The Agricultural Producers Association of Saskatchewan (APAS) and the Saskatchewan Cattlemen’s Association have sent a joint letter to the Federal Agriculture Minister regarding changes to the Federal Government's 2024 Advance Payments Program (APP). 

Starting in 2024, Ottawa is changing the interest-free portion of the Advance Payments Program back to $100,000 from the current $350,000 level.

The groups are calling on Ottawa to reconsider its decision and reinstate the $350,000 interest-free portion.

They emphasize that adequate support for farmers is not only essential for the viability of agricultural businesses and the rural economy but also critical for ensuring a stable and secure food supply.

APAS points out it’s been three years since the interest-free portion was at $100,000, adding that interest rates have skyrocketed, grain prices have dramatically declined, and input prices have remained high. 

President Ian Boxall says the program needs to reflect the current realities of farm and ranch operations, adding that margins are tighter today than they were two years ago when the amount was increased.

"Farmers are already grappling with rapidly declining commodity prices, market volatility, and stubbornly high input costs.  The reduction in the interest-free portion of the Advance Payment Program only adds to the uncertainty we’re facing ahead of a critical time in the production season. Returning the interest-free limit to $100,000 is a short-sighted decision that fails to acknowledge the persisting challenges faced by farmers."

Boxall says that will be their message when they meet with the Minister of Agriculture next week.

According to their numbers, the $250,000 reduction in the interest-free portion could translate to an additional estimated $30,000 for farmers to cover interest costs, representing more than three times the burden compared to 2021. 

APAS points out the implications of this decision extend far beyond financial strain and will have wide-ranging impacts on farm financial management. 

With the smaller interest-free portions, farmers may turn to high-interest loans and credit lines, exacerbating financial challenges already faced by many producers today.