The federal government has promised farmers help amid the covid-19 pandemic, but some agriculture groups say the aid will only serve to increase debt loads.
In an announcement Monday, Ottawa said it would provide an additional $5 billion in lending capacity for Farm Credit Canada. Additionally, the government said all eligible farmers who have an outstanding Advance Payments Program (APP) loan due on or before April 30 will be given more time to repay.
However, Grain Farmers of Ontario (GFO) called the measures only, a ‘first step.’
“A loan program can only be the first step in support from the government for Ontario’s grain farmers, who are already carrying large amounts of debt. More debt is not the answer and will not help farmers continue to have viable businesses and maintain food production,” said GFO chair Markus Haerle.
That sentiment was echoed by Grain Growers of Canada executive director Erin Gowriluk, who continued to advocate for more comprehensive business risk management programs for farmers. “The bottom line is that farmers need tools to succeed – not the freedom to drown in debt.”
Among other requests, GFO said it is asking governments to increase the AgriStability trigger to 85% for 2019-20 program year and for the remainder of Canadian Agricultural Partnership, as well as the remove of the cap on the Risk Management Program and fund it at 100%, giving farmers the security they need to invest in seed, fertilizer and other inputs.
“Extraordinary times call for extraordinary measures. Our provincial and federal government need to move quickly on these asks. We need to stabilize the agri-food economy and industry and ensure our food system’s functionality,” Haerle added.
In a tele-conference Monday afternoon, Agriculture Minister Marie Bibeau said the government aid should assist with farmer cash flow, something she maintained the industry was seeking.
According to Statistics Canada, nationwide cumulative farm debt increased 8% to over $106 billion in 2018. Meanwhile, 2018 debt interest expenses soared almost 20%, the largest percentage increase since 1981.
Source: DePutter Publishing Ltd.
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