Advance payment program widened, streamlined

More types of livestock will be eligible and more types of security will be allowed for Canadian farmers to get federally-backed advance payments starting this year.

Amendments to the Agricultural Marketing Programs Act (AMPA), made last February as part of the former Conservative government’s omnibus Agricultural Growth Act, have made regulatory changes possible for the 2016 Advance Payments Program (APP) year, the government said Friday.

The regulatory changes allow new commodities, including “specific classes” of breeding livestock — including cattle, hogs, sheep and goats — to qualify for advances this year if the animals are intended for sale during the production period, the government said.

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Except where regulations are made to allow specific types or classes, the AMPA rules out current and former breeding animals as “agricultural products” for the purposes of the APP.

The changes made via the Agricultural Growth Act also allowed for “limited expansion” of the APP into other eligible commodities and products via regulation in the future. The Tories last summer had proposed regulations allowing APP coverage for breeding cattle and hogs as well as rabbit, red deer, boar, elk and products such as antler velvet and bees.

The regulatory changes announced Friday also now allow producers seeking advances under the APP to now use more types of security, such as private insurance or other risk management products, to get the maximum available to them.

Previously, APP loans have been limited to the dollar value of a farmer’s coverage under federal/provincial business risk management (BRM) programs such as AgriStability and AgriInsurance.

The change is meant to help farmers who under that rule couldn’t get their full eligible advance, due to “shortfalls in their pledged security,” but are able to buy other insurance that covers risks similar to those covered by the BRM programs.

The maximum advance available through the APP remains 50 per cent of the average market price for a given product in a farmer’s area, up to $400,000. The federal government pays the interest on the first $100,000.

The government on Friday also pledged “simplified access” to APPs for companies with multiple shareholders.

Third-party guarantors, such as individuals or banks, are to be allowed to post guarantees for larger corporations, co-operatives or subsidiary companies, instead of each individual in the organization having to provide a personal guarantee.

The changes for 2016 also include a new “streamlined” application process that’s meant to reduce paperwork for returning APP clients, the government said.

“These changes to the (APP) will mean improved cash flow for farmers, helping them meet their financial obligations, while at the same time reducing their paper burden,” Agriculture Minister Lawrence MacAulay said in Friday’s release.

The APP program year begins in April. — AGCanada.com Network

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