Advance Payments Program: Step 1. What this program offers

Step 1. What this program offers

Temporary increase to the interest-free limit for 2022 and 2023

On June 23, 2022, the Minister of Agriculture and Agri-Food announced a temporary increase to the interest-free limit for advances under the Advance Payments Program (APP). The change will make the purchase of important inputs such as fuel, fertilizer and seed more affordable for producers.

The interest-free limit will increase from $100,000 to $250,000 for the 2022 and 2023 program years. This is the portion of advances on which the Government of Canada pays the interest on behalf of producers. Through the increase to the interest-free limit, eligible producers will have access to additional cash flow over the next 2 growing seasons.

Additional information on this initiative can be found at Government of Canada announces interest relief for agriculture producers or by contacting an APP Administrator.

The Advance Payments Program is a federal loan guarantee program which provides agricultural producers with easy access to low-interest cash advances.

Under the program, you can access up to $1,000,000 per program year in total advances based on the value of your eligible agricultural products, with the Government of Canada paying the interest on the first $100,000 of your advance. Advances are repaid as you sell your agricultural products, with up to 18 months to fully repay the advance for most commodities (up to 24 months for cattle and bison).

APP advances can provide you with cash flow to meet your financial needs until you are able to sell your agricultural products. The program can provide marketing flexibility so you can make the decision to sell your agricultural products based on market conditions rather than the need for cash to meet your immediate financial obligations.

APP advances are available through 30 participating producer organizations, that is, APP Administrators, across Canada.

How much you can receive

Under the APP, you may be eligible to receive up to $1,000,000 per program year, with:

  • the federal government paying the interest on the first $100,000 per program year
  • preferential interest rates on advance amounts over $100,000

Your cash advance is calculated based on up to 50% of the anticipated market value of the eligible agricultural products that you will produce or have in storage. You cannot have more than $1,000,000 in advances outstanding at any one time.

What you need as security for an advance

Your advance must be secured. The security required will depend on the type and state of the agricultural product at the time you apply.

  • The agricultural product on which the advance is based is always required as security
  • For advances on agricultural products that are in production or are non-storable and for advances on animals or animal products, additional security is required. This includes one or more of the potential proceeds from a relevant business risk management program (AgriInsurance, AgriStability or Farm Income Stabilization Insurance [ASRA] in Quebec) and/or another acceptable form of security.

The advance amount you are eligible to receive will be limited by the level of security you are able to provide.

If you are declared in default, the security, including assigned program payments, may be used to pay off your advance.

For more information on acceptable forms of security, you should contact your Advance Payment Program Administrators.

Agriculture and Agri-Food Canada's role in the APP

In addition to providing a financial guarantee on advances issued and paying the interest on the first $100,000 advanced to each producer per program year, Agriculture and Agri-Food Canada (AAFC)'s Financial Guarantee Programs Division (FGPD) is responsible for providing federal oversight by working together with APP Administrators to ensure that the program is administered in a manner that:

  • reduces costs to producers and use of public funds
  • is focused on providing benefit to Canadian producers
  • respects the annual Advance Guarantee Agreements, Program Guidelines, the Agricultural Marketing Programs Act and its Regulations