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Archived - Advance Payments Program improved under the Agricultural Growth Act

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March 30, 2015 – Saskatoon, Saskatchewan – Agriculture and Agri-Food Canada

The Advance Payments Program (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 for eligible producers of agricultural products by improving their cash-flow. APP guarantees the repayment of cash advances issued to producers against their agricultural product(s).

Advances provide up to 50% 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 sixty producer organizations across the country deliver cash advances under the APP.

The Agricultural Growth Act (Bill C-18) introduced changes to the Agricultural Marketing Programs Act (AMPA) to improve and streamline administration of the APP, provide greater flexibility and more repayment options, and ease access to APP advances. Many of the changes to the APP will be in place for April 1st, 2015. However, a number of the changes cannot be implemented until amendments to the related regulations are completed.

What's New for 2015

  • Producers can receive advances for all commodities through one application with a single administrator;
  • No requirement for a producer to be principally occupied in farming;
  • A repayment schedule in line with the perishable date of non-storable products thereby avoiding the need for proof of sale;
  • Repayment of advances can be made without proof of sale without penalty:
    • 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.

Improvements Targeted for 2016

The new Agricultural Growth Act also allows for future improvements to be made through regulations, targeted for 2016:

  • New commodities to be eligible for advances, including specific classes of breeding animals intended for market;
  • A new streamlined application process will reduce paper burden and treat farmers like returning clients;
  • More options for producers to secure an APP advance;
  • Additional flexibility for allowable repayment methods;
  • Streamlined approach to obtaining guarantees for companies with many members.

Farm Debt Mediation Services

The Agricultural Growth Act also introduced changes to the Farm Debt Mediation Act which will streamline interaction between the APP and Farm Debt Mediation Services to ensure all necessary parties are involved in a mediation process. For producers this means the right people at the table to negotiate repayment arrangements, making it easier for producers to resolve their situation.

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