OTTAWA, ONTARIO – The Government of Canada has changed the advance payments program to support farmers ahead of the season.

Due to major circumstances in the world and at home, such as drought, the global pandemic and the war in Ukraine, supply chains have been disrupted and input costs have increased for everything from fuel to fertilizer.

B.C.’s Minister of Agriculture Marie-Claude Bibeau announced Wednesday that the program will temporarily waive the requirement for pre-production advances being given in two payments, 60 per cent upfront and 40 per cent after seeding is confirmed. This change allows farmers to receive 100 per cent of the advance immediately when they apply.

Recently in the Peace region, Jordan Kealy of Kealy Farm spoke out about rising costs, saying prices of fuel, fertilizer, and seed will “kill a lot of small farms.”

“We’re starting to see more and more farmers just selling out because their land is now more worthwhile, and the property taxes are getting higher. And you get these big corporations that are taking over and lobbying the government. They’re the ones that own so many different parts of the chain, and they can fix these prices,” said Kealy.

Malcolm Odermatt, a Baldonnel farmer and president of the BC Grain Producers, also raised concerns about rising gas prices.

“We don’t have alternatives right now. It doesn’t matter how much money you want to spend on combines, swathers, a sprayer, the only engine option is a big internal combustion diesel engine,” said Odermatt.

“I’d be excited for the day when we can burn hydrogen instead of diesel on this farm, but right now, that’s our only energy source, and it’s being taxed.”

In this program, farmers are given access to affordable credit through cash advances of up to $1 million based on up to 50 per cent of the expected value of their product. The first $100,000 of the advance each year is interest-free.

According to the federal government, if farmers are given access to this cash flow at the beginning of the season, it gives them the ability to purchase the inputs needed to start the production, such as fuel for farm equipment, fertilizer and seed, also helping with maintenance throughout the season.

The government says that since the pressure on world food supplies is increasing due to the conflict in Ukraine, “Canada is prepared to help fill that gap in world production.”

In December 2021, Farm Credit Canada offered a credit limit increase of 30 per cent for crop input financing to farmers that met specific pre-approval criteria.

In 2021, this program provided $2.39 billion in advances to 17,430 producers across Canada.

“Canada’s agricultural producers are facing an increase in the cost of raw materials, including fuel and fertilizer, a situation exacerbated by Russia’s invasion of Ukraine. In these uncertain times, it is more important than ever that our farmers are able to maximize their production to feed Canadians and the world,” said Bibeau.

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