News

Government of Canada Announces Interest Relief for Agriculture Producers

Jun 23, 2022

From: Agriculture and Agri-Food Canada

News release

June 23, 2022 – Ottawa, Ontario – Agriculture and Agri-Food Canada

Today, the Minister of Agriculture and Agri-Food, the Honourable Marie-Claude Bibeau, announced
that the interest-free portion of the Advance Payments Program will increase from $100,000 to
$250,000 for the 2022 and 2023 program years. As a result, participating producers will save on
average $5,500 in interest costs over the next two years. This change will represent total savings of
up to $61 million over two years for approximately 11,000 producers.

In recognition of the significant challenges facing Canadian producers, including rising input costs, the
Government of Canada is ensuring farmers have access to cash flow to cover crop-related expenses
by making a change to the Advance Payments Program.

The Program is designed to help producers manage their working capital by providing cash advances
of up to $1 million against the expected value of their commodities. Through the increase to the
interest-free portion, eligible producers will have access to additional cash flow over the next two
growing seasons.

The change to the program will make the purchase of important inputs such as fuel, fertilizer and seed
more affordable for producers. This will ensure they can maintain production until they are able to sell
their products in the fall or winter. The interest savings and access to cash flow are both critical in
helping Canadian producers continue to contribute to global food security.

As pressure on world food supplies continues to increase, Canada is prepared to help fill the gap in
world production. The Government of Canada is committed to ensuring producers have the resources
they need to protect Canada’s food systems and maximize their contribution to global food supplies.

Quote

“This year, agricultural producers are facing significant increases in input prices. By suspending
interest on the first $250,000 of their Advance Payments Program loans, we are providing relief to
those women and men who work so hard to feed us and the world in these uncertain times.”
- The Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food

 

Quick facts

• The Advance Payments Program cash advances are calculated based on up to 50% of the
  anticipated market value of the eligible agricultural products that will be produced or are in
  storage.
• The amendment to the Agricultural Marketing Programs Regulations is not retroactive, meaning
  the new limit will be applied to existing advances under the 2022 Advance Payments Program as
  of June 20, 2022, when the regulatory amendments came into force.
• As part of the Government of Canada’s efforts to support producers this spring, Minister Bibeau
  previously announced that producers would be able to receive 100% of their 2022 pre-production
  advances immediately when they apply, rather than receiving them in pre-seeding and post-seeding
  installments.
• The Advance Payments Program is delivered through 30 industry-led associations.
• In 2021, the Advance Payments Program provided $2.39 billion in advances to 17,430 producers
  across Canada.
• Given the significant increase to input costs, in December 2021, Farm Credit Canada proactively
  offered credit limit increases of 30% for crop input financing to customers that met specific preapproval
  criteria.
• Farmers experiencing financial challenges are also encouraged to apply for assistance available
  under the Canadian Agricultural Partnership’s Business Risk Management (BRM) programs to
  help them manage risk related to significant market volatility and disaster situations.

 

Additional Links

Advance Payments Program
Business Risk Management (BRM)

 

Contacts

Marianne Dandurand
Press Secretary
Office of the Minister of Agriculture and Agri-Food
marianne.dandurand@agr.gc.ca
343-541-9229

Media Relations
Agriculture and Agri-Food Canada
Ottawa, Ontario
1-866-345-7972
aafc.mediarelations-relationsmedias.aac@agr.gc.ca
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