The Spring Credit Advance Program

March 6, 2001

Responding to a request by producer groups due to rising fuel and fertilizer costs, our government announced today that we have more than doubled the amount available in interest-free loans under the Spring Credit Advance Program, raising the maximum loan from $20,000 to $50,000 for the 2001 growing season.

This represents an increase of $350 million in the budget of this program, so that up to $700 million in interest-free loans could be issued to farmers this spring – providing timely and flexible low-cost financing that is very easy for them to access.

This builds on the $500 million in emergency assistance announced last week to help farmers address the financial challenges they are facing. Should the provinces contribute their traditional 40 per-cent share, this investment would amount to an additional $830 million for Canadian farmers, bringing the total federal-provincial support for Canadian farmers comes to more than $2.6 billion this year.

The Spring Credit Advance Program – a program that Canadian farmers have asked for and made use of in the past – has been very successful in getting money into farmers’ hands in time for spring seeding.

In 2000, the first year of the program, 31,000 producers received $356 million in advances through their producer organizations to assist with financing their spring input costs.

The federal government guarantees the repayment of these advances and pays the interest while they are outstanding. Participating farmers have to take part in the crop insurance program or in another form or security that provides similar protection.

Program applications will be available during the first week of April and advances would likely flow to farmers by mid-April.

The Spring Credit Advance Program is similar to the Advance Payments Program and is available to all commodity groups covered under the latter. It is administered through local producer groups and the Canadian Wheat Board.

This program complements other income support programs put in place by our government. We will continue to work with the agricultural sector and the provinces to provide farmers with short-term assistance, while pursuing our efforts to bring long-term stability to the sector.