QUEBEC CITY — The federal government is more than doubling, to $50,000, the amount of interest-free cash advances a farmer can borrow this spring against next autumn’s harvest receipts.
Application forms will be available in early April and the first loans could be issued as early as mid-April, according to federal officials.
To be eligible, farmers must be protected by crop insurance or a similar program.
The announcement of an increase from last year’s $20,000 maximum came from agriculture minister Lyle Vanclief March 6, just before he entered a federal-provincial meeting of agriculture ministers.
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“This will make up to $700 million available next month for interest-free loans to help farmers with the spring planting expenses,” Vanclief said. “It is a means to help farmers quickly and effectively.”
Vanclief, under fire from provincial ministers and farmers over the size and shape of his earlier $500 million farm aid program, called the cash advance announcement “evidence of the very serious regard this government has and takes for the views of the current pressures on Canadian farmers.”
He said the announcement could cost Ottawa up to $45 million to cover the interest charges if farmers use the program’s full amount.
Provincial ministers and farm leaders welcomed the announcement as a way for farmers to get their hands on enough money to get their crops seeded and fertilized this spring.
“This is a good announcement,” said Canadian Federation of Agriculture president Bob Friesen, who flew to the ministers’ meeting to lobby for money. “The spring cash advance is a tool farmers can use to help with the cash flow.”
Saskatchewan minister Clay Serby said the increased amount of cash available will help his province’s farmers get their crop seeded this year.
But both also said farmers and urban dwellers should not make more of this than it is.
It is not a $700 million cash injection. It is up to another $700 million in debt room that allows farmers essentially to spend money this spring that they will not earn until next autumn when they sell their crop.
And the federal willingness to spend up to $45 million to cover interest charges does not represent new aid money. It is money that comes out of Ottawa’s basic $600 million annual safety net fund.
“This is not adding and we are not happy about that,” Quebec farm leader Laurent Pellerin said in an interview. “Really, he has announced this money twice. We do not like that kind of behavior.”
But Vanclief said he was responding to strong producer demands with his announcement and the interest-free loans are an important part of the government’s effort to make sure farmers can get a crop in this spring.
“Farmers always have their own credit arrangements,” he said when asked if he thought government help is enough to allow producers to cover higher input costs.
“Certainly with the $500 million we put forward last week and with the 40 percent from the provinces, which will make an additional $330 million for a total of $830, and the availability of up to $50,000 per farmer, it’s a considerable contribution towards assisting producers this spring.”
