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By Alice McFarlane

2023 Cash Advance Program

Applications are being accepted for the Advance Payment Program

Feb 10, 2023 | 11:48 AM

MELFORT, Sask. – Farmers in Western Canada can now apply for the 2023 Advance Payments Program (APP) through Canadian Canola Growers Association (CCGA).

The program, commonly known as the cash advance, is used by many farmers to cover the working capital requirements of putting in the new crop.

CCGA Director of Finance and Operations Dave Gallant said a $250,000 interest-free limit is in effect for this year.

“With rising interest rates, the savings a farmer can realize from using the advance program are more significant than ever, taking into consideration the interest-free component and the interest-bearing rate,” Gallant said.

This year’s program will be similar to last year’s in several ways. The increased $250,000 interest-free component continues for 2023, and CCGA’s interest rate will remain at prime less 0.75 per cent on up to an additional $750,000, according to Gallant.

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“Prime is 6.7 per cent right now so that means our rate on the interest bearing is 5.95 per cent,” he said. “Just to give you an example, a farmer who borrows a half a million dollars into the program will save approximately $21,000 if they use the cash advance over borrowing from their local bank or their credit union.”

There are no limits to how a farmer can put an advance to work on their farm, including financing spring inputs, investing in farm improvements or repairs, or general operating costs. Farmers can apply on over 50 commodities including field crops, large and small livestock, honey, and organic commodities.

Gallant said rates for many individual commodities are higher than last year.

“For instance, canola is up $34 a tonne, wheat is up $29 a tonne. Some of the smaller products are down a little bit but overall, there’s a slight increase in the rates so farmers can still get more money this year than last year for the same basket of commodities when they apply,” he said.

Gallant expects another busy year for APP. He said there was a lot of interest in the 2022 program through the CCGA.

“We did over 9,000 advances last year, and we saw a steep increase in the value of advances,” Gallant said. “Farmers took almost 40 per cent more than the prior years and we’ll finish the year issuing almost $2.3 billion to farmers in Western Canada.”

The process for applying has been improved. Gallant said farmers will benefit from several changes that will make the process easier. CCGA’s new online document submission feature simplifies several reporting requirements.

CCGA has also streamlined the priority agreement process, which should make applying for a cash advance through CCGA faster for many customers.

Gallant said farmers should submit their paperwork early to maximize the benefits from their cash advance

“We encourage first time applicants to apply through our contact center,” he said. “Our team is specially trained to walk new applicants through every step of the process, and for many applicants, it only takes 15 to 20 minutes.”

Returning customers can use the self-serve options available from their online account or can also apply through CCGA’s contact centre.

Farmers wanting to learn more about cash advances offered through CCGA can call 1-866-745-2256 or visit CCGA’s website.

Gallant said this is the last year for the $250,000 interest-free. That amount will go back to $100,000 for the 2024 program.

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alice.mcfarlane@pattisonmedia.com

On Twitter: @farmnewsNOW