Producer Organizations
Q. How do I apply as a producer organization?
A. In order to apply for an advance guarantee agreement you must be a recognized
producer organization, the eligibility criteria for a producer organization
can be found in the Eligibility/Definitions
section of this website. Please see Participating
Organizations on this website to view current eligible producer
organizations. The application forms are located in the Administration
Guidelines which can be downloaded from this website or you
can receive a hardcopy by mail by getting in contact with AAFC.
Q. What is the level of involvement of Agriculture and Agri-Food Canada in delivering the Program to my members?
A. AAFC delivers a guarantee in case of non-repayment from a producer and will advise and guide you in managing the
Program. Management of the Program includes banking arrangements, credit checks, inspections at the producer’s
facilities, issuance of the advances, receipt of repayments of advances and other related tasks.
Q. How do I cover the cost of delivering this program to my members?
A. The Legislation enables the producer organization to charge administration fees to producers.
Q. How is the advance rate determined?
A. The rate is based on half (50%) of the expected average farm gate price of the crop for the crop year.
Q. As a producer organization, what am I liable for?
A. As a producer organization you must ensure that the cash advance is repaid
as the crop is sold. The producer organization is also responsible
for a portion of any repayment defaults that occur. This portion
is calculated based on the default history of the producer organization
and can range from 1%-15%. Consequently, most organizations will
do a holdback equal to the producer organization’s liability. The
holdback is remitted to the producer upon repayment in full of his
advance.
Q. What if at the end of the crop year, the producer does not repay the advance in full?
A. At this point, the producer is declared in default and the producer organization is responsible to apply the penalty for
being declared in default. Also, it must contact the producer to enter into a repayment agreement.
Q. What if the producer is unable to repay or does not want to cooperate after being declared in default?
A. At this point, AAFC will honour the guarantee and will take the necessary steps to enter into a repayment agreement
directly with the producer.
Q. How do defaults affect my chance of receiving a guarantee from AAFC in future crop years?
A. The producer organization is liable for part of the guarantee,
this liability fluctuates from 1%-15% depending on the default history
of the producer organization. The higher the number of defaults,
the higher the producer organization's liability.
