Harper government delivers inmproved access to credit for farmers

June 19, 2009

OTTAWA, Ontario, June 19, 2009 - Harper's Government has passed new legislation to give new farmers, agricultural co-operatives and young farmers full access to $1 billion worth of government-backed credit. Federal Agriculture Minister Gerry Ritz and the Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture) today announced that Bill C-29 has received Royal Assent.

"This Government has delivered on the promise in Canada's Economic Action Plan to give farmers access to the credit they need," said Minister Ritz. "The expanded eligibility for loans will help more farmers establish new operations and improve their farms."

The Canadian Agricultural Loans Act (CALA), formerly known as the Farm Improvement and Marketing Cooperatives Loans Act, is now greatly expanded to allow beginning farmers and more agricultural co-operatives to take advantage of loans which is expected to result in an estimated $1 billion in loans over the next five years.

"Significant changes are occurring in the agricultural sector and programs have to change too," said Minister Blackburn. "With more farmers retiring and financing becoming more difficult, the amendments give timely access to loans for beginning farmers."

The announcement follows up on a commitment in Canada's Economic Action Plan to help make credit available to beginning farmers, support intergenerational farm transfers, and modify eligibility criteria for agricultural co-operatives.

With these changes:

• Farmers now have access to greater amounts of credit. Farmers are eligible now for expanded loan guarantee limits of up to $500,000 which doubles the previous limit of $250,000.
• New farmers are now eligible for loans that they were previously ineligible to receive.
• Agricultural co-operatives with a majority farmer membership (50 per cent + 1 farmer members) are eligible for loans of up to $3 million for the processing, marketing or distribution of farm products. Loans were previously limited to co-operatives owned 100 per cent by farm members.
• Loans of up to $500,000 are available to help intergenerational farmers taking over their family farm. These loans were not available under the previous legislation.
• A new on-line system will be developed to improve the delivery of the program.

For more information on CALA call toll free 1-888-346-2511 or visit the website at www.agr.gc.ca/cala.