Cabinet approved financial relief through reduced interest rates for farmers, saving them millions in interest payments. . Farm FieldsFarm fields .According to Blacklock’s Reporter, the decision was made in response to testimony from the Commons Agriculture committee, which highlighted farmers were not responsible for food inflation..“Canadian producers have been facing higher costs of production brought on by general inflation,” the department of Agriculture wrote in a Regulatory Impact Analysis Statement. .On Wednesday, the department approved a temporary increase of 40% in the maximum amount of interest-free cash advances available to farmers under the Advance Payments Program..“Year over year volatility has created cumulative pressures for farms, most of which are farm families facing inflation of household expenses as well,” said the statement. .“This change will help producers as they weather the continuing financial pressures.”.Under the program, producers can draw cash advances up to $1 million against the year-end sale of crops or livestock. Cabinet raised the interest-free portion of million-dollar advances from $250,000 to $350,000, a 40% increase..The interest holiday would cost taxpayers $11.8 million, by an official estimate. The interest-free loan portion prior to the pandemic was capped at $100,000. The agriculture department estimated that some 19,000 growers and livestock producers draw cash advances each year worth more than $3 billion..On March 20, Ian Boxall, the president of the Agricultural Producers Association of Saskatchewan, testified before the agriculture committee and said farmers should not be held responsible for the increase in food prices..“Farmers are very sensitive to the current environment affecting consumers,” said Boxall, a Tisdale, SK, grain grower.. Farm .“Farmers do not set the price of our products or the price for the inputs we buy to grow them. We are impacted by inflation on both ends when we purchase our farm inputs and when we purchase food.”.In a 2021 audit, the agriculture department found only about 1% of borrowers defaulted on loans in the Advance Payments Program. The audit emphasized the importance of subsidized loans..“Given that agriculture is seasonal, producers require a sufficient supply of cash to manage their operation until they are able to sell their products,” said the Evaluation of the Programs Under the Agricultural Marketing Programs Act..“Approximately half of the surveyed producers, 54%, who took out an advance in 2019 reported believing they would not qualify for a loan of the same size elsewhere,” said the Evaluation. .“For those producers who can access loans elsewhere, the majority felt they would have gotten far less favourable interest rates or repayment terms at financial institutions.”
Cabinet approved financial relief through reduced interest rates for farmers, saving them millions in interest payments. . Farm FieldsFarm fields .According to Blacklock’s Reporter, the decision was made in response to testimony from the Commons Agriculture committee, which highlighted farmers were not responsible for food inflation..“Canadian producers have been facing higher costs of production brought on by general inflation,” the department of Agriculture wrote in a Regulatory Impact Analysis Statement. .On Wednesday, the department approved a temporary increase of 40% in the maximum amount of interest-free cash advances available to farmers under the Advance Payments Program..“Year over year volatility has created cumulative pressures for farms, most of which are farm families facing inflation of household expenses as well,” said the statement. .“This change will help producers as they weather the continuing financial pressures.”.Under the program, producers can draw cash advances up to $1 million against the year-end sale of crops or livestock. Cabinet raised the interest-free portion of million-dollar advances from $250,000 to $350,000, a 40% increase..The interest holiday would cost taxpayers $11.8 million, by an official estimate. The interest-free loan portion prior to the pandemic was capped at $100,000. The agriculture department estimated that some 19,000 growers and livestock producers draw cash advances each year worth more than $3 billion..On March 20, Ian Boxall, the president of the Agricultural Producers Association of Saskatchewan, testified before the agriculture committee and said farmers should not be held responsible for the increase in food prices..“Farmers are very sensitive to the current environment affecting consumers,” said Boxall, a Tisdale, SK, grain grower.. Farm .“Farmers do not set the price of our products or the price for the inputs we buy to grow them. We are impacted by inflation on both ends when we purchase our farm inputs and when we purchase food.”.In a 2021 audit, the agriculture department found only about 1% of borrowers defaulted on loans in the Advance Payments Program. The audit emphasized the importance of subsidized loans..“Given that agriculture is seasonal, producers require a sufficient supply of cash to manage their operation until they are able to sell their products,” said the Evaluation of the Programs Under the Agricultural Marketing Programs Act..“Approximately half of the surveyed producers, 54%, who took out an advance in 2019 reported believing they would not qualify for a loan of the same size elsewhere,” said the Evaluation. .“For those producers who can access loans elsewhere, the majority felt they would have gotten far less favourable interest rates or repayment terms at financial institutions.”