Legislation to enrich, expand and deepen the cash advance program passed through Parliament last week, but it will be months before it is expanded beyond grains and oilseeds to livestock and some horticulture products.
Amendments to the Agricultural Marketing Programs Act passed quickly through the Senate last week.
When fully implemented, it will increase the maximum cash advance against unsold farm inventory to $400,000 per farm and extend the program to other farm products.
In the interim, the government has temporarily made available to grains and oilseeds producers the most lucrative part of the reform – increasing the interest-free portion of the cash advance to $100,000 from $50,000.
Read Also
August rain welcome, but offered limited relief
Increased precipitation in August aids farmers prior to harvest in southern prairies of Canada.
But the Agriculture Canada official in charge of implementing the new program said it will not be fully offered before early 2007. It means livestock and horticultural producers will have to wait until then to be included and the maximum advance payment available to grains and oilseeds producers will remain at $250,000 until then.
“We want to do it as quickly as possible but we have to follow the rules and getting regulations approved is a long process,” said Michel Massé, acting director of the financial guarantee programs division of Agriculture Canada.
That involves consultations with livestock and horticultural groups to develop proposed regulations for how the cash advance program could be delivered to farmers, then publishing proposed regulations, allowing a period of public comment and then publishing final regulations that have to be approved by a parliamentary committee.
The intent is clear but the detail needed to get there is complex, said Massé.
“We have no experience with cash advance in livestock so we have to create something new.”
A wrinkle in the process is that the department has to find an industry group willing to administer the cash advance program before it is enacted.
The Canadian Cattlemen’s Association, Canadian Pork Council and Canadian Horticultural Council will be consulted about who is willing and able to run the program, including details of interest rates, repayment methods and auditing. If no industry group is willing, financial institutions could be asked to provide the service.
The government does not deliver the cash advance program but will pay interest on the first $100,000 in loans to the lending institution. Once implemented, the new legislation will extend the repayment period on cash advance loans against unsold produce to 18 months.
The government said that once the program is working, it will make hundreds of millions of dollars available to farmers, giving them flexibility about when to market their produce.
