Federally-underwritten cash advances that were available to Prairie wheat and barley growers through the Canadian Wheat Board will soon be handled by the Canadian Canola Growers Association.
The CCGA will “expand its administration capacity” under the federal Advance Payments Program (APP) starting Oct. 1 this year to including issuing APP cheques for winter wheat, to be followed by spring wheat, durum and barley starting April 1, 2012.
The CCGA, which already handles APP administration for over 20 different crop commodities in all four western provinces, will handle Prairie wheat and barley starting with the 2012-13 APP production period.
Farmers will continue to have access to the APP “without disruption,” the association said.
The association said Thursday it will “immediately” start preparations for its expanded program, including hiring additional personnel, expanding its cash advance call centre, and making “physical improvements” at the CCGA’s Winnipeg office.
Eligible farmers will be able to submit APP applications to the CCGA by phone (toll-free 1-866-745-2256), fax (204-788-0039) or mail, online, through a local elevator, or in person at CCGA’s office.
By combining more commodities under one administrator, the association noted, “many farmers will receive their cash advance with one application form and one administration fee, saving them time and money.”
The CCGA charges an administration fee of $150 per APP application, whereas the CWB’s administration fee at the grain elevator has been $75 for cash advances under $100,000, or $200 for larger advances. About 40 per cent of eligible producers currently receive APP payments through both organizations, the federal government said in a separate release.
The CCGA also takes a holdback of three per cent on all advances, which is either applied to the “administrator’s liability” if a farmer is declared in default, or returned once the farmer’s advance is repaid in full.
The CCGA also charges an additional $75 application processing fee in cases where a farmer who has an existing 2012-13 advance, then applies for a cash advance on additional commodities during the same APP production period.
The cash advance program for winter wheat and fall rye is a 24-month program; for spring wheat, barley, durum and other spring-seeded crops, the APP is 18 months. Therefore, any 2012-13 cash advances on spring wheat, durum, barley or winter wheat must all be paid in full by Sept. 30, 2013.
The government on Thursday said it doesn’t expect this change to affect the CWB in any “significant” way.
APP delivery “is not considered part of the CWB’s core business, nor is it a significant source of revenue for the CWB,” the government said.
The CCGA, in all four western provinces, already handles APP administration on canola, flax, rye, oats, mustard, canary seed, triticale, buckwheat, oilseed hemp and export grades of timothy hay.
In British Columbia, outside the CWB’s designated area, the CCGA handles APP payments on non-board wheat, non-board barley and non-board durum. In Alberta and Saskatchewan the association also handles the APP for lentils, kabuli and desi chickpeas, peas, pinto beans, soybeans, white beans, fababeans and other coloured beans.
Under the APP, eligible producers can qualify for up to a maximum of $400,000 with the first $100,000 interest-free. The interest-free provision and maximum advance is cumulative over all APP administrators, such as the CCGA, Canadian Livestock Advance Association or Manitoba Corn Growers Association.
A federally-appointed working group, advising Agriculture Minister Gerry Ritz on legislative changes needed in the wake of deregulation of the CWB’s single marketing desk next year, had urged Ritz this week to continue the APP for wheat and barley “with no disruption to farmers during the transition.”
One farmer group on Thursday described the government’s announcement as “hypocrisy” on the CWB file. National Farmers Union president Terry Boehm said there was “no reason why the CWB could not have continued to administer the APP. If the government really believed that a voluntary CWB was actually viable, it wouldn’t have made this change.”