Recent challenges with grain transportation have frustrated Canadian agriculture producers. To assist them, the Federal Government has made major changes to the Advance Payments Program (APP).
 
The APP is a financial loan guarantee program that gives producers easier access to credit through cash advances. The program is designed to increase marketing opportunities by improving the cash flow for eligible producers of agricultural products. The APP guarantees the repayment of cash advances issued to producers against their agricultural products.

In 2014, the Government announced a six-month stay-of-default extension for 2013 advance repayments, from September 30, 2014 to March 31, 2015. Effective April 1, 2015, APP enhancements improve and streamline administration, making the program more accessible to producers. It will also provide greater flexibility and more repayment options.

Advances provide up to 50 per cent of the average market price producers are expected to receive for their agricultural product. Producers can receive cash advances of up to $400,000, with the first $100,000 interest-free for up to 18 months. Nearly 60 producer organizations across the country deliver cash advances under the APP.

Along with many other Members of Parliament, I received calls over the winter from farmers requesting changes to the program. Farmers recognize the benefits of the APP, but because of the backlog at the elevators and along the railways, these same farmers were having great difficulty selling and shipping their product.

Some of the producer organizations facilitating the APP were providing farmers with the ability to pay off their advance with cash. The new program enhancements will solidify that option. As of April 1, 2015:

• Farmers can utilize a repayment schedule in line with the perishable date of non-storable products, thereby avoiding the need for proof of sale;
• No penalty will be levied for repayment of advances made without proof of sale:
• When a producer waits to market the commodity until conditions are more favourable; or
• If the agricultural product becomes unmarketable through no fault of the producer.
• Producers can receive advances for all commodities through one application with a single administrator;
• Producers are no longer required to be principally occupied in farming.

The 2014 program provided more than $1.9 billion in advances to close to 21,000 producers across Canada.
 
Find more information on the APP at www.agr.gc.ca

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