Financial support for young farmers a barrier for transition
More organizations are responding to the need to help young farmers stay in the agriculture industry.
The lack of financial support for young farmers is one of the barriers for transition planning, according to responses from the Ag Succession Survey. Within the final comments section, there were many respondents that commented how inaccessible the industry is - even for those within it.
However, several organizations recently announced programs to help young farmers. Farm Credit Canada (FCC) unveiled its Starter Loan Program in early March 2019. Manitoba Agricultural Services Corporation (MASC) also increased the maximum amount eligible for the Young Farmer Rebate program in the same month.
FCC Starter Loan Program
The FCC Starter Loan Program is open to applicants from 18-25 years of age, and can provide up to $50,000 to help new entrepreneurs start their farming operations. Loan funds can be used to finance the purchase of assets such as livestock, equipment, or an existing business and is available to both primary producers and agri-businesses.
Coupled with this, FCC offered their farm management software, AgExpert Accounting Premium, for free, with the intent that young borrowers can have the financial independence and knowledge they need while establishing a solid credit history.
Manitoba Young Farmer Rebate Program
In Manitoba, as part of the 2019 provincial budget, the government partnered with MASC to increase the maximum amount eligible for the Young Farmer Rebate program to $200,000 from $150,000. The program provides an annual rebate of up to two per cent on the principal of a loan from MASC for up to five years. As a result of the expansion, the lifetime maximum rebate also increases, to $20,000 from $15,000. All of these changes came into effect on April 1, 2019.
In response to farm consolidation and rising barriers to entry, MASC stated that they are enhancing their programs with a target that 75 per cent of new loan approvals be for young farmers. Recent census data shows the average age of a Manitoba producer is over 53. In consultation with stakeholders, industry groups and young producers, it was noted that assistance for young farmers is necessary, given rising costs and changes in farm economics over the past decade.
BMO Young Farmer Program
In 2018, the Bank of Montreal (BMO) launched its own loan program for Canadian farmers 35 years of age or younger. The BMO Young Farmer Program provides higher advance rates to invest in equipment, new technologies or the overall infrastructure of a farm operation.
AAFC Youth in Agriculture resource page
In addition to these programs, Agriculture and Agri-Food Canada (AAFC) has a page dedicated to youth in agriculture and its available resources. Many government programs, such as AgriStability and the Advance Payments Program, are also available to young farmers. The Canadian Agricultural Loans Act Program increases the availability of loans to new and existing farmers to establish, improve or develop their farms.
On top of financial programs, AAFC lists training and learning opportunities for those interested in agriculture. Organizations, such as Canadian Young Farmers’ Forum, Farm Management Canada and 4-H Canada, also have events and resources dedicated to help young farmers.
The Ag Succession Survey is a survey conducted by Top Crop Manager, Fruit and Vegetable, Canadian Poultry, Manure Manager and Potatoes in Canada – the agricultural magazines published by parent company Annex Business Media. Throughout the months of February and March, the publications polled their readers to find out their opinions on their succession plans and the future of farming in Canada.