Co-operative financing
Manitoba farmers can get financing for shares in new-generation co-operatives through the Manitoba Agricultural Credit Corporation, the provincial government has announced.
Agriculture minister Harry Enns said financing for producer-owned processing facilities will be handled under MACC’s direct loan program.
“New-generation co-operatives provide producers with the opportunity to realize some of the benefits of vertical integration. That is, producers not only benefit from the sale of their raw product to the co-op processing facility, but also share in the profits of that facility,” said Enns.
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The maximum loan available for individuals is $325,000. Corporations, partnerships and farming co-ops can borrow up to $650,000. All eligibility criteria and security requirements will apply to loans for equity shares.
Enns said the Young Farmer Rebate Program, which provides farmers under the age of 40 with up to $10,000 in interest rebates on direct loans, will also apply to equity share loans.
Loan guarantee
MACC’s diversification loan guarantee program is now able to include a guarantee on loans from participating commercial lenders for the purchase of equity shares.
Enns said the enhancement will accommodate projects that do not fall within the framework of MACC’s direct loan program, which can guarantee diversification and value-added projects of up to $3 million.
New-generation co-ops are generally associated with the processing of an agricultural commodity. Participating producers purchase co-op equity shares, the proceeds of which are used for start-up costs of the co-op.
