Agriculture and Agri-Food Canada

Agriculture and Agri-Food Canada

May 18, 2006 09:44 ET

AAFC/Minister Strahl Proposes Long-Term Loan Solutions Through Legislative Amendments

OTTAWA, ONTARIO--(CCNMatthews - May 18, 2006) - Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board Chuck Strahl today introduced amendments to the Agricultural Marketing Programs Act (AMPA) to improve cash advance programs for producers.



The government's amendments will:

- expand the coverage to include livestock and more crops;
- increase the overall limit on advances from $250,000 to $400,000;
- increase the amount of interest-free advances from $50,000 to
$100,000;
- consolidate the Advance Payments Program (fall) and the Spring
Credit Advance Program, as a single program under the AMPA.


"We're doubling the interest-free loans farmers can get, we're increasing the overall advance farmers can draw on, and we're expanding the program so that more farmers can qualify," said Minister Strahl. "These are practical changes to predictable and bankable programs, and we expect they will mean an additional $600 million a year in cash advances to producers."

To assist producers while the AMPA changes are being made, Minister Strahl announced the Enhanced Spring Credit Advance Program earlier today.


BACKGROUNDER

PROPOSED AMENDMENTS TO ADVANCE PAYMENTS PROGRAM
UNDER THE AGRICULTURAL MARKETING PROGRAMS ACT

Agriculture and Agri-Food Canada currently operates two cash advance programs, the Advance Payments Program (APP) and the Spring Credit Advance Program (SCAP). The two programs are complementary to each other, providing producers with interest-free loans, secured by Production Insurance or the value of harvested crops, at optimal times in the production cycle.

The proposed amendments follow through on the government's Budget 2006 commitment to enhance cash advance programming. These amendments would bring the program more in line with the higher level financial needs of today's farming enterprises.

On May 18, 2006 proposed amendments to the APP under the Agricultural Marketing Programs Act (AMPA) were introduced in Parliament to broaden accessibility for producers, to increase the level of coverage under the programs, and to consolidate the APP and the SCAP into a single program under the AMPA.

Broadening accessibility

Coverage under these programs is currently restricted to field crops, maple syrup, fur, and honey. The proposed amendments would expand coverage to include most agricultural products, including livestock (but not including supply managed products) and other crops (such as blueberries and cranberries), broadening accessibility to these programs to most producers in Canada.



Increasing the level of coverage

The proposed amendments would result in significant increases in
coverage levels. This would allow producers to more adequately
address increases in expenditures that have risen significantly in
the past decade. Specifically,

- the interest-free component of the APP advance loans would increase
from $50,000 to $100,000;
- the overall limits on advances would rise from $250,000 to
$400,000; and
- the emergency cash advance provision will be broadened to cover
additional agricultural products.


Consolidating the programs

Currently, the two programs (APP and SCAP) are administered
separately. While producers and their organizations have indicated
that many elements of the programs worked well, some changes were
needed to address the current challenges faced by producers.

Specifically, these changes involve:

- merging the SCAP into the APP under the AMPA;
- including livestock and most other agricultural products in the
program; and
- increasing the amount of cash advances, including the interest-free
component of those advances.


Contact Information

  • Agriculture and Agri-Food Canada, Ottawa
    Media Relations
    (613) 759-7972
    1-866-345-7972
    or
    Minister Strahl's Office
    Press Secretary
    Jeff Howard
    (613) 759-1059