Prime Minister announces $5 billion in additional lending support through FCC for farmers
By Fruit and Vegetable
By Fruit and Vegetable
Prime Minister Justin Trudeau announced Farm Credit Canada (FCC) will receive support from the Canadian government that will allow for an additional $5 billion in lending capacity to producers, agribusinesses, and food processors.
The additional lending capacity is supposed to help farmers facing cashflow issues and processors impacted by lost sales amid the COVID-19 pandemic.
“Farmers and food producers work hard to put food on tables across our country, and they should not have to worry about being able to afford their loan payments or having enough money to support their own families. We are taking action now to give them more flexibility to meet the challenges ahead in these times of uncertainty,” said Prime Minister Trudeau in a released statement.
“If you are a producer concerned about having the cash flow required to plant your crop, or you are a food processor feeling the impact of a lost sale due to the financial downturn, FCC is here to support you in these uncertain economic times,” said Michael Hoffort, FCC president and CEO, in a released statement. “It’s in times like these that we are reminded how important Canadian producers and food processors are to our nation and to feeding the world.”
Hoffort adds that FCC will use its resources to find solutions that offer the best chance for recovery going forward. Initially, the focus will be on assisting the industry in addressing cash flow challenges so that businesses can remain focused on business-critical functions rather than worrying about how to access funds to keep operating through this difficult time.
FCC also asks existing customers who have cash flow or other financial concerns to contact the organization to discuss alternatives, such as loan payment deferrals and products available to assist with cash flow needs.
“Each business’ financial situation is unique, so there may be a combination of options considered,” Hoffort said. “The bottom line is that FCC is being supported by our shareholder to play a bigger role in supporting the success of the Canadian agriculture and food industry across Canada. The sooner we can discuss potential challenges, the more options we have.”
In addition, all eligible farmers who have an outstanding Advance Payments Program (APP) loan due on or before April 30 will receive a “stay of default,” allowing them an additional six months to repay the loan. This added measure represents $173 million in deferred loans.
In addition, all eligible farmers who have an outstanding Advance Payments Program (APP) loan due on or before April 30 will receive a “stay of default,” allowing them an additional six months to repay the loan.
The stay of default measure will also provide farmers the flexibility they need to manage their cashflow when facing lower prices or reduced marketing opportunities. Applicable farmers who still have interest-free loans outstanding will have the opportunity to apply for an additional $100,000 interest-free portion for 2020-2021, as long as their total APP advances remain under the $1 million cap.
For potted plant producers, grains, oilseeds, and pulse producers who participated in the 2018 stay of default announced in the summer of 2019, they are encouraged to contact their administrator for more details. Potted plant, cattle, bison, and flower producers should also contact their APP administrator to enquire about their eligibility for the stay of default measure.
In the provided update, the new deadlines for outstanding Advance Payments Program loans are as follows:
- Sept. 30, 2020: 2018 cash advances for grains, oilseeds, and pulses.
- Sept. 30, 2020: 2018 cash advances for cattle and bison.
- Oct. 31, 2020: 2019 cash advances on flowers and potted plants.
The Advance Payments Program is a financial loan guarantee program that provides producers easy access to credit through cash advances. For the 2019 program year, there are over 21,000 producers participating and over $3 billion in advances.