With changes now in effect, producers can apply for advances for up to 45 commodities on one form
The Canadian Canola Growers Association is pleased with changes to the federal Advance Payments Program but feels further steps need to be taken.
The federal government is getting rid of red tape, expanding the commodities covered and providing more repayment options for the popular program.
Starting April 1, producers can request advances for all their commodities through one application with a single administrator. There can be advances for up to 45 commodities on one form.
As well, producers no longer need to be principally occupied in farming, and advances can be repaid without penalty if growers decides to wait to market their commodities until conditions are more favourable or if the product becomes unmarketable through no fault of their own.
Read Also
Green lentil market oversupplied
Farmers in Western Canada can expect price pressure on their new crop of green lentils, as the available supplies among the world’s major lentil-growing nations increase significantly.
Association chair Brett Halstead applauded the changes, which he said are mostly administrative in nature.
“It’s mostly just to make the paperwork a little easier,” he said.
The association had requested that the government double the individual limit to $800,000, but federal agriculture minister Gerry Ritz said no.
“It’s something that we feel is needed as farms continue to get larger and larger,” said Halstead.
“We’ve asked for any increase, but at this point in time he doesn’t see fit to do that. It’s still something we would like, but for now we’re pleased with these changes.”
Farmers can receive up to $400,000 in advances with the first $100,000 interest-free and the remaining $300,000 at CIBC’s prime rate.
The cash advance program is well used with close to 21,000 farmers taking out $1.9 billion in advances in 2014-15. That is up from the $1.6 billion distributed the previous year and $1.1 billion the year before that to that.
“Farmers find it a quick and easy way to get cash and manage their cash flow,” said Halstead. “Obviously, if they continue to come back they must like the program.”
Other changes cannot be implemented until amendments to related regulations are completed.
Future improvements include adding new commodities, such as specific classes of breeding animals intended for market.
Farmers will be treated like returning clients rather than new ones to streamline the application process.
They will be able to update forms with changes rather than starting from scratch every year.
There will be more options for securing advances and additional repayment flexibility. As well, there can be third-party guarantors for large corporations, co-operatives and subsidiaries in lieu of each individual in the organization providing a guarantee.
Halstead said farmers had a difficult time repaying 2013 advances because of that year’s rail transportation quagmire.
The federal government extended the repayment deadline to March 31, 2015, from Sept. 30, 2014 to accommodate growers who were having difficulty marketing their commodities.
Halstead believes the six-month extension was sufficient enough to get most growers out of the bind they were in.
“I don’t know every farmer’s circumstance, but I got to think it has got to have helped 99 percent of the people,” he said.
