The administration of cash advances has become a competitive business following legislative changes to the federal government’s cash advance program last year.
With the passage of Bill C-18, each producer group that serves as an Advance Payments Program administrator (find a list here) can issue the short-term loans for all 45 crops and livestock types covered in the program. Previously, each administrator looked after specific commodities in a specific region or province.
“It gives farmers an option and allows us to compete on a service level with those other organizations,” explains Dave Gallant, director of finance and operations for the Canadian Canola Growers Association, which issues advances on crops and livestock for producers across Western Canada.
There has been slight growth in the number of farmers who use the program, he says. In the 2014-15 program year, the CCGA issued close to 11,000 advances.
Raising the maximum limit on how much a farm can access through the program was also discussed during the last legislative review, but the government chose to leave the cap at $400,000 (with the first $100,000 interest free).
“We would like to see the cap raised. We believe that what was relevant for a farm ten years ago is not a relevant amount to a farm today,” says Gallant. “We’re hoping we can provide enough evidence to the minister and the department to justify increasing those limits.”
The 2016 cash advance program begins on April 1st. Gallant says the CCGA begin taking applications in early March. He gets into the terms of the program and more in this Canola School episode: