The federal government has made good on a budget promise to increase the interest-free portion of the Advance Payment Program.
Farmers now have access to $350,000 before paying interest, up from $250,000. The maximum available is $1 million.
Canadian Canola Growers Association director of APP operations Dave Gallant said the organization is working to update the program as soon as possible.
“Given the current business environment, farmers will be keen to take advantage of the cost savings they can realize from this change,” he said in a news release.
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CCGA is one of 30 organizations that deliver the program on behalf of the government.
Federal agriculture minister Marie-Claude Bibeau said farmers are facing significant financial challenges, and saving some interest costs will help them maintain production. Ottawa will pay the interest on the exempt amount. The program interest rate is prime less 0.75 percent.
The government raised the interest-free amount from $100,000 last summer and expects to spend about $13 million to cover the interest.
It estimates the total investment from these program changes at about $95 million for 2022 and 2023.
APP advances are based on up to 50 percent of the expected market value of the product or product in storage. The changes are not retroactive and took effect May 8.
Advances are available for crops, livestock and honey.
The Alberta Wheat Commission is another deliverer of the APP. AWC chair Greg Sears said its FarmCash program is growing.
“The sheer volume of producers applying reiterates the demand for the Alberta Wheat Commission to provide the program and support Western Canada’s agriculture industry in light of increased inflation,” he said in a release.
