The amount had been set to drop back to $100,000 at the end of this month after sitting at $350,000 for 2023.

Federal agriculture minister Lawrence MacAulay announced the change March 25.

“In the face of so many challenges, our hardworking producers continue to show their resilience and produce top-quality products for Canadians and the world,” he said in a statement.

“Increasing the interest-free portion of the Advance Payments Program means improved cash flow and savings for farmers as we head into the 2024 planting season.”

Producers had asked for the amount to be raised after learning in late February it would change.

The Agricultural Producers Association of Saskatchewan said it was happy with the decision.

“It’s what we had asked for, so we’re happy,” said president Ian Boxall.

He said program data supported $250,000 as the right number.

The APP offers $1 million to producers of 500 crop and livestock products who can borrow against expected production or produce in storage. The advances are based on up to 50 per cent of anticipated market value of those products.

In 2022, the government raised the interest-free portion to $250,000 and then again to $350,000 last year to deal with high interest rates and volatility.

The federal government said farm operating costs remain uncertain, and raising the interest-free portion would save 11,950 producers an extra $4,916 in interest costs, on average.

The total savings for producers is estimated at $58.7 million.

Support at the beginning of the production cycle allows farmers to buy inputs for the growing season. It also provides some marketing flexibility as producers can sell when it’s best rather than because they need cash.

At the Canadian Federation of Agriculture annual meeting earlier this year, MacAulay had told producers he couldn’t grant their wish for a higher limit but the finance minister might be able to.

The Canadian Cattle Association had asked for the limit to remain at $350,000 but said $250,000 was a good step.

President Nathan Phinney said the APP is a useful tool, and a higher interest-free portion is a relief.

“This sustained increase comes at a time when producers need all economic levers at their disposal to increase food security and economic competitiveness,” he said.

CCA had said the lower limit was “untenable as it does not account for farmers’ current realities.”

“By maintaining the increase to interest-free portion of loans under APP, the federal government can demonstrate it recognizes the needs of producers — across commodities and across the country — who have been facing escalating input costs,” the association said in February.

Grain Growers of Canada also applauded the decision. Chair Andre Harpe said it would support thousands of grain farmers across the country.

“With the rising cost of inputs and low grain prices at harvest, a higher interest free portion of the APP is needed,” he said.

The GGC said announcing this decision early provides farmers with predictability and stability so they can plan their year ahead.

—Karen Briere writes for the Western Producer

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However, he did suggest farmers talk to the finance minister about it.

Speaking to delegates at the Canadian Federation of Agriculture annual meeting, the minister referenced the APP while talking about available programs. He said farmers had been through a lot in the last few years with pandemic supply chain issues, global unrest and extreme weather.

“We have programs that will assist, (like) the advance payment program,” he said, adding farmers can access up to $1 million.

He said the interest-free portion had risen from $100,000 to $250,000 to $350,000 last year.

“That helps. I used that when I was a farmer myself,” he said.

However, Ontario Federation of Agriculture delegate Ethan Wallace noted that the $350,000 no longer applied.

“It is currently back to $100,000. Can you or your government commit to putting that limit back to the $350,000?” he asked.

MacAulay replied: “Perhaps the government can. I can’t.”

He said he would push for that every chance he gets.

Bloc Quebecois agriculture critic Yves Perron said he didn’t know the $100,000 limit was back in place.

“It has to be $350,000,” he said during his speech. “It has to be kept at that level.

Conservative agriculture critic John Barlow said he also didn’t know until farm organizations began contacting him.

He said he wouldn’t bet the farm on the decision being reversed.

Meanwhile, delegates also raised Bill C-234 and asked speakers if they support the amended version of the bill, which leaves farm buildings and greenhouses out of any possible carbon tax exemption.

Perron said his party supports passing the amended version because at least grain drying will be covered.

The Conservatives and NDP prefer the original bill.

“We intend to reject the Senate amendments to it,” said NDP critic Alistair MacGregor to applause.

However, with the BQ support, the Liberal government can pass the amended bill whenever the matter comes to a vote.

—Karen Briere writes for the Western Producer from Saskatchewan.

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