Managing cash flow on a farm or ranching operation can be a real challenge.
As a result, many farmers use the Federal Government’s Cash Advance Program in the Spring to access cash and have more flexibility in their marketing plan.
Under the program, farmers can apply for a cash advance on over 50 commodities including everything from field crops to livestock, honey and organic production.
Producers can apply for the Federal Cash Advance Program through the Canadian Canola Growers Association.
Dave Gallant, the CCGA's director of finance and operations says the cash advance provides a real advantage for producers at this time of the year.
"They can get a cash advance right now, we'll start issuing beginning of April. That will allow them to take an advance for grain that's not yet in the ground. So they can get an advance on what they plan to seed this spring. When you look at the fact that the first $250,000 is interest-free, and the very low-interest rate offered by CCGA it's an extremely low-cost version of working capital financing."
CCGA's interest rate will remain at prime less 0.75 per cent on up to an additional $750,000.
He says with the increase in crop inputs and higher interest rates it's definitely a program farmers and ranchers will want to consider.
There are no limits on how producers can use the advance, it can be for the purchase of crop inputs, investing in farm improvements or repairs, general operating costs and more.
The CCGA has implemented a new online document submission feature to help simplify the reporting requirements and streamlined the priority agreement process making it faster and easier for producers.
Gallant points out that this is also the last year that the first $250,000 is interest-free.
"The government has told us very clearly it will go back to $100,000 interest-free next year. So that means that if farmers want to take advantage of the maximum interest savings under the program. This is the year to do it. When you look at the interest rates last year at this time, prime was 3.2%, today it's 6.7%."
Information on the Federal Government’s Cash Advance Program can be found here.