The Agricultural Financial Services Corporation is upping the amount of money it will loan producers.
The move comes after a two-year review that included public consultation and meetings with producers and industry groups.
“The review found that there is strong need for AFSC’s financial support across Alberta aimed at encouraging rural development and meeting the needs of producers in today’s changing environment,” said Jennifer Wood, chair of the provincial Crown corporation.
In January, Agriculture Minister Oneil Carlier approved a new lending mandate focused on new entrants to farming, and producers wanting to expand their operations. Lending rules for agri-food processing and agri-food businesses have also been revamped.
“The new lending mandate focuses on supporting startups, scale-ups and intergenerational succession within the agricultural value chain and across rural Alberta,” said Wood.
As a result, the maximum lending limit for individual loans has been increased to $15 million (up from $5 million previously).
The increase was needed, in part, because of rising land prices, which have being going up by about 10 per cent annually during the last five years.
The organization has established five lending programs in the agricultural sector and one for small and medium-size businesses in rural areas.
One is a new lending program for young and new farmers.
“The Next Generation Loan Program is flexible and it’s a source of financing for new producers to establish their own operation,” said Wood. “In addition, there’s a young producer incentive, which provides borrowers with a one per cent interest rate reduction to lower the initial cost of financing.”
The corporation has also designed two long-term financing operations, which provide agriculture producers with fixed rate loans. Both the Developing Producer Loan Program and the Alberta Producer Loan Program also offer increased flexibility and more time for repayment.