The Alberta government has announced that it’s immediately expanding Agriculture Financial Services Corporation’s lending program in an effort to offer more assistance to a changing industry.
Under the new program, producers will be now able to access up to $15 million, a three-fold increase from the former $5 million cap, for investing in their farms and ranches.
Jennifer Wood, board chair of AFSC, said during an announcement Oct. 10 that expanding the limit was needed in order to meet the needs of a changing market.
She said land values have increased, which would require more capital for investment. As well, after reviewing AFSC’s lending programs, it was found that there is a strong need for the services.
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“This lending limit increase enables AFSC to support primary producers in areas that were difficult before,” she said, noting that climbing land values have been a barrier for financial assistance.
“The capital cost for entry is a lot larger. With having this flexibility, AFSC can not only help the producers expand or start, but also partner with other organizations. That’s also key to this.”
As part of the increase, AFSC also launched a new lending mandate. Wood said lending will focus on operations that are starting up and expanding, as well as on farm succession.
She said one of the key areas of focus for the corporation is to provide lending to young and new farmers. It will be called the Next Generation Loan program.
As well, a young producer incentive will allow borrowers a one percent interest-rate reduction in order to reduce their financing costs.
“These new loan programs will support Alberta’s agricultural economy to enable expansion and increase productivity,” she said.
Agriculture Minister Oneil Carlier echoed that sentiment.
“To ensure continued growth, they require capital to expand their business,” he said.
“Providing improved access to capital is crucial for producers and agri-businesses to start, grow and thrive.”
As well, AFSC will provide two new business loan programs: one to help expand small and medium-sized agri-businesses in rural Alberta and the other for processors.
Two new long-term financing options will be available: the Developing Producer Loan program and the Alberta Producer Loan program. Wood said they will provide producers with a consistent fixed rate.
“They both have increased flexibility and allow more time for repayment,” she said.
“With these changes we will be able to attract new clients and support our existing ones.”
Bill Smith, senior vice-president and chair of BioNeutra, said the increase in lending would be beneficial and that AFSC has been a good partner to work with. The company recently opened a factory in Edmonton, employing 50 new people.
jeremy.simes@producer.com
