OTTAWA — Farm Credit Canada is getting support from the federal government that will boost its lending capacity by $5 billion to help farmers and food processors cope with the COVID-19 pandemic.
The federal government says the change will give flexibility to farmers who face cash flow problems and help processors that have lost sales.
The government says eligible farmers who have a loan due under the Advance Payments Program on or before April 30 will also get an additional six months to repay the loan.
The government says that represents $173 million in deferred loans.
Farmers who have outstanding interest-free loans will be able to apply for an additional $100,000 interest-free portion in financing for 2020-21, as long as their total advances under the Advance Payments Program remain under a $1 million cap.
Prime Minister Justin Trudeau says helping farmers and producers is important for the country.
“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,” he said in a statement.
“We are taking action now to give them more flexibility to meet the challenges ahead in these times of uncertainty.”
Agriculture Minister Marie-Claude Bibeau said farmers are continuing to supply food for grocery stores.
“Their continued work is essential to our plan to manage COVID-19,” she said in the news release.
The Advance Payments Program is a financial loan guarantee program that provides producers access to credit through cash advances. More than 21,000 producers participated in the program in 2019 and received more than $3 billion, the federal government says.
Farm Credit Canada is a Crown corporation that operates a loan portfolio of more than $38 billion, giving farmers and food businesses financing, management software and information to help their operations.
The Canadian Federation of Agriculture also applauded the government for clarifying travel restrictions that would have affected temporary foreign workers arriving in the country to help with the planting season.
“Farmers are pleased to see the government respond so promptly to the looming shortage of agri-food workers and we are committed to working with all the appropriate agencies and departments to ensure their entry maintains strict public health protocols to prevent further spread of COVID-19,” said federation president Mary Robinson.
“We are still reviewing the details and will be in close contact with all relevant departments and industry stakeholders over the coming days to ensure these workers arrive safely and on time.”
This report by The Canadian Press was first published March 23, 2020.
The Canadian Press