Push for permanent $350,000 limit continues

The Ontario Federation of Agriculture (OFA) welcomes the recent announcement by the federal Minister of Agriculture and Agri-Food Heath MacDonald that the interest-free limit under the Advance Payments Program (APP) will be set at $250,000 for the 2026 program year for all non-canola advances.

This follows an announcement last fall, in response to Chinese tariffs on canola, that canola growers would receive an interest-free limit of $500,000 under APP for 2025 and 2026.

Managing cash flow and upfront costs remains one of the heaviest burdens on farm businesses, especially as farmers across Ontario gear up for the busy spring planting season.

“We appreciate the government’s announcement setting the interest-free limit for the APP at $250,000 again this year. This has been part of our ask for immediate financial relief for farmers in light of inflationary pressures, high input costs, and global challenges the agriculture sector continues to face,” says Drew Spoelstra, OFA President.

The APP plays a pivotal role in providing financial support to help farmers effectively manage seasonal cash flow challenges by providing access to low-cost and interest-free cash advances. The program helps farmers navigate the immense upfront costs of production, bridging the financial gap until those products are sold.

Historically, the permanent interest-free limit for the program has been set at $100,000. During the pandemic, it was temporarily increased to $$350,000 and has been set at $250,000 each year for the past several years, leaving the OFA, along with the Canadian Federation of Agriculture and other agricultural organizations to call for a permanent increase to $350,000.

“Ontario farmers need long-term predictability and a year-by-year, temporary approach to the interest-free limit leaves farm businesses guessing about their financial capacity for the following season,” adds Spoelstra. “That’s why the OFA continues to strongly urge the federal government to implement a permanent interest-free limit of $350,000 for the Advance Payments Program.”

In OFA’s most recent farm business confidence survey, members identified high farm input costs, such as for fertilizer, seed treatments, crop protection and fuel, as the number one issue they are concerned about.

The cost of farming has risen dramatically over the last several years, and the financial risks farmers take on each spring have grown right alongside it. The baseline costs of producing agricultural goods have fundamentally shifted, and a permanent increase to $350,000 would accurately reflect the modern cost of agricultural production.