The federal government made another change to the Advance Payments Program, not long after the first cash advances were issued to farmers who applied.
The change sees the interest-free portion of a cash advance for more than 50 eligible commodities increase from $100,000 to $250,000.
"This is the sixth time in eight years that the government has made this change," said Dave Gallant, Vice-President of Finance and APP Operations at the Canadian Canola Growers Association, an organization that administers the program for Western Canada.
"So our position is make a decision on what the interest free limit is going to be so that farmers know and can consistently plan on what their working capital needs are and what that cost of those working capital needs are going to be through using the program, whether it's $100,000 interest free or $250,000 interest free going forward."
He says the federal government informed them of the change on April 1, after they had already issued more than $335 million in cash advances to 1,740 farmers across Western Canada.
"We will be fixing this week all the accounts that were issued to the new interest free limits to make sure that farmers can take advantage of the maximum interest free that they're available." Gallant said.
He adds demand for the program was growing prior to the announcement.
"I think the government announcement is just going to further boost farmer desire for the program. Input costs are still going up, and it's getting more expensive to put a crop in the ground, so I think a lot of farmers are going to look at the program and say given the interest free that's available to them, they're going to take full advantage of it to maximize the return on their farm."
The change means farmers can apply up to $1 million in financing, including the aforementioned $250-thousand interest-free on more than 50 commodities and up to an additional $250-thousand on canola, before the remaining $500 thousand is subject to an interest-bearing rate of prime minus 0.25%.
