Saskatchewan,” said Tom Schwartz, manager of financial programs for Saskatchewan Agriculture.If producers had trouble making their payments and couldn’t renegotiate acceptable terms, the banks could turn the loan over to ACS. The banks had to make their claims by the time a loan was 135 days in arrears.Schwartz said that happened in just 183 cases for a total of $3 million.”To date, $1.4 million has been repaid of that, including interest,” he said. “There are 82 loans remaining under repayment for about $1 million.”He characterized the program as successful.In Manitoba, BSE loans worked differently.Two year low interest loans of $50,000 were made available through Manitoba Agricultural Services Corporation beginning in the fall of 2003. The program included an option to extend or increase the loan by $25,000 at the end of the term.That increase was amortized over five or 10 years.According to the MASC, 1,815 producers borrowed $70.2 million in the first part of the program. Many of them also took advantage of the extension provision and/or increase.Then, in February 2008, the province announced a three-year principal deferment.There are 1,184 loans worth $32.9 million outstanding and 288 of those, worth $4.5 million, are in arrears.Charlene Kibbens, senior vice-president at MASC, confirmed the province has written off $1.1 million and that number could rise.”We treat people on a case by case basis,” she said. “We’re optimistic about positive things happening.”Cattle prices have picked up in recent weeks.Meanwhile, Saskatchewan offered another short-term assistance package for both cattle and hog producers in late 2007 and early 2008.ACS provided the cattle loans and the ministry provided hog loans to help producers with their cash flow in the face of high feed costs, the high Canadian dollar and low prices.On the cattle side, 2,414 producers borrowed $34 million and $3 million has already been repaid, including interest.”These are people choosing to either pay them out completely – maybe they sold their cow herd or they’ve made their regular payment – plus there’s the interest payments they had to make each year,” Schwartz said.There are 2,344 loans worth $32.1 million outstanding.Thirty-six hog producers borrowed $15.6 million, and $664,000 has been repaid. All of those loans are still outstanding.”Because of the times the producers were going through, we’ve extended the first payment date,” Schwartz said. “All they had to do was pay interest. They actually don’t have to make the first payment on those until 2011.”Since the principal payments are not yet due, he added that any repayment is a good step.He also said that because the interest rate is set at the government’s cost of borrowing, which is one-quarter of one percent, producers are able to keep up with their payments.”There’s few of those that won’t be paid,” he said of the cattle loans.The hog situation could be more difficult, although prices in that sector have picked up as well.
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