Government of Canada announces changes to the Advance Payments Program to support farmers ahead of planting season

Government of Canada announces changes to the Advance Payments Program to support farmers ahead of planting season

Exceptional circumstances such as feed shortages due to drought and delays stemming from the global pandemic and the war in Ukraine have disrupted supply chains and increased input costs for Canadian farmers, including for fuel and fertilizer. In these challenging times, it is important that farmers have the support they need to ensure a successful 2022 planting season.

Today, the Minister of Agriculture and Agri-Food, the Honourable Marie-Claude Bibeau, announced a change to the Advance Payments Program that will increase cash flow to producers this spring to help with these high input costs. There will be a temporary waiving of the requirement for pre-production advances to be issued in two installments, 60 per cent upfront and 40 per cent after seeding is confirmed. This change will allow producers to receive 100 per cent of their 2022 advance immediately when they apply.

Under the Advance Payments Program, producers are provided with easy access to affordable credit through cash advances of up to $1 million based on the expected value of their agricultural product, of which the first $100,000 in each crop year is interest free. Access to additional cash flow at the start of the production cycle will ensure farmers can purchase important inputs such as fuel, fertilizer and seed, in order to maintain full production this growing season. Pressure on world food supplies continues to increase due to the conflict in Ukraine. Canada is prepared to help fill the gap in world production.

Given the significant increase to input costs, in December 2021 Farm Credit Canada proactively offered credit limit increases of 30 per cent for crop input financing to customers that met specific pre-approval criteria, ensuring they have access to the capital they need for the upcoming growing season.

The Government of Canada remains committed to supporting Canada’s agriculture sector to ensure farmers and businesses have the tools they need to ensure a continuous supply of safe and nutritious food for Canada and the world.

Quotes

“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. In these uncertain times, it is more important than ever that our farmers are able to maximize their production to feed Canadians and the world. 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 Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food

Quick facts

  • 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 APP is delivered through 30 industry led associations.
  • In 2021, the APP provided $2.39 billion in advances to 17,430 producers across Canada.

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