Ottawa announces support for farmers and agri-food businesses

Given that Canadian farmers and food businesses provide Canadians with the quality food on their grocery store shelves and kitchen tables, the federal government last week announced new measures to support the sector facing financial hardship due to the impacts of the COVID-19 pandemic.

Farm Credit Canada will receive support from the Government of Canada that will allow for an additional $5 billion in lending capacity to producers, agribusinesses, and food processors. This will offer increased flexibility to farmers who face cashflow issues and to processors who are impacted by lost sales, helping them remain financially strong during this difficult time.

In addition, all eligible farmers who have an outstanding Advance Payments Program (APP) loan due on or before April 30 will receive a “stay of default,” allowing them an additional six months to repay the loan. This important measure, which represents $173 million in deferred loans, will help keep more money in farmers' pockets during these critical months.

The stay of default will also provide farmers the flexibility they need to manage their cashflow when facing lower prices or reduced marketing opportunities. Applicable farmers who still have interest-free loans outstanding will have the opportunity to apply for an additional $100,000 interest-free portion for 2020-2021, as long as their total APP advances remain under the $1 million cap.

“Farmers and producers work hard to put food on tables across our country, and they should not have to worry about being able to afford their loan payments or having enough money to support their own families,” said Prime Minister Justin Trudeau in a statement. “We are taking action now to give them more flexibility to meet the challenges ahead.”

“If you are a producer concerned about having the cash flow required to plant your crop, or you are a food processor feeling the impact of a lost sale due to the financial downturn, FCC is here to support you in these uncertain economic times,” said Michael Hoffort, FCC president and CEO. “It’s in times like these that we are reminded how important Canadian producers and food processors are to our nation and to feeding the world.”

Hoffort adds that FCC will use its resources to find solutions that offer the best chance for recovery going forward so the industry emerges stronger. Initially, the focus will be on assisting the industry in addressing cash flow challenges so that businesses can remain focused on business-critical functions rather than worrying about how to access funds to keep operating through this difficult time.

“Supporting the industry will also take strong collaboration between banks, credit unions, FCC and other financial institutions,” said Hoffort. “FCC has served as a strong and stable industry presence for more than 60 years, and this current situation is no different. We will be working in partnership with other financial providers to offer the solutions needed by the agriculture and food industry to take on the challenges ahead.”

As part of its ongoing support efforts, FCC also is asking existing customers who have cash flow or other financial concerns to contact the organization to discuss alternatives, such as loan payment deferrals and products available to assist with cash flow needs.

Customers facing financial pressure are encouraged to contact their FCC relationship manager or the FCC Customer Service Centre at 1-888-332-3301 to discuss their individual situation and options. A Crown corporation, FCC is Canada’s leading agriculture and food lender, with a loan portfolio of more than $38 billion. Visit www.fcc.ca.