May 29th, 2015
Young and upcoming farmers are essential in sustaining the agriculture sector of Canada in the emerging markets worldwide. In order to ensure successful crop and livestock production, there are programs and services made available to provide funding as well as support to help producers out with their business. Listed below are three out of the six programs to help keep Canada as a strong competitor in the agricultural industry.
Advance Payments Program
Objective goals to give producers easier access to credit through cash advances, the Advance Payments Program (APP) is financial loan guarantee program. These guarantees provide producers with the means to borrow money from financial institutions at lower interest rates and receive cash advances on the estimated value of their farm product that is either being produced or that is in storage. Throughout the year, farmers are given better opportunities for marketing their agricultural products through the means of improved access to cash.
During a specified period of time, producers are given cash in advance with a maximum of $400,000 available to each producer on the value of their agricultural products. From the benefits of the best market conditions presented to producers, crop and livestock producers will have their financial obligations met. The APP can be accessed through producer organizations that administer program through an agreement with the Agriculture and Agri-Food Canada (AAFC) alongside a designated lending institution.
AgriInsurance is a federal-provincial-producer cost-shared program that provides stability to a producer’s income through minimizing financial impacts of production losses caused by natural hazards. AgriInsurance plans are developed and delivered by each province to meet the needs of producers by helping to cover production losses.
The loss of product quality of both yield and non-yield plans are offered covering traditional crops such as wheat, corn, oats, and barely. Plans also cover horticultural crops such as lettuce, strawberries, carrots, and eggplants. Depending on the province, the production of maple syrup and bee mortality can also be covered under the AgriInsurance. The province is continually improving programs to meet the industry’s requirements.
Expanding the coverage to livestock producers, clear guidelines set by Growing Forward 2 (GF2) was also developed and implemented under AgriInsurance.
This program aims to provide support when producers experience a large margin decline. If a producer’s current year program margin falls below 70% of the reference margin, they are eligible to receive an AgriStability program payment.
The program margin is the allowable income minus allowable expenses in a given year, with adjustments for changes in receivables, payables, and inventory. The reference margin is the average program margin for three out of the past five years where the lowest and highest margins are dropped. All adjustments are based on information submitted by the producer ad the reference margin will be limited based on the lower historical reference margin or the average allowable expenses for the years used in the reference margin calculation.
Aside from the programs mentioned above, you can look into your provincial or territorial government to see if they offer any other programs or services for upcoming farmers. These programs are made available to new farmers to encourage, inspire, and motivate producers to remain competitive in the presence of emerging markets. Contact INAC to see which programs will fit your business.