The federal government is raising the interest-free limit of the Advance Payments Program from $250,000 to $350,000 for the 2023 program year as of May 8, 2023, a news release said. This will be the portion of advances on which the Government of Canada pays the interest for producers.
“Agricultural producers continue to face significant financial challenges including high input costs and rising interest rates. This new increase in the interest-free portion of Advance Payments Program loans will generate savings for our farmers so they can maintain production to sustain their livelihoods,” Marie-Claude Bibeau, Canadian minister of agriculture and agri-food, said in the release.
The release noted under the Advance Payments Program, producers have easy access to cash advances of up to $1 million, based on the expected value of their agricultural product. The program provides flexibility by allowing producers to sell their agricultural products based on market conditions rather than the need for cash.
“We are pleased to see this additional change to the program that will help ensure producers of all sizes of operations and of a variety of commodities can get their growing season off to the right start,” Greg Sears, Alberta Wheat Commission chair, said in a news release.
With the increase producers could save an additional $3,600 in interest costs on average for the year, the release said.