Cash advance program can be particularly beneficial for young farmers

The government-backed Advance Payments Program, commonly called the cash advance, is a tool used by farmers to even-out cash flow and help take the pressure off marketing decisions. It has expanded over the past few decades from a small program offered by the Canadian Wheat Board (CWB) for wheat, barley, and durum, to a program now offered across Canada by over 30 different organizations covering 45 commodities, including livestock.

Dave Gallant knows all about the cash advance program. He’s the director of finance for the Canadian Canola Growers Association (CCGA), which administers the cash advance on behalf of the federal government in the four western provinces. Gallant was at the Agricultural Excellence Conference at Winnipeg, Man,  where he spoke a little about the history of the CCGA and the importance of the cash advance program, particularly to young farmers.

According to Gallant the program is a good fit for farmers who are just starting out because it offers increased marketing flexibility. Accessing the funds doesn’t require collateral requirements beyond the inventory, either, Gallant adds.

He continues, “There’s that interest savings which I think is beneficial for every farmer, but it’s more beneficial to a younger farmer.” The last thing that makes it probably more beneficial for young farmers versus a bank loan or operating loan, is that those products require regular monthly payments. “With this program you only pay as you sell the product,” he says.

Gallant explains that while the Canola Growers certainly take care of canola-linked advances, the group also administers the program for cereal crops (wheat, durum, barley), specialty crops, such as pulses, mustard, and forage crops, and also for  livestock, including cattle, bison, sheep, goats, and hogs.

Hear the entire interview with Dave Gallant, director, finance and operations for the CCGA below.

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