GUELPH – The Ontario Federation of Agriculture (OFA) is pleased to see an increase to the interest-free limit under the Advanced Payments Program that’s expected to be included in the 2024 federal budget, states an OFA press release.
Officials called the news is a “victory” and “welcome relief” to farmers across the country.
“The Advanced Payments Program is an important tool in the toolbox for farmers across the country to access short-term financing for their farm business,” OFA president Drew Spoelstra stated.
“We are at a critical point in time with high costs of production, inflation, elevated interest rates and falling commodity prices, and we’re grateful for the Government of Canada’s response by increasing the interest-free portion of the APP to $250,000.”
The federal government temporarily increased the interest-free limit of the program from $100,000 to $250,000 in 2022 and then to $350,000 in 2023.
The increase in interest-free loans was pivotal in helping farmers manage cash flow for purchasing critical inputs such as feed, seed and fertilizer, according to the OFA.
The interest-free limit was set to revert back to $100,000 for the 2024 production year.
The March 25 increase to the interest-free portion of the APP from $100,000 to $250,000, is expected to save participating producers an additional $4,916 in interest costs on average.
“As farmers head into the spring of 2024, increased financial support in the APP is a vital resource they can utilize to better support their farm businesses throughout the growing season,” Spoelstra explained.
According to the release, the OFA has advocated that temporary increases to the interest-free portion become permanent fixtures of the program.
“We have written to the Hon. Chrystia Freeland, Minister of Finance of Canada on multiple occasions and as recently as February 9, 2024, and for the past two years, one of our top asks in your pre-budget submissions was to permanently increase the interest-free portion of APP loans,” states the release.
The OFA also submitted a resolution to the Canadian Federation of Agriculture in 2023 to lobby to make these temporary increases permanent and OFA board members spoke to the issue again at CFA’s 2024 annual meeting, according to the release.
The program has played a crucial role in helping farmers navigate cash flow challenges, inflation, rising interest rates, and geopolitical pressures over the past several years—issues which remain, the OFA says.
According to the OFA, farmers overwhelmingly believe farm input costs are the issue this year, speaking to the importance of the program announcement.
