Canadian farmers who are finding it difficult to obtain loans due to the tightening of global credit markets can count on the Government of Canada. Agriculture Minister Gerry Ritz introduced new legislation to guarantee an estimated $1 billion in loans over the next five years to Canadian farm families and cooperatives, most of which will go to farmers and cooperatives who were previously ineligible.
“Canada’s farmers have always made such an important contribution, both to our society and our economy,” said Minister Ritz. “That is why we continue to work hard to ensure farming remains a viable career choice. These amendments will give new farmers, more agricultural co-operatives, and farmers taking over the family farm, easier access to credit to establish and improve farms.”
On Friday, Prime Minister Stephen Harper followed up on his commitment in Canada’s Economic Action Plan by announcing the introduction of legislation that would expand the scope of the Farm Improvement and Marketing Cooperative Loans Act.
The proposed amendments would ensure that:
• Farmers would be eligible for new loan guarantee limits of up to $500,000, which doubles the current limit of $250,000.
• New farmers would be eligible for loans under the Canadian Agricultural Loans Act (CALA). Currently they are not eligible under the FIMCLA.
• Agricultural co-operatives with a majority farmer membership (50% + 1 farmer members) would be eligible for loans of up to $3 million for the processing, marketing or distribution of farm products. Loans are currently limited to co-operatives owned 100% by farm members.
• Loans of up to $500,000 would be available to help inter-generational farmers taking over their family farm. These loans are currently not available under the FIMCLA.
• The name of FIMCLA would be changed to CALA to reflect its new focus.
To ensure the new program remains responsive to producers’ needs, a full review of the program will be done in five years.
The FIMCLA program remains in place while the amended Act goes through Parliament.
