A raise in the cap for guarantees on loans to farmers is among the changes pending as the federal government moves to amend, and rename, its Farm Improvement and Marketing Co-operative Loans Act (FIMCLA).
The amendments, introduced Monday in the House of Commons by Agriculture Minister Gerry Ritz, were telegraphed last Friday in Saskatchewan by Prime Minister Stephen Harper, pledging to guarantee about $1 billion in ag loans over the next five years.
FIMCLA, a guaranteed loans program, was set up to make loans more readily available to producers and co-operatives and encourage investment in areas such as new machinery, livestock, buildings and technology.
The changes Harper announced last week are meant to expand the loan guarantee offerings to farmers and co-operatives who were “previously ineligible.”
Among the specifics in the amendments introduced Monday, farmers would become eligible for loan guarantee limits of up to $500,000, twice the current limit of $250,000.
As well, new farmers, who currently aren’t eligible for loans under FIMCLA, would be eligible for loans under the Canadian Agricultural Loans Act (CALA). FIMCLA is to be renamed CALA “to reflect its new focus,” the government said Monday.
Also included in these amendments, loans of up to $500,000 would be made available to help intergenerational farmers taking over their family farm. Such loans also aren’t currently available under FIMCLA.
Furthermore, ag co-operatives with a majority farmer membership (50 per cent-plus-one farmer members) would be eligible for loans of up to $3 million for the “processing, marketing or distribution of farm products.” Loans under FIMCLA are currently limited to co-operatives 100 per cent-owned by farm members.
The current FIMCLA will stay in place while the legislation to be known as CALA goes through Parliament, the government said Monday.
A “full review” of the program will be done in five years “to ensure the new program remains responsive to producers’ needs,” the government added.
The government said it also expects to improve the delivery of CALA through a new online system.
“These amendments will give new farmers, more agricultural co-operatives, and farmers taking over the family farm, easier access to credit to establish and improve farms,” Ritz said in a release late Monday afternoon.