(file photo/Government of Saskatchewan)

By Alice McFarlane

Advance Payments Program

Interest-free limit of the Advance Payments Program increased

May 10, 2023 | 12:17 PM

The federal government is making a change to the Advance Payments Program (APP) that will save farmers money.

Agriculture and Agri-Food Minister Marie-Claude Bibeau said the interest-free limit has been increased from $250,000 to $350,000 for the 2023 program year, effective May 8.

This is the portion of advances that the federal government pays the interest on behalf of producers.

Bibeau said agricultural producers continue to face significant financial challenges including high input costs and rising interest rates.

“This new increase in the interest-free portion of APP loans will generate savings for our farmers so they can maintain production to sustain their livelihoods,” Bibeau said in a news release.

Agriculture Roundup

Agriculture Roundup for Wednesday, October 30, 2024

Oct 30, 2024

organic crop

Wild rice production plummets compared to 2023

Oct 23, 2024

Connecting Farmers to Available Land

Young Agrarians to host Land Linking Workshop in Kelowna

Oct 16, 2024

Under the program, producers have access to cash advances of up to $1 million, based on the expected value of their agricultural product. The program can also provide some flexibility by allowing producers to sell their agricultural products based on market conditions rather than the need for cash.

Last year, the Trudeau Government increased the interest-free limit from $100,000 to $250,000 for the 2022 and 2023 program years, saving producers an average of $8,600 over the two years. The further increase means producers have access to additional cash flow and more interest savings to help cover costs until they can sell their products.

By increasing the interest-free limit to $350,000 for 2023, eligible participating producers could save an additional $3,600 in interest costs on average for the year.

The cash advances are calculated based on up to 50 per cent of the anticipated market value of the eligible agricultural products that will be produced or are in storage.

The program is delivered through 30 industry-led associations.

–

alice.mcfarlane@pattisonmedia.com

On Twitter: @farmnewsNOW