It’s not all the way back to where it was last year, but the interest-free portion of the 2024 federal Advance Payment Program has been raised from its original level.
The federal government announced Monday the interest-free portion of the program has been set at $250,000 for the current year.
Originally fixed at $100,000, the upper limit on the interest-free portion was raised by Agriculture Canada to $250,000 in 2022 and to $350,000 in 2023 due to rising interest rates and input costs. However, the interest-free portion of the program was quietly returned by the government to $100,000 for the 2024 growing season – a move that spurred an outcry among farm organizations that maintained producers still needed the financial break a higher limit would provide.
In a news release today, Ottawa said raising the interest-free portion to $250,000 from $100,000 will save nearly 12,000 participating producers almost $5,000 each in interest costs on average, for a total savings of up to $58.7 million on a nationwide basis.
The Advance Payments Program gives producers easy access to low-cost cash advances of up to $1 million, based on the expected value of their agricultural product.
“With this support at the start of the production cycle, farmers will be able to purchase important inputs to support production this growing season,” the government release said, adding it will also provide marketing flexibility by allowing producers to sell their agricultural products at the most opportune time, rather than just when they need cash.
Under the Advance Payments Program, cash advances are calculated based on up to 50% of the anticipated market value of eligible agricultural products that will be produced or are in storage. The program is delivered through 27 industry-led associations.
