By Alice McFarlane

Federal government adjusts Advance Payments Program

Apr 6, 2022 | 2:20 PM

MELFORT, Sask. – Changes are being made to the Advance Payments Program (APP) to give farmers a chance to increase cash flow immediately.

There will be a temporary waiving of the requirement for pre-production advances to be issued in two installments, 60 per cent upfront and 40 per cent after seeding is confirmed. Producers will now be able to receive 100 per cent of their allowable advance upfront instead of 60 per cent.

Agriculture and Agri-Food Minister Marie-Claude Bibeau said everything from feed shortages due to drought, delays stemming from the global pandemic and the war in Ukraine have disrupted supply chains and increased costs for inputs, fuel, and fertilizer.

“The temporary change to the APP comes in time for the planting season and will help farmers purchase the inputs needed for sustainable food production,” Bibeau said.

The Agricultural Producers Association of Saskatchewan (APAS) President Ian Boxall said it was good to know the federal government recognized the need for improvements to the program.

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“Producers are facing some big increases in input costs as well as rising interest rates, and this change will help us to manage our costs,” Boxall said. “This will be especially helpful to young producers and operations that are facing cash flow issues after last year’s severe drought.”

Producers can access credit through cash advances of up to $1 million based on the expected value of their agricultural product. The first $100,000 in each crop year is interest free.

The cash advance is delivered through 30 industry led associations.

In 2021, the APP provided $2.39 billion in advances to 17,430 producers across Canada.

Meanwhile, Farm Credit Canada has proactively offered credit limit increases of 30 per cent for crop input financing to customers that met specific pre-approval criteria, ensuring they have access to the capital they need for the upcoming growing season.

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alice.mcfarlane@pattisonmedia.com

On Twitter: @farmnewsNOW