Farmers who don’t get their crops off this fall could still be eligible
for cash advances.
Edward Thomas, the Canadian Wheat Board’s manager of farm accounts,
said it’s up to organizations that administer cash advances to ask the
federal government to authorize payments under the emergency payment
provisions of the Advance Payments Program Act.
Based on experience, he said, the government will say yes.
“If there is a significant problem out there, I don’t see a problem in
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getting the program authorized.”
He said the board will formally decide at the beginning of November
whether to ask the government to authorize emergency advances.
“It certainly looks like there will be a problem at this time, but a
lot will depend on the weather over the next couple of weeks.”
Ernie Doerksen of the Canadian Canola Growers Association, which
administers the advance payments program for non-board crops, said he
has already talked to federal officials about the issue.
Normally, farmers must have crop in the bin to qualify for a cash
advance, which is doled out based on the volume of grain harvested.
With much of the prairie crop still unharvested, some producer groups
have raised concerns about how that might affect advance payments for
board and non-board crops.
They’ve also expressed concern about how unharvested grain might affect
farmers who took out spring advances. They must be repaid by Dec. 31 or
rolled over into the 2002-03 fall cash advance program.
“This is just one example of the type of cash flow problems producers
are facing,” said Terry Hildebrandt, president of Agricultural Producer
of Saskatchewan, which had urged the federal government to implement
the emergency advance provision.
While there is a precedent for emergency fall advances for unharvested
grain, the question of how that will affect the relatively new spring
advances hasn’t been dealt with before.
“We have identified to the government already that there will be an
issue there for some farmers,” Thomas said. “Normally most farmers can
repay it by Dec. 31, but this year it is a potential issue.”
Under the emergency advance provision, farmers with unharvested crop
are eligible for an advance that is capped at either $25,000 or half of
the amount the farmer could have expected to receive if the grain was
harvested, whichever is less.
The latter is calculated by multiplying the number of unharvested acres
times the estimated yield times the per tonne advance rate.
For a regular advance, a farmer can receive up to $50,000
interest-free. The lower maximum for unharvested grain reflects the
expectation of lower-quality grain left out over the winter.
Doerksen said his biggest concern is estimating what’s in the field.
“How do you figure out how much grain there is to be harvested and that
it can be harvested in the spring and that it will be marketable?” he
said. “With yields and quality so variable, how do we determine what
it’s going to look like in the spring?”
The emergency advance provision was last used in 1996.
