The federal government and Farm Credit Canada are aware that fertilizer, fuel and feed prices have exploded in the last year.
To help producers cover the additional expense, Agriculture Canada and FCC have enhanced their lending programs.
In early April, Ag Canada announced changes to the Advance Payments Program and participating farmers will now receive an injection of capital as soon as possible.
“There will be a temporary waiving of the requirement for pre-production advances to be issued in two installments, 60 percent upfront and 40 percent after seeding is confirmed,” Ag Canada said. “This change will allow producers to receive 100 percent of their 2022 advance immediately when they apply.”
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Under the Advance Payments Program, producers receive cash advances to a limit of $1 million, based on the expected value of their crop. The first $100,000 is interest free.
“This temporary change to the Advance Payments Program comes in time for the planting season and will help farmers purchase the inputs needed for sustainable food production,” said federal Agriculture Minister Marie-Claude Bibeau.
As of February, data from Alberta Agriculture indicates that anhydrous ammonia prices have gone from $887 per tonne in February 2021 to $1,658 per tonne this February. Similarly, the price of urea has also doubled in the last 12 months. Diesel prices have also climbed. In mid-April, prices ranged from $1.70 per litre in Alberta to $1.90 per litre in Manitoba.
FCC has responded to the jump in fuel and fertilizer costs by increasing credit limits for customers who meet pre-approval criteria. It’s also offering a two-year line of credit, up to $500,000, for qualified customers.
“We want to ensure producers and food processors have sufficient capital to bridge any cash flow gaps during this time of multiple input cost increases,” said Michael Hoffort, FCC president and chief executive officer.
“We want to ensure our customers have the working capital to buy whatever inputs they need, when they need them, to keep their day-to-day operations running smoothly.”
Producers interested in the line of credit, or increased credit limits, should contact their local FCC office.
For more information on changes to the Advanced Payment Program, click here.
