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Interest-Free Limit of APP Set at $250,000
March 25, 2024
The Advance Payments Program (APP) is a federal program under the Agriculture Marketing Programs Act (AMPA), which provides agriculture producers with easy access to low-interest cash advances for livestock and crops.
Under the program, beef farmers can access up to $1,000,000 per program year in advances based on the value of their cattle. As announced today, the Government of Canada will cover the interest on the first $250,000 advanced to the farmer for the 2024 program year, and advances are repaid once the cattle are sold.
In 2022, the Government of Canada increased the interest-free portion of the Advance Payments Program from $100,000 to $250,000 for the 2022 and 2023 program years. As pressures compounded in 2023, the limit was further increased from $250,000 to $350,000 for the 2023 program year.
In unison with the Canadian Cattle Association, BFO has been calling on the federal government to maintain the $350,000 interest-free portion of the program permanently to help support business cash flow needs in light of increased market volatility, interest rate hikes, and debt servicing costs that farmers are required to manage.
BFO administers the interest-free provision of the APP for the feeder co-operatives across the province. This provision is permitted because the Ontario Ministry of Agriculture, Food & Rural Affairs guarantees the Ontario Feeder Cattle Loan Guarantee Program. In addition, the APP program can be accessed by Ontario producers through the Agriculture Credit Corporation.
AAFC News Release: Minister MacAulay raises interest-free limit of the Advance Payments Program to $250,000 for 2024
CCA News Release: CCA Welcomes Sustained Increase to Interest-free Portion of Loans under Advance Payments Program