Producers to benefit from reduced red tape, ease of access, and flexible repayment options
March 30, 2015 – Saskatoon, Saskatchewan – Agriculture and Agri-Food Canada
Agriculture Minister Gerry Ritz today highlighted major enhancements to the Advance Payments Program (APP) designed to improve and streamline administration, provide greater flexibility and more repayment options, and ease access to the program for producers.
On February 27, 2015, the Government announced the coming into force of the Agricultural Growth Act which makes improvements to the Advance Payments Program (APP). The Act modernizes and strengthens federal agriculture legislation, supports innovation in the Canadian agriculture industry and enhances global market opportunities.
Many of the changes implemented under the Act will take effect on April 1, 2015, for the 2015 Program Year, in time to help producers plan for the new production year. The new Act also allows for further improvements to be implemented once amendments to the related regulations are completed.
- The APP is a federal loan guarantee program that helps agricultural producers benefit from the best market conditions by improving their cash flow throughout the year.
- Starting April 1, producers can now request advances for all their commodities through one application with a single administrator, significantly reducing their paper burden.
- In addition, there is no longer a requirement for a farmer to be principally occupied in farming in order to utilize APP.
- Across Canada, more than $1.9 billion in advances has been provided to close to 21,000 producers for the 2014 program year to date.
- For a full list of improvements, please visit the Advance Payments Program’s website.
“Our Government remains committed to supporting Canada’s producers and our world-class agriculture industry to ensure it remains competitive on world markets. We’ve improved the Advance Payments Program to give farmers a more flexible tool to manage their cash flow, while cutting red tape and improving efficiency.”
Agriculture Minister Gerry Ritz
“The Advance Payments Program is a valuable marketing and cash flow management tool for farmers. Our organization is continually looking for opportunities to enhance producer prosperity, so improvements that make this program more accessible and easier for farmers to use are welcomed news.”
Dale Leftwich, President of SaskCanola
“The cash advance program is a tool that can help Canadian cattle producers to market their cattle when they see the best opportunities. The changes in C-18 make it more user friendly for producers across Canada. I urge cattle producers to evaluate all their business risk options including the cash advance, price insurance and AgriStability. These tools can help producers to maximize the opportunities and manage some of the risks the current market provides.”
Dave Solverson, President of the Canadian Cattlemen’s Association
Advance Payments Program improved under the Agricultural Growth Act
The Advance Payments Program (APP) is a financial loan guarantee program that gives producers easier access to credit through cash advances. The program is designed to increase marketing opportunities for eligible producers of agricultural products by improving their cash-flow. APP guarantees the repayment of cash advances issued to producers against their agricultural product(s).
Advances provide up to 50% of the average market price producers are expected to receive for their agricultural product. Producers can receive cash advances of up to $400,000, with the first $100,000 interest-free for up to 18 months. Nearly sixty producer organizations across the country deliver cash advances under the APP.
The Agricultural Growth Act (Bill C-18) introduced changes to the Agricultural Marketing Programs Act (AMPA) to improve and streamline administration of the APP, provide greater flexibility and more repayment options, and ease access to APP advances. Many of the changes to the APP will be in place for April 1st, 2015. However, a number of the changes cannot be implemented until amendments to the related regulations are completed.
What’s New for 2015
-Producers can receive advances for all commodities through one application with a single administrator;
-No requirement for a producer to be principally occupied in farming;
-A repayment schedule in line with the perishable date of non-storable products thereby avoiding the need for proof of sale;
- Repayment of advances can be made without proof of sale without penalty:
- When a producer waits to market the commodity until conditions are more favourable; or
- If the agricultural product becomes unmarketable through no fault of the producer.
Improvements Targeted for 2016
The new Agricultural Growth Act also allows for future improvements to be made through regulations, targeted for 2016:
- New commodities to be eligible for advances, including specific classes of breeding animals intended for market;
- A new streamlined application process will reduce paper burden and treat farmers like returning clients;
- More options for producers to secure an APP advance;
- Additional flexibility for allowable repayment methods;
- Streamlined approach to obtaining guarantees for companies with many members.
Farm Debt Mediation Services
The Agricultural Growth Act also introduced changes to the Farm Debt Mediation Act which will streamline interaction between the APP and Farm Debt Mediation Services to ensure all necessary parties are involved in a mediation process. For producers this means the right people at the table to negotiate repayment arrangements, making it easier for producers to resolve their situation.