Prime Minister Stephen Harper has announced changes to the Farm Improvement and Marketing Co-operative Loans Act (FIMCLA), which will expand credit available to individual farmers and co-operatives.
FIMCLA is designed to finance farm improvements and fund the processing, distribution and marketing of farm products. The act currently provides individual farmers with up to 80 per cent financing to a maximum of $250,000 for financing new or used assets. A farmer-owned co-operative can apply for up to $3 million.
In an announcement made May 1 in Edgeley, Saskatchewan, Harper said the new legislation to guarantee an estimated $1 billion in loans over the next five years, most of which will go to farmers and co-operatives that were previously ineligible.
A press release said the changes include increasing the amount of guaranteed credit available, expanding the criteria for the program so that new farmers, who are excluded from receiving loans under the existing act will also be eligible, and that eligibility criteria for agricultural co-operatives will also be expanded so that more co-ops can receive funding.
The release said the changes will also allow intergenerational farm transfers.
Keystone Agricultural Producers, Manitoba’s general farm policy organization, reacted favourably to the changes.
“Previously, the loans under the act were only available to existing farmers so this expansion of the program will be key to help beginning farmers establish their businesses,” Rob Brunel, KAP vice- president and Chair of KAP’s Young Farmers Committee said in a release.
KAP also noted the backing for intergenerational transfer which will help young farmers take over the family farm.
“Although this announcement helps with access to farm credit, we still need to develop long-term strategies — government and farmers — to ensure financial viability in all agricultural sectors so that beginning farmers can grow profitable businesses,” said Brunel.
More details were not immediately available but in a 2006 series of eight consultation meetings, participants were asked for feedback on potential changes which included:
• Expand the program to include beginning producers, including inter-generational farm transfers
• Expand the program to allow more flexible eligibility rules for co-operatives
• Increase the aggregate loan limits for producers and co-operatives
• Increase the eligible rate of loan amount
• Modify the registration fee to incorporate different risk categories/amounts of loans