Alberta beekeepers are eligible to participate in the Advance Payments Program provided by Agriculture and Agri-Food Canada. Producers can receive up to $1 million, with interest on the first $100,000 paid by the federal government, and low interest on the rest.
2019 APP: Corporation/Cooperative/Partnership
2019 APP Application: Individual
The Government of Canada has increased the limits on advances taken under the Advance Payments Program for the 2019 program year. Advances of up to $1 million will be available on all commodities. The first $100,000 will remain interest-free on all commodities, except canola. Canola advances will be eligible for up to $500,000 (total) interest-free.
Learn more: Government of Canada Taking Action for Canada’s Canola Sector
The APP is a federal loan guarantee program which provides agricultural producers with access to low-interest cash advances to help provide marketing flexibility to allow producers to sell their commodity at the most opportune time. Advances are available on over 500 crop and livestock products across Canada.
Producers can access up to $400,000 per program year based on the value of their agricultural product, with the Government of Canada paying the interest on the first $100,000 advanced. APP advances are available through 36 industry associations across Canada. Contact one of our APP Administrators.
On May 1, 2019, the Government of Canada announced its intention to change the program to allow eligible producers with sufficient security may now receive advances of up to $1,000,000. The Government of Canada will continue to pay the interest on the first $100,000 in advances. For the 2019 Program Year only, canola production will benefit from an additional $400,000 interest-free, allowing it to receive $500,000 in total interest-free advances.
The increase to the overall advance limit will provide farms of all sizes an increased opportunity to access additional low cost credit until the producers can market their production.
The increase was established as part of our ongoing consultations with provinces, territories and stakeholders. Canadian canola farmers are currently facing cash flow pressures as a result of market disruptions after China suspended exporting licenses for Canadian canola seed. The increase on the interest-free limit for 2019 provides flexibility to market their commodity at the best time and the best price.
The Advance Payments Program is a federal-only program that is designed to provide cash flow support to Canada’s agricultural producers as they adjust their marketing plans for the upcoming crop year.
Once the new program limits are available to producers, participating producers will be required to sign amendments to their existing 2019 repayment agreement(s) with their APP Administrator(s). Advances that were issued based on the producers’ seeding intentions (60% of the eligible advance amount) will need to be re-calculated by the Administrator.
Once the new program limits are available to producers, producers with existing advances of $100,000 can apply for an additional advance on canola that will be interest-free up to the $500,000 limit. Producers with existing 2019 advances on canola above $100,000 will have to amend their current repayment agreement with the Program Administrator. Once this change is implemented by the Program Administrator, the amount of the advance that falls between $100,000 and $500,000 can become interest-free. Producers will remain responsible for paying the interest on advances above $500,000.
Producers applying for advances over $400,000 may be subject to additional advance (that is, loan) approval procedures . All other producer requirements such as providing proof of Business Risk Management coverage, submitting production reports, reimbursing the advance as the commodity is sold, providing proof of sale and meeting the reimbursement deadlines remain the same.
The interest-free limit for canola is scheduled to return to the $100,000 level under the 2020 program year. A formal program evaluation is currently underway which will consider current program limits, as well as other potential changes to the program.
To be eligible, a producer must be a Canadian Citizen or permanent resident; or a corporation, cooperative or partnership of which the majority interest is held by Canadian citizens or permanent residents. Eligible producers must also be the age of majority in the province where the farm operates; have produced/be producing and own the agricultural product; and be responsible for its marketing.
Producers can apply by contacting one of the 36 APP Administrators across Canada. Their staff will guide producers through the application process.
APP advances are available through 36 industry associations across Canada. Contact one of our APP Administrators.
APP advances are based on the anticipated value of the eligible agricultural products that are either being produced or that are in storage. Producers can receive up to 50% of the expected value of their production.
The advance amounts producers are eligible to receive will be limited by the level of security the producer is able to provide.
APP advances must be secured to ensure a producer will be able to reimburse their advances. In most instances, the security will be one or a combination of the Federal-Provincial Business Risk Management programs (for example, AgriInsurance and AgriStability). Once a commodity is of marketable condition (for example, harvested crop), then the commodity itself can become the security for the advance.
The full advance must be repaid within the production period as noted in the repayment agreement signed with the APP administrator. The production period is 18 months for most agricultural products (24 months for cattle and bison).
Producers must repay their APP advance as they sell the agricultural products on which the advance was made.
APP Administrators sign annual tripartite agreements with their Financial Institution and the Minister of Agriculture, which authorizes them to deliver the program to producers. Once their agreement is signed, APP Administrators become responsible for the day-to-day delivery of the program. They assess a producer’s eligibility, coordinate the application process, determine advance amounts and manage the producer’s file until full repayment, while respecting the terms and conditions of their agreements.
The Federal Government pays the interest on the first $100,000 of the advances. For the 2019 program year, the interest-free portion for canola advances will increase from the first $100,000 to the first $500,000 of the advances. Further, the Government guarantees to the lender (that is, financial institution) the total amounts advanced to the producers, which allows producers to receive advances at a low interest rate. Lastly, the Government provides oversight to help ensure that APP Administrators comply with the requirements of their agreements.
There were approximately 21,000 producers who participated in the program in 2018.
The average advance was approximately $108,000 in 2018.
To learn more, review this fact sheet here or visit Agriculture and Agri-Food Canada’s Advance Payments Program