Province of Ontario increasing limits on feeder cattle loan program.
By Andrew Joseph, Farms.com; Image via Beef Farmers of Ontario
The Ontario government has announced it will continue to support the province’s beef sector by doubling the amount of money eligible farmers can borrow through the Feeder Cattle Guarantee Program.
Ontario is home to close to 6,800 beef farms that marketed about 740,000 beef cattle worth $1.27 billion in farm cash receipts (FCR) in 2020. It is the second-largest cattle producer in Canada, accounting for 14 percent of all national cattle production, providing for over 49,000 direct jobs. In 2020, it contributed to $2.5 billion in direct GDP (gross domestic product).
Effective immediately, Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA), stated that loan limits for the Feeder Cattle Loan Guarantee Program will increase from $500,000 to $1-million for experienced individual co-op members, and up to $1.5 million for experienced corporations that participate in feeder cattle co-operatives.
The Feeder Cattle Loan Guarantee Program supports feeder cattle producers by offering short-term loans at below-market rates—based on the strength of a 25 percent loan guarantee by the provincial government.
“Our beef farmers work tirelessly each day producing world-class products and playing a vital role in our food supply chain,” said OMAFRA Minister Lisa Thompson. “These improvements to the Feeder Cattle Loan Guarantee Program build on a series of enhancements our government has put in place to support our beef farmers and the agri-food supply chain. It’s important that we keep listening to the needs of these agri-food heroes and give them the tools they need to help lead our sector.”
It is expected that these improvements will help beef farmers better-manage fluctuating production costs and volatile markets as they work to expand their businesses and ensure the sector retains the knowledge and expertise of experienced farmers.
By providing beef farming businesses access to greater amounts of low-cost capital, the Province also sees it adding to its efforts to support pandemic recovery across the agri-food sector.
The increased loan limits build on a variety of other recent actions to enhance the efficiency of the program for its participating members. These include red tape reductions announced in 2019 in conjunction with changes introduced through the Restoring Ontario's Competitiveness Act.
“The collaborative effort between Minister Thompson and the beef sector to implement improvements to the Ontario Feeder Cattle Loan Guarantee Program is very much appreciated,” expressed Rob Lipsett, President of Beef Farmers of Ontario. “This is an important program that provides affordable and accessible financing options for many younger members who represent the future of our industry. An increase in the loan limits will help ensure financing limits keep pace with the price of cattle and in turn, maintain the program’s relevancy and benefits for Ontario’s cattle feeding sector.”
The Beef Farmers of Ontario is assisting in the delivery of this programming.
“On behalf of the 759 members enrolled in the Ontario Feeder Cattle Loan Guarantee Program, we are grateful for today’s announcement,” said Steve Eby, Chair of the Ontario Feeder Finance Provincial Council. “The increase in loan limits will allow each of our 15 co-ops to continue to attract and maintain members with various sized cattle operations, and also provide an opportunity for expansion utilizing the co-operative structure of the Ontario Feeder Cattle Loan Guarantee Program.”
Ontario’s agricultural loan guarantee programs are industry-delivered, operate with minimal government support and have safeguards to minimize the risk of a guarantee claim.