News release
FARM IMPROVEMENT LOAN GUARANTEES PROGRAM TO CONTINUE
OTTAWA, ON, April 24, 2006 - The Farm Improvement and Marketing Cooperatives Loans Act (FIMCLA) program will continue as part of the federal government's ongoing commitment to Canadian agricultural producers.
"The program was set to end on March 31, 2006, but farmers and agricultural cooperatives have told us they need a loan program in their communities," said Agriculture and Agri-Food Minister and Minister for the Canadian Wheat Board Chuck Strahl. "Our challenge now is to explore how the program can work better for them."
Through the FIMCLA program, producers can more easily access credit to improve farm assets, strengthen production, and improve the financial viability of their farms. Loans up to $250,000 for producers and $3 million for cooperatives that are owned by active producers, are guaranteed by the federal government.
The program will remain in place as government officials consult with stakeholders about how it can better meet their needs. Further analysis of the FIMCLA program will also be done. Issues under review include how the program can best support beginning farmers and agricultural cooperatives.
Agriculture and Agri-Food Canada officials will present their recommendations to the Minister this summer.
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For more information, please contact:
Jeff Howard
Press Secretary
Minister Strahl's Office
(613) 759-1059
Media Relations
Agriculture and Agri-Food Canada
(613) 759-7972
1-866-345-7972
BACKGROUNDER
Farm Improvement and Marketing Cooperative Loans Act (FIMCLA) Program
What is FIMCLA?
The FIMCLA program is a federal government guaranteed loans program designed to make loans more readily available to producers and cooperatives. The program encourages investment in areas such as new machinery, livestock, buildings and technology. The purpose of the loans is to help producers strengthen production and improve the financial viability of their farms.
The FIMCLA program was established in 1988 and has helped more than 130,000 farmers and their marketing cooperatives grow their businesses by guaranteeing loans through lending institutions.
To be eligible, applicants must be individuals, partnerships, corporations or cooperative associations actively engaged in farming in Canada. The program provides access to loans through lending institutions including Chartered Banks, Alberta Treasury Branches, Credit Unions, Caisses Populaires, Trust Companies, Loan Companies and Insurance Companies.
Agriculture and Agri-Food Canada (AAFC) guarantees 95 percent of the value of each loan. Maximum loan amounts are $250,000 per individual producer or $3 million for cooperatives.
Status of FIMCLA
Because of the decreasing number of loans issued and requests for program changes, an independent evaluation of the program was conducted in 2004.
The evaluation report recommended suspending the program until a needs assessment was performed to identify gaps in support for target groups such as beginning farmers and agricultural cooperatives. FIMCLA legislation does not currently allow guarantees on loans to purchase farm assets for potential new farmers and only supports cooperatives that are 100 percent producer-owned.
The FIMCLA program was cancelled in the 2005 Budget but after requests from stakeholders, was extended to March 31, 2006 to allow further study of the program and producer needs. The program has now been extended indefinitely.
Government officials are talking with stakeholders about how the program can meet their credit needs and be expanded to support beginning farmers. Results of the consultations will be presented to the Minister this summer.
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