Canadian farmers have been making plans for the 2024 season assuming that the interest-free portion of the Advanced Payments Program would revert back to the pre-2022 level of $100,000.
As of today, however, farmers will have access to the first $250,000 interest-free, following an announcement by Lawrence MacAulay, Minister of Agriculture and Agri-Food.
The Advance Payments Program gives producers access to cash advances of up to $1 million, based on the expected value of their agricultural product. Under the program, producers would normally receive the first $100,000 interest-free. During 2022 and 2023, the interest-free portion of the APP was increased first to $250,000 and then to $350,000, but the regulatory amendment did not apply beyond 2023, so producers were planning for a return to pre-2022 levels.
Canadian producers have faced significant challenges, including elevated input prices and interest rates, which have impacted their cash flow, says Agriculture and Agri-Food Canada. This change will save approximately 11,950 participating producers an additional $4,916 in interest costs on average, for a total savings of up to $58.7 million for the sector.
“In the face of so many challenges, our hardworking producers continue to show their resilience and produce top-quality products for Canadians, and the world. Increasing the interest-free portion of the Advance Payments Program means improved cash flow and savings for farmers as we head into the 2024 planting season,” says MacAulay, in a press release.
Under the Advance Payments Program, cash advances are calculated based on up to 50 per cent of the anticipated market value of eligible agricultural products that will be produced or are in storage. The program is delivered through 27 industry-led associations. Advances are available on over 500 crop and livestock products across Canada.
