Ontario’s agricultural sector, spanning beef, grain, pork, veal, and fruit and vegetable, faces increasing financial pressures due to market volatility, rising input costs, and high debt servicing demands. To address these challenges, major commodity and general farm organizations are urging the federal government to increase the interest-free portion under the Advance Payments Program (APP) before the next program year begins in April.
The APP is a vital financial tool for farmers, particularly new entrants and young producers, helping them manage cash flow amid market instability. Since 2022, temporary increases to the interest-free portion of APP have provided essential support. However, without action, this limit will revert to $100,000—a threshold that no longer reflects today’s operational realities.
Farming today demands greater investment and risk tolerance than in previous years. A rollback to the $100,000 interest-free limit would significantly reduce the program’s effectiveness and fail to address the financial challenges facing farmers. Industry leaders strongly recommend increasing the interest-free portion to $350,000 to better align with current needs.
This recommendation is consistent with the House of Commons Standing Committee on Agriculture and Agri-Food’s report, Grocery Affordability: Examining Rising Food Costs in Canada, which underscores the importance of:
- Providing farmers with access to short-term, low-cost credit.
- Maintaining the increased interest-free threshold under the APP.
By making this adjustment, the federal government can demonstrate its commitment to supporting farmers facing escalating input costs and increasing financial pressures. The APP was designed to provide this critical support, and maintaining an adequate level of interest-free assistance remains essential. While interest rates may decline, production costs continue to rise, making an increase to the interest-free portion of APP a necessary step.
Ensuring year-round financial stability for farmers enables them to plan effectively, invest in their operations, and make informed decisions for the next production year. Industry representatives continue to advocate for these changes to uphold the program’s intended purpose and to safeguard the resilience of Canada’s agricultural sector.
Supporting Organizations:
- Agricultural Credit Corporation
- Beef Farmers of Ontario
- Christian Farmers Federation of Ontario
- Grain Farmers of Ontario
- Ontario Federation of Agriculture
- Veal Farmers of Ontario
- Ontario Pork
- Ontario Sheep Farmers
- Ontario Fruit and Vegetable Growers’ Association
