Agriculture and Agri-Food Canada

Agriculture and Agri-Food Canada

September 29, 2011 10:30 ET

Harper Government Ensuring Grain Farmers' Access to Advance Payments Program

OTTAWA, ONTARIO--(Marketwire - Sept. 29, 2011) - Agriculture Minister Gerry Ritz announced today that the Advance Payments Program (APP) for Western wheat and barley producers will now be delivered by the Canadian Canola Growers Association (CCGA), who currently administer the program for over 20 other commodities in Western Canada.

"Canada's wheat and barley producers constantly adapt their operations to economic and weather realities and their ability to secure cash flow is an essential part of their business decisions," said Minister Ritz. "Our Government is taking clear and concise action so that wheat, durum, and barley farmers have access to the Advance Payments Program without disruption."

Western grain producers will be able to obtain their APP cash advances for winter wheat directly from the CCGA beginning on October 1. These advances will be for the 2012-13 production period for winter wheat crops planted in 2011. Spring advances on wheat and barley for their 2012-13 production period will also be issued by the CCGA beginning on April 1, 2012. The Canadian Wheat Board (CWB) will finish administering APP advances for the 2011-12 production year only, which includes APP post harvest cash advances this fall.

The CCGA is a national farm organization that has been administering the APP program for more than 30 years. All other crop and livestock sectors receive their APP through farm organizations on behalf of the Government. Today, CCGA issues cash advances on more than 20 commodities in the four western provinces. Their proven track record and experience will provide a seamless transition for wheat, durum and barley producers as well as a reduced paper burden and less administrative fees, as many farmers already work with the CCGA for their canola crop advances. The CCGA offers multiple application methods - online, telephone, fax and mail - which will help producers receive their cash advances more quickly.

"This Government has committed to creating an open market for Western Canadian grain farmers that attracts investment, encourages innovation, creates value-added jobs, and builds a stronger economy," adds David Anderson, Member of Parliament for Cypress Hills-Grasslands and Parliamentary Secretary for the Canadian Wheat Board. "CCGA has the experience and knowledge necessary to administer the program to an expanded producer base and this change will provide farmers with the reassurance that they can continue to access cash advances for their wheat, durum and barley crops."

The APP provides producers with a cash advance on the value of their agricultural products during a specified period. By improving their cash flow throughout the year, the APP helps crop and livestock producers meet their financial obligations and benefit from the best market conditions.

For more information please contact the CCGA at 1-866-745-2256 or online at www.ccga.ca. For more information on APP please visit www.agr.gc.ca.

BACKGROUNDER

ADVANCE PAYMENTS PROGRAM (APP)

PURPOSE

The Advance Payments Program (APP) is funded by the Government of Canada and provides producers with a cash advance on the value of their agricultural products during a specified period. The short term loans improve cash flow throughout the year and help crop and livestock producers meet their financial obligations and market their products when market conditions are favourable.

BACKGROUND

Delivered under the authority of the Agricultural Marketing Programs Act (AMPA), the APP is a federal loan guarantee program that improves the access to credit for eligible producers. The government guarantees repayment of cash advances made to producers for their agricultural product. Producers may use the advance to meet their short-term financial obligations, such as seeding costs and other input purchases, without having to sell their previous year crop to finance their current year production. This allows producers to base their sales decisions on market conditions rather than on their short-term cash flow needs.

The maximum cash advance available to each producer is $400,000. The federal government pays the interest on the first $100,000 of a cash advance issued to a producer per production period and producers have up until the end of the production period to repay their advance. Under the AMPA, the cash advance rate cannot exceed 50% of the average market price that the Minister estimates will be payable to producers of the agricultural product in that area.

The APP is accessed through approximately 60 producer organizations that administer the program through an agreement with Agriculture and Agri-Food Canada and a designated lending institution. On average, the APP Program guarantees approximately $2 billion in advances to 40,000 producers annually. The APP is a long-standing and well received program.

Contact Information

  • Media Relations
    Agriculture and Agri-Food Canada
    Ottawa, Ontario
    613-773-7972
    1-866-345-7972

    Meagan Murdoch
    Director of Communications
    The Office of the Honourable Gerry Ritz
    613-773-1059