March 24, 2020, Ottawa, Ont. – Prime Minister Justin Trudeau has announced new measures to support farmers and agri-food businesses in Canada that are facing financial hardship due to the impacts of the COVID-19 pandemic.
Farm Credit Canada (FCC) will receive support from the federal government that will allow for an additional $5 billion in lending capacity to producers, agribusinesses, and food processors.
The government said in a press release that the move will offer increased flexibility to farmers who face cashflow issues and to processors who are impacted by lost sales, helping them remain financially strong during this time.
In addition, all eligible farmers who have an outstanding Advance Payments Program (APP) loan due on or before April 30 will receive a Stay of Default, allowing them an additional six months to repay the loan. This measure, which represents $173 million in deferred loans, is aimed at keeping more money in farmers’ pockets.
The government stated the Stay of Default will also provide farmers the flexibility they need to manage their cashflow when facing lower prices or reduced marketing opportunities. Applicable farmers who still have interest-free loans outstanding will have the opportunity to apply for an additional $100,000 interest-free portion for 2020-2021, as long as their total APP advances remain under the $1-million cap.
The government stated that it remains committed to supporting Canada’s agricultural sector to ensure that farmers and businesses have the support they need to provide for their families and all Canadians during the pandemic.
“Farmers and food producers work hard to put food on tables across our country, and they should not have to worry about being able to afford their loan payments or having enough money to support their own families,” said Trudeau. “We are taking action now to give them more flexibility to meet the challenges ahead in these times of uncertainty.”
Agriculture and Agri-Food Minister Marie-Claude Bibeau said she is grateful to farmers and food business owners and employees, who continue working hard so Canadians have quality food on grocery store shelves and kitchen tables.
“Their continued work is essential to our plan to manage COVID-19. The measures announced today will provide farmers and food producers across the country with important financial flexibility they will need during these challenging times.”
In a separate statement, FCC president and CEO Michael Hoffort said the organization will use its resources to find solutions that offer the best chance for recovery going forward so the industry emerges stronger.
“Supporting the industry will also take strong collaboration between banks, credit unions, FCC and other financial institutions. FCC has served as a strong and stable industry presence for more than 60 years, and this current situation is no different. We will be working in partnership with other financial providers to offer the solutions needed by the agriculture and food industry to take on the challenges ahead.”
Customers facing financial pressure are encouraged to contact their FCC relationship manager or the FCC customer service centre at 1-888-332-3301 to discuss their individual situation and options.
Grains, oilseeds, and pulse producers who participated in the 2018 Stay of Default announced this summer, are encouraged to contact their administrator for more details. Cattle, bison, flower, and potted plant producers should also contact their APP administrator to enquire about their eligibility for the Stay of Default.
The APP is a financial loan guarantee program that provides producers easy access to credit through cash advances. For the 2019 program year, there are more than 21,000 producers participating and more than $3 billion in advances.
Administrators participating in the Stay of Default are the Alberta Sugar Beet Growers, Alberta Wheat Commission, BC Breeder and Feeder Association, Canadian Canola Growers Association, Manitoba Corn Growers Association Inc., Manitoba Livestock Cash Advance Inc., Western Cash Advance Program Inc., PEI Federation of Agriculture, and the Agricultural Credit Corporation.
The new deadlines for outstanding APP loans are as follows:
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