Federal Agriculture Minister Marie-Claude Bibeau has announced a change to the Advance Payments Program (APP) that aims to help producers finance record high input costs heading into the 2022 planting season.
The federal government is temporarily waiving the requirement that cash advances issued prior to seeding be disbursed in two instalments — 60 per cent up front and 40 per cent after seeding is confirmed. The change means producers will be able to receive 100 per cent of their 2022 advance upon applying.
Th Advance Payments Program (APP) provides producers with short-term loans of up to $1 million based on the expected value of their agricultural production, of which the first $100,000 in each crop year is interest free. The program is administered by more than two dozen industry organizations and covers over 50 different commodities.
“Canada’s agricultural producers are facing an increase in the cost of raw materials, including fuel and fertilizer, a situation exacerbated by Russia’s invasion of Ukraine,” noted Minister Bibeau. “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.”
The Alberta Wheat Commission said producers that have already applied for a cash advance through the commission’s FarmCash platform will receive the remainder of their advances within twenty-four hours of the APP announcement.
“The change announced today is welcomed by producers struggling with their cash flow this season,” said Alberta Wheat Commission chair Greg Sears. “The APP has a deep-rooted history in helping producers stay ahead of the curve, but we have seen that agriculture is susceptible to the flux of markets and global events. In these unprecedented times, changes to business risk management programs are necessary to help producers and industry weather the challenges.”
The Canadian Canola Growers Association, meanwhile, reported a “robust” number of applications on the first day of the 2022 program. The CCGA said it issued over $275 million to more than 1,500 farmers on April 1st alone.
Higher commodity prices are also resulting in higher advance rates. As an example, the CCGA noted the 2022 rate for wheat is up $34/tonne, and for canola is up $111/tonne over 2021 rates.