Prime Minister Stephen Harper has announced changes to the Farm Improvement and Marketing Co-operative Loans Act (FIMCLA), which will expand credit available to individual farmers and co-operatives.
FIMCLA is designed to finance farm improvements and fund the processing, distribution and marketing of farm products. The act currently provides individual farmers with up to 80 per cent financing to a maximum of $250,000 for financing new or used assets. A farmer-owned co-operative can apply for up to $3 million.
In an announcement made May 1 in Edgeley, Saskatchewan, Harper said the new legislation to guarantee an estimated $1 billion in loans over the next five years, most of which will go to farmers and co-operatives that were previously ineligible. Main provisions of the new act will include:
Farmers would be eligible for new loan guarantee limits of up to $500,000, which doubles the current limit of $250,000.
New farmers would be eligible for loans under the Canadian Agricultural Loans Act (CALA). Currently they are not eligible under the FIMCLA.
Agricultural co-operatives with a majority farmer membership (50 per cent plus one farmer members) would be eligible for loans of up to $3 million for the processing, marketing or distribution of farm products. Loans are currently limited to co-operatives owned 100 per cent by farm members.
Loans of up to $500,000 would be available to help inter-generational farmers taking over their family farm. These loans are currently not available under the FIMCLA.
The name of FIMCLA would be changed to CALA to reflect its new focus.
The Canadian Federation reacted positively to the changes. “Providing adequate capital to agricultural co-operatives are difficult, long-term problems,” said CFA President Laurent Pellerin in a release. “But the changes proposed here are a positive first step in tackling this important issue.”