In early December 2013, federal Agriculture Minister Gerry Ritz introduced a new bill that will boost investment and innovation in the agriculture sector and give Canadian farmers more tools to compete on the world stage.  The bill, entitled the Agricultural Growth Act, includes proposed changes to the Plant Breeders’ Rights Act, and also amends the Agricultural Marketing Programs Act (AMPA) and the Farm Debt Mediation Act (FDMA).

The Advance Payments Program (APP), which falls under AMPA, is designed to increase marketing opportunities for eligible producers by improving cash-flow.  Spring cash advances, for example, are available through the Advance Payment Program.  The APP is delivered by administrators (third party organizations such as the Canadian Canola Growers Association), through agreements between them, a financial institution and Agriculture and Agri-Food Canada.

While the cash advances issued to producers are guaranteed against their agricultural product or products under the APP, the federal government also guarantees repayment of cash advances issued to farmers by the producer organization. These guarantees help the administrator to borrow money from financial institutions at lower interest rates and issue producers a cash advance on the anticipated value of their farm product that is being produced and/or that is in storage.

Proposed amendments to the AMPA have been introduced in Parliament to simplify the administration of the APP, reduce red tape, and enhance program flexibility and accessibility.

The proposed changes include:

• Simplify delivery and ease access to the APP for producers by allowing all administrators to issue advances on any type of agricultural product, not just those they market. For producers this means they could have the option of obtaining advances on all their eligible commodities from a single window.
• Allow for multi-year advance guarantee agreements and repayment agreements with administrators to reduce red tape for producers and improve program delivery.
• Provide greater flexibility and options for what will be accepted as security.
• Clarify definitions of a “producer,” such as removing the requirement that an applicant be principally occupied in farming under the Act, so that the APP is reflective of the realities of the sector today.
• Adjust the rules for the repayment of advances, producers who default, default penalties, and stays of default. For producers these changes will increase flexibility and provide more consistency and predictability under the APP.

As the Act is just now before Parliament, current rules will remain in place for the time being.  The proposed amendments follow extensive consultations with producers and industry and will be cost-neutral for the industry.

-30-

The audio version of Garry's February 3, 2014 op-ed column can be heard by clicking here