Advance Payments Program
The Advance Payments Program (APP) is a financial loan guarantee program that gives producers easier access to credit through cash advances.
This means improved cash flow throughout the year and better opportunities for marketing their agricultural products.
A number of producer organizations across the country are delivering cash advances under the APP. These producer organizations are listed along with the list of agricultural products on which they are offering cash advances at the following link: Participating Producer Organizations. As new producer organizations are ready to deliver the program, they will be listed on the APP Web site.
The Advance Payments Program (APP) provides producers with a cash advance on the value of their agricultural products during a specified period. By improving their cash flow throughout the year, the APP helps crop and livestock producers meet their financial obligations and benefit from the best market conditions.
Under the APP, the federal government guarantees repayment of cash advances issued to farmers by the producer organization. These guarantees help the producer organization borrow money from financial institutions at lower interest rates and issue producers a cash advance on the anticipated value of their farm product that is being produced and/or that is in storage.
Objectives
Give producers easier access to credit through cash advances.
Available Funding
The cash advance rate cannot exceed 50% of the average market price that the Minister estimates will be payable to producers of the agricultural product in that area. The maximum cash advance available to each producer is $400,000. The federal government pays the interest on the first $100,000 of a cash advance issued to a producer per production period and producers have up until the end of the production period to repay their advance.
Emergency cash advances
A portion of a cash advance may be issued as an emergency advance where an agricltural sector is facing conditions of severe economic hardship or difficulty producing because of unusual production circumstances that are attributed to weather or natural disaster. The maximum emergency advance is $400,000.
These provisions are subject to any terms and conditions set out in the Advance Guarantee Agreement.
Program Delivery
The APP is accessed through producer organizations that administer the program through an agreement with Agriculture and Agri-Food Canada (AAFC) and a designated lending institution. There is a list of Participating Producer Organizations on this Web site.
Producer organisations deliver the APP On behalf of Agriculture and Agri-Food Canada (AAFC). Producers can apply for a cash advance from a producer organization - not directly from AAFC. Please refer to the list of Participating Producer Organizations on this Web site to locate a producer organization near you that offers cash advances.