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By Alice McFarlane

Interest free portion of cash advance increases for 2024

Mar 27, 2024 | 10:57 AM

It’s great news for farmers as they prepare for the growing season.

Federal Agriculture and Agri-Food Minister Lawrence MacAulay has announced that the interest-free limit of the Advance Payments Program (APP), commonly known as the cash advance, has been set at $250,000 for the 2024 program year.

The interest free limit was to drop to $100,000 on April 1 but after extensive lobbying by agricultural organizations it will be set at $250,000.

While that is less than the current one-time, $350,000 interest free limit for 2023, agricultural organizations are supporting the announcement.

Canadian Federation of Agriculture President Keith Currie said farming is extremely time-sensitive and farmers must often make purchases for the next growing season before they have been paid for the last.

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“Given the costs facing farmers are only expected to increase, we hope this change can set a new permanent baseline for interest-free advances and that the APP will continue to make adjustments that keep pace with rising farm expenses in the coming years,” Currie said.

The Canadian Cattle Association (CCA) was one of many organizations advocating for the change.

President Nathan Phinney said while CCA requested the limit stay at $350,000, increasing it to $250,000 was still positive for producers across the country.

“The APP is a useful tool for producers and the increased interest-free portion provides welcome relief to keep our sector economically competitive in an unsteady economic environment,” Phinney said. “This sustained increase comes at a time when producers need all economic levers at their disposal.”

Grain Growers of Canada (GGC) said early announcements like this one provide both predictability and stability. GGC Chair Andre Harpe said this will ensure grain farmers and administrators can efficiently plan their financial strategies for the year ahead.

“With the rising cost of inputs and low grain prices at harvest, a higher interest free portion of the APP is needed,” Harpe said.

The Canadian Canola Growers Association (CCGA) is one of 28 organizations that administers the APP on behalf of the federal government.

Dave Gallant is CCGA’s vice president of finance and Advance Payment Program Operations. He said yesterday it was good to have time to make the necessary adjustments before April 1.

“We’re making changes in our system today as we only found out about it at 2 p.m. But we will be making the necessary changes so that we will be in a position to issue the full $250,000 interest free to farmers come April 1,” he said.

Gallant said about 2,700 farmers have already sent in their applications forms to the CCGA, which will be processed on Monday. He estimated another 120 applications are coming in per day.

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