Minister MacAulay raises interest-free limit of the Advance Payments Program to $250,000 for 2024
OTTAWA, ON, March 25, 2024 /CNW/ - Today, the Honourable Lawrence MacAulay, Minister of Agriculture and Agri-Food, announced that the interest-free limit of the Advance Payments Program has been set at $250,000 for the 2024 program year. This is the portion of advances on which the Government of Canada pays the interest on behalf of producers.
Canadian producers have faced significant challenges, including elevated input prices and interest rates, which have impacted their cash flow. As farm operating costs remain uncertain heading into the 2024 crop year, this change will save approximately 11,950 participating producers an additional $4,916 in interest costs on average, for a total savings of up to $58.7 million.
The Advance Payments Program gives producers easy access to low-cost cash advances of up to $1 million, based on the expected value of their agricultural product. Under the program, producers normally receive the first $100,000 interest-free. The higher limit announced today will give producers access to additional cash flow and interest savings to help cover costs until they sell their products.
With this support at the start of the production cycle, farmers will be able to purchase important inputs to support production this growing season. The program also provides some marketing flexibility by allowing producers to sell their agricultural products at the most opportune time rather than the need for cash. The Government of Canada remains committed to helping producers manage financial challenges so they can continue driving the economy while feeding Canadians and the world.
"In the face of so many challenges, our hardworking producers continue to show their resilience and produce top-quality products for Canadians, and the world. Increasing the interest-free portion of the Advance Payments Program means improved cash flow and savings for farmers as we head into the 2024 planting season."
- The Honourable Lawrence MacAulay, Minister of Agriculture and Agri-Food
- Under the Advance Payments Program, cash advances are calculated based on up to 50% of the anticipated market value of eligible agricultural products that will be produced or are in storage. The program is delivered through 27 industry-led associations.
- Advances are available on over 500 crop and livestock products across Canada.
- In 2022, due to exceptional circumstances, the Government of Canada increased the interest-free portion of the Advance Payments Program from $100,000 to $250,000 for the 2022 and 2023 program years. As pressures compounded in 2023, the limit was further increased from $250,000 to $350,000 for the 2023 program year.
- Producers have access to a suite of business risk management (BRM) programs to help them manage significant risks that threaten the viability of their farms and are beyond their capacity to manage. The suite includes the core programs of AgriStability, AgriInsurance and AgriInvest.
- BRM programs are often the first line of support for producers facing disasters. Farmers are encouraged to make use of these programs to protect their farming operation.
Follow us on Twitter, Facebook, Instagram, and LinkedIn
Web: Agriculture and Agri-Food Canada
SOURCE Agriculture and Agri-Food Canada
News published on and distributed by:
