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Federal agency allocates $5BN to help struggling farmers

Farm Credit Canada boosts capital to assist farmers to meet cash flow, defer loan payments
farm land
Photo by Province of B.C.

Farm Credit Canada has (FCC) has received an additional $5 billion in lending capacity, Marie-Claude Bibeau, the federal minister of agriculture and agri-food announced March 23.

“The measures  will provide farmers and food producers across the country with important financial flexibility they will need during these challenging times. Their continued work is essential to our plan to manage COVID-19,” Minister Bibeau said.

It could also lessen the stress of agents who sell farmland.

Farmers concerned about cash flow or food processors losing sales due to the virus-caused financial downturn are among those targeted, said Michal Hoffort, CEO of FCC. “FCC is here to support you in these uncertain economic times,” he said.

The initial FCC 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,” Hoffort added.

The FCC is working with banks, credit unions and other financial institutions on the aid package. The assistance could come in the form of loan payment deferrals and assisting with immediate cash flow needs, he said.

“Each financial situation is unique, so there may be a combination of options considered,” Hoffort said. “The bottom line is that FCC is being supported by our shareholder to play a bigger role in supporting the success of the Canadian agriculture and food industry. The sooner we can discuss potential challenges, the more options we have.”

The aid will be welcomed by those selling Prairie farmland in what has been a slowing market recently.

Farmland prices may have hit a wall, especially land at the high end of the market, says a real estate agent from Steinbach, Manitoba.

“I’m seeing, in my day-to-day business, a market that is starting to flatten out in terms of price per acre. But still very strong in demand. It’s not a soft market. But it is flattening out in price,” Stacey Hiebert, a Royal LePage agent for Riverbend Realty told the Western Producer in February.