A change to the Advance Payments Program could save Canadian farmers millions of dollars in the next couple years.
In late June, Agriculture Canada altered the terms of the APP, increasing the interest-free portion of the cash advances from $100,000 to $250,000.
“This change will represent total savings (in interest) of up to $61 million over two years for approximately 11,000 producers,” Agriculture Canada said in a release.
The Advance Payments Program is a federal loan program delivered by 30 groups across the country. The program helps producers manage their working capital, by providing cash advances of up to $1 million against the expected value of their commodities.
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When producers have the necessary cash flow to cover the cost of seed, fertilizer and other inputs, they aren’t forced to sell crops immediately after harvest to pay their bills.
“Producers’ cash flow has been hit hard over the last year by the widespread drought conditions and now the rising costs of fuel, seed, and in crop management,” says Alberta Wheat Commission chair Greg Sears. “The cost savings instilled by this change will ensure we are set up for success.”
The Alberta Wheat Commission is one of the organizations that administers the APP, through an entity called FarmCash.
The Canadian Canola Growers Association also administers the Advanced Payments Program.
“With higher input costs, rising interest-rates, and continued pressure from weather impacts and supply chain challenges, many farmers will be keen to access the increased benefit soon,” said Dave Gallant, director of finance and operations with the CCGA.
In 2021, the Advance Payments Program provided $2.39 billion in advances to 17,430 farmers across Canada.
