Agriculture and Agri-Food Canada

Agriculture and Agri-Food Canada

March 29, 2005 18:50 ET

AAFC: Minister Announces Extension to the Farm Improvement and Marketing Cooperatives Loan Act


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: AGRICULTURE AND AGRI-FOOD CANADA

MARCH 29, 2005 - 18:50 ET

AAFC: Minister Announces Extension to the Farm
Improvement and Marketing Cooperatives Loan Act

REGINA, SASKATCHEWAN--(CCNMatthews - March 29, 2005) - Agriculture and
Agri-Food Minister Andy Mitchell confirmed that the Government of Canada
will continue to support applications under the Farm Improvement and
Marketing Cooperative Loan Act (FIMCLA).

The extension was announced in conjunction with the $1 billion in
immediate federal assistance for cash-strapped Canadian farmers facing
record low farm incomes. It is being provided as a transition measure
to allow farmers and lenders to explore other lending alternatives while
farmers deal with these unprecedented cash flow pressures. The
Government of Canada is also committed to examining other lending
alternatives and it is anticipated that such a review will be completed
by March 31, 2006.

The loan guarantee program was included in the Government expenditure
review process in the March 2005 budget as a result of a steady decline
in the number of loans registered through the program over the past ten
years.

"Declining loan registration indicates that the program requires
modernization and it is the Government's intention to design an
instrument that can be adapted to better meet today's situation, " said
Minister Mitchell. "Throughout the next year, I will examine how a
program such as FIMCLA could address identifiable debt-access gaps
especially those related to new farmers, who are not eligible under the
existing program."

The FIMCLA program was designed to increase the availability of loans
for the purpose of the improvement and development of farms and the
processing and distribution of farm products by cooperative
associations. The program is delivered by financial institutions across
the country.

Over the past ten years, FIMCLA loans have been predominantly used for
the purchase of implements, additional land and livestock. The majority
of loans (52%) have been to farmers in the grains and oilseeds sector,
while the beef sector has used the second largest number of loans (29%).

A recent review of the program confirmed a reduced demand for the
program nationally, with producers accessing their capital requirements
from lending institutions without the government guarantee.

Existing loans will continue to be guaranteed by the government until
the end of their terms.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Minister Mitchell's Office
    Elizabeth Whiting
    Press Secretary
    (613) 759-1059
    or
    Agriculture and Agri-Food Canada, Ottawa
    Media Relations
    (613) 759-7972
    (866) 345-7972 Toll-free