Canadian producers are being offered further credit options to help deal with rapidly and sharply rising input costs ahead of the 2022 growing season.
In a release Friday, Farm Credit Canada said it is offering credit limit increases to crop input financing customers who meet specific pre-approval criteria, ensuring they have access to the capital they need for the upcoming growing season. The federal Crown corporation is also offering a two-year credit line for qualified customers to access up to a maximum of $500,000 to provide customers with additional financial flexibility.
Meanwhile, FCC said it will continue to consider other options, such as debt re-structuring, to support customers in financial difficulty.
Already soaring input costs have shot even higher in recent weeks in response to the Russian invasion of Ukraine.
“We want to ensure producers and food processors have sufficient capital to bridge any cash flow gaps during this time of multiple input cost increases,” said FCC President and CEO Michael Hoffort. “In practical terms, this could mean being able to replenish the fuel tanks before heading out to the field or having the cash flow to hire additional employees to keep the processing plant running at capacity.”
The FCC announcement follows on the heels of last week’s changes to the Advance Payments Program (APP) that federal Agriculture Minister Marie-Claude Bibeau said will put more money into the hands of Canadian producers sooner.
As part of the changes, the government said it will temporarily waive the requirement for pre-production advances to be issued in two installments – 60% upfront and 40% after seeding is confirmed. The change will allow producers to receive 100% of their 2022 advance immediately when they apply. Access to the additional cash is expected to help farmers purchase important inputs, such as fuel, fertilizer and seed, in order to maintain full production this growing season, the government said.
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