BMO Bank of Montreal plans to offer Prairie farmers a “relief program” including options for loan payment deferrals and other breaks in view of the ongoing grain handling backlog.
“We want to provide immediate support to any grain producers and other related businesses that may be experiencing cash flow disruptions as a result of the backlog, which can hamper their ability to finance crop expenses for the upcoming season,” Steve Murphy, BMO’s senior vice-president for commercial banking, said in a release Thursday. [Related story]
The relief program, available for the bank’s eligible “commercial customers” across the four western provinces, offers deferral of loan payments and “flexible terms” on existing and new lines of credit for 2014 to be set up on a “case-by-case basis.”
BMO said it would also offer a waiver of a new loan application and “concessions” on renewal fees where needed.
BMO’s announcement follows a written plea Wednesday from Saskatchewan Agriculture Minister Lyle Stewart to all financial institutions operating in that province, asking for flexibility in their dealings with farmers.
“Last year’s record crop production is testing the limits of the grain handling and transportation system and causing cash flow concerns for farmers,” Stewart said in a release Wednesday. “I encourage financial institutions to work with producers regarding cash flow requirements and be flexible with loan repayments.”
In the wake of the province’s record 38.4 million-tonne crop in 2013, as well as severe winter weather and other “factors beyond their control,” Saskatchewan growers “have been unable to ship much of this crop and are now facing historically wide basis levels,” the government said.
Financial institutions were also asked to “proactively work with producers to review all of their financial options.”
BMO’s move also follows an announcement in January from federal ag lender Farm Credit Canada that it would contact over 16,000 customers “potentially impacted by delays in grain delivery” to discuss “options to address their individual needs.”
FCC at the time also encouraged farmers who hadn’t done so to consider applying to the federal Advance Payments Program (APP), the financial loan guarantee program which offers producers repayable cash advances. — AGCanada.com Network