Home electronic fund Changes to cash advances to improve cash flow for canola growers

Changes to cash advances to improve cash flow for canola growers

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A host of changes to the cash advance program aim to address market losses for canola growers, but some frustrated farmers say it’s just a band-aid, not a solution.

For 2019, the maximum cash advance – loans given to farmers against growing or stored crops and livestock – will be $ 1 million instead of $ 400,000, Agriculture Minister Marie-Claude Bibeau announced. in Ottawa on May 1.

The interest-free portion on loans for non-canola products remains at $ 100,000. However, $ 500,000 is the new interest-free maximum on canola loans.

Why is this important: Canola growers say they need cash to make up for lost Chinese canola market.

A farmer, with enough non-canola produce, can borrow $ 100,000 without interest, plus $ 400,000 without interest on canola for a total of $ 500,000, said Rick White, CEO of the Canadian Producers Association. canola (CCGA), in an interview on May 2.

If farmers have enough canola, they can get an interest-free loan of up to $ 500,000, he added.

The interest rate on loans above the interest-free portion is the prime rate minus 0.5 percent.

A farmer with an average canola yield of 38 bushels an acre would need 2,545 acres of canola to get the maximum interest-free loan of $ 500,000, a CCGA official said.

Federal response for canola growers.

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Source: Canadian Canola Producers Association Photos: Getty Images

(For each tonne of canola stored, an eligible farmer can borrow $ 227.95 under the Advance Payments Program. The loan is repaid when farmers sell the commodities for which the loan was made.)

Ottawa should have returned the entire loan interest-free, farmer Ian Steppler in Deerwood, Man., Said via email on May 3.

“(C) his disruption of the canola trade will have a phased impact on all products,” he wrote.

Steppler also accused the government of misleading the public into believing that the changes to cash advances were the solution to the farmers’ problem.

“It isn’t,” Steppler wrote. “This is why the farmers are so upset.

“I am not against the possibility of accessing the money. That’s good, and the uninteresting portion is good. But we can’t solve an income problem by lending more money. It just makes me angrier and things like that (that) help show how out of touch the government is with producers’ obligations. “

The changes are what farm groups, including the Keystone Agricultural Producers (KAP) and the Canadian Canola Growers Association (CCGA), have called for.

“We certainly recognize that this is not the answer, but it is a big help with the cash flow that you will be facing on your farm in the future, so we appreciate it,” White said, noting that the program was originally created so that farmers did not have to sell when prices were low.

Saskatchewan Premier Scott Moe also praised the federal government for “supporting our canola growers,” the Regina Chief Position reported.

Trade Diversification Minister Jim Carr thanked Moe, noting that the relationship between the Government of Canada and the governments of Manitoba and Saskatchewan “… is not exactly what you would call harmonious”.

“But Premier Moe understands this is a national issue and he understands that we are much stronger together,” Carr said.

Farm groups including KAP, the CCGA and the Canadian Federation of Agriculture have welcomed the changes.

The Western Canadian Wheat Growers have said that instead of loans, the government should have restored access to the Chinese canola market.

“Farmers are used to managing the risks associated with factors beyond their control such as weather conditions,” the wheat growers said in a press release. “Factors such as commercial markets and political interference should be under the control of our government. “

In addition to mismanagement of trade with China, wheat producers accuse Ottawa of blocking imports of Canadian durum wheat from Italy, India of blocking imports of Canadian pulses, Vietnam of blocking imports Canadian wheat and Peru considering doing the same.

However, spokespersons for the trade organization representing these crops do not blame Ottawa.

“This question is not an easy one,” Canola Council of Canada president Jim Everson said on May 2 in an interview. “This is changing due to the current political friction between countries, so I would say industry and government are making very significant efforts to resolve this issue.”

When Pulse Canada CEO Gord Bacon was asked about the matter, he noted that trade issues with India went beyond Canada.

Gordon Bacon.

Photo:
Provided

“India’s policy of import levies, quantitative restrictions apply to all countries, not just Canada,” Bacon said. “When it comes to fumigation, Canada is treated the same as every country in the world except the United States.”

He added that Canada does not “… have the same weight in trade or political relations…” with India as the United States.

“I see no evidence to suggest that the policy India has applied to all countries is in any way tied to the Government of Canada,” Bacon said.

In an interview on May 2, Cereals Canada President Cam Dahl said, “We’re just in this new protectionist environment, so I don’t think it’s coming because of what Canada is doing. This applies whether we are talking about Vietnam, Peru or Italy.

However, Dahl noted that Cereals Canada has asked Ottawa to file a WTO complaint against Italy for blocking imports of Canadian durum wheat.

“We continue to have these discussions with the Government of Canada, but it’s not that we haven’t had support, especially at the official level,” said Dahl. “We have a fantastic position in Italy. Up to the ambassadorial level is really committed to the durum wheat file.

He noted that groups like his must be non-partisan and represent farmers.

“If a Conservative government did something wrong, we would speak out against it,” Dahl said. “If a Liberal government did something wrong, we would do the same.


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