Glacier FarmMedia COVID-19 & the Farm

Grain growers get extension on 2018 APP repayment

Eligible crop producers granted a six-month stay of default

(Photo courtesy Canola Council of Canada)

Grain, oilseed and pulse crop growers who took out cash advances from the Advance Payments Program for the 2018-19 crop year will get an extra six months to repay, effective Friday.

Federal Agriculture Minister Marie-Claude Bibeau on Thursday announced a six-month stay of default for APP advances on grains, oilseeds and pulses, to March 31, 2020 from the original deadline of Sept. 30, 2019.

The stay, effective Aug. 15, was granted “at the request of nine program administrators” to provide “additional flexibility to repay advances for farmers that may be facing lower prices, reduced marketing opportunities or a decrease in farm cash income,” the federal government said in a release.

The 2018 APP’s interest-free benefit will be maintained on the interest-free portion of farmers’ outstanding advances until March 31 next year for eligible commodities, the government added.

Also effective Friday, farmers who are eligible for this stay will be able to make a cash repayment on a 2018-19 advance without providing proof-of-sale documentation or facing cash repayment penalties, according to the Canadian Canola Growers Association, one of the nine administrators involved.

That said, all other terms and conditions around the 2018-19 APP are still in effect, the CCGA noted. Repayments on advances must be made every time a farmer sells a commodity associated with that advance — and that includes any advances eligible for the stay of default.

Also, the CCGA noted, any 2018 advances that include an interest-bearing portion “will continue to accrue interest throughout the extension.”

Over 21,000 producers took part in the APP in 2018, with an average advance of about $118,000, the government said. That includes 12,902 grains, oilseed and pulse producers, up three per cent from 2017.

In all, the government said, over $1.68 billion were taken in APP advances on grains, oilseeds and pulses for 2018, up six per cent from 2017.

As of July 31 this year, the government said, almost 1,100 new producers have joined the APP for 2019 and about 360 have returned to it after not taking part in the last three years.

Give the “current market turmoil,” Bibeau said in the government’s release, “this stay of default will give them more flexibility and the room to maneuver so they can better manage their liquidity.”

Said turmoil has included trade barriers for exports of Canadian grains, oilseeds and/or pulses in recent months and years in markets including China as well as India, Italy and Saudi Arabia.

“International grain trade issues have impacted marketing plans, and we’ve heard from many farmers asking for additional time to repay their advance,” CCGA CEO Rick White said in the association’s release.

“There are fewer marketing options for selling and prices have declined, which makes it difficult for farmers to sell their crops at a profit.”

Producers who got APP advances for 2018 from any of the nine participating administrators can contact their respective administrator for details, the government said.

Along with the CCGA, those include the Agri-Commodity Management Association, Alberta Sugar Beet Growers, Alberta Wheat Commission, B.C. Breeder and Feeder Association, Manitoba Corn Growers Association, Manitoba Livestock Cash Advance Inc., Producteurs de Grains du Quebec and Western Cash Advance Program Inc. — Glacier FarmMedia Network

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