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Financing, Grants, Loans, Programs, Services and Organic Farmers

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Image credits to Canada Facts (http://www.canadafacts.org/)

Getting financing can be difficult. It doesn’t matter what it is for, such as tuition, starting a business, buying farmland, etc. It gets increasingly challenging if you do not know where to get financing or the type that fits your need(s).

Fortunately, there are many financial options today if you are willing to take the time to search for them, and get as much information as possible, so you may make an informed decision.

With respect to agriculture and in particular organic farming, there are various forms of financing as well as programs that can assist you to get started as an organic farmer, as well as assist existing organic farm operations.

Loans, grants and programs seem to be the most popular and accessible ways in which you can get financing and help for your agricultural pursuits. There are other ways such as equity financing and crowdfunding that can be employed. However, the highlighted three (3) areas will be focused on, in additional to providing link to other financing options, programs and services.


LOANS

Loans are usually provided by banks, credit unions and other financial institutions such as Farm Credit Canada (FCC). These loans are generally given as lines of credit, term loans or mortgages.

Lines of credit is basically approved loans that can be accessed anytime in various amounts. These loans are used to pay for day-to-day farm expenses, and may have limited overdraft facilities.

Term loans are money that are borrowed usually once and repaid over a time frame, such as up to a maximum of ten (10) years. These credits are better geared for capital investments such as tractors. They may offer flexible repayment terms such as making payments monthly, quarterly, semi-annually and annually. They may also have fixed or variable interest rates for 1, 2, 3, 4 or 5 years.

Mortgage loans are borrowed capital for major purchases such as buying farmland, with repayment periods up to twenty (20) years. There may be a minimum loan amount such as $25,000.


Canadian Agricultural Loans Act (CALA)

The Canadian Agricultural Loans Act (CALA) is a federal program that replaced the Farm Improvement and Marketing Cooperatives Loans Act, and is designed to provide funding for farm improvements, processing, distributing and marketing of agricultural goods.

Through this program, farmers can receive up to eighty percent (80%) in financing [or ninety percent (90%) for beginning farmers], to a maximum of $500,000 for real property assets, and up to $350,000 for other eligible assets.

CALA is a loan guarantee program and repayment period can be up to ten (10) years or fifteen (15) years for land.

The loans are issued and administered by banks, credit unions, and caisses populaires.

For more information see http://www.agr.gc.ca/eng/?id=1288035482429.


Crop Inputs

Through Farm Credit Canada (FCC) which is a federal Crown corporation, you may borrow money and pay for crop inputs at the same place.

For more information see https://www.fcc-fac.ca/en/we-finance/primary-producers/crop-inputs.html


Livestock

Through Farm Credit Canada (FCC) you may borrow money and pay for livestock at the same place.

For more information see https://www.fcc-fac.ca/en/we-finance/primary-producers/livestock.html


Agricultural Credit Corporation

The Agricultural Credit Corporation (ACC) is non-profit farm organization that offers low cost loans for day-to-day expenses.

For more information see https://www.agcreditcorp.ca/


Bonds

In the United States of America (USA), some states have created bond programs to help beginning farmers acquire farmland, buildings, equipment, etc.

For more information see http://www.stateagfinance.org/types-of-state-ag-loan-programs


GRANTS

Grants are money given that do not have to be repaid, and can provide valuable assistance for organic farmers. However, grants usually involve a longer and more rigorous application process that is generally time consuming. There are usually deadlines and many other applicants that may make it harder to get financial support. There may also be constant monitoring and regular written reports that have to be done, after you are successful in getting the grant and the money has been disbursed to you.


Quebec Establishment Grant

The Quebec Establishment Grant is designed to assist young farmers pursue agriculture full-time, and also to encourage getting agricultural training. Grants can be between $20,000 to $50,000.

For more information see http://www.fadq.qc.ca/en/releve/financial_support/etablishment_grant.html


Innovation PEI

The Innovation PEI Pilot Fund is a program by the Government of Prince Edward Island (PEI) that provides seed money to entrepreneurs and scientists to test innovative and high-risk ideas with commercialization potential.

For example, PEI Organic Fruit and Berries Limited received funding from the Innovation PEI Pilot Fund to help in creating high value berry purees and oil products.

For more information see http://www.innovationpei.com/pdfund


PROGRAMS


Futurpreneur Canada Start-Up Program

The Futurpreneur Canada Start-Up Program is for eligible individuals between the age of 18 and 39 years. Loans that are given can be up to $15,000.

For more information see http://www.futurpreneur.ca/en/get-started/financing-and-mentoring/


AgriInvest

AgriInvest is a federal program where the government of Canada contributes money to eligible farmers’ accounts based on how much have been initially deposited.

The account is created in a financial institution such as a bank. It may be an interest bearing account without no monthly account fees or day-to-day transaction fees. To open such an account, an AgriInvest Personal Identification Number (PIN) will be needed. This is given by the Canadian government when an AgriInvest Account Initiation Form is sent to eligible farmers.

It is designed to help farmers deal with small income declines, and help mitigate risks or improve income.

For more information see http://www.agr.gc.ca/eng/?id=1291828779399


OTHER FINANCING OPTIONS IN CANADA


Canada Business Network

http://www.canadabusiness.ca/eng/page/2848/


Community Farms Program

http://www.communityfarms.ca/resources/grantsLoans.shtml


Canada Business Ontario

http://www.cbo-eco.ca/en/index.cfm/financing/government-loans-and-grants/grants-subsidies-and-contributions-agriculture/


OTHER FARM PROGRAMS AND SERVICES IN CANADA


AGPAL

If you need help in finding agricultural programs and services, check out Agpal. Agpal is a web-based application used to search across Canada. It is operated by Agriculture and Agri-Food Canada, British Columbia, NewFoundland and Labrador, Nova Scotia, Ontario, Saskatchewan, Atlantic Canada Opportunities Agency, Canadian Agricultural Human Resources Council, Farm Credit Canada, Greener Pastures Ranching Limited schools and Health Canada.

For more information see http://www.agpal.ca/


Agriculture and Agri-Food Canada Programs and Services

http://www.agr.gc.ca/eng/programs-and-services/list-of-programs-and-services/?id=1362151577626


Growing Forward 2

http://www.agr.gc.ca/eng/about-us/key-departmental-initiatives/growing-forward-2/?id=1294780620963


Programs for Young and Beginning Farmers

http://www.agr.gc.ca/eng/programs-and-services/young-and-beginning-farmers/?id=1391690826829


Programs and Services for Rural Canadians

http://www.agr.gc.ca/eng/programs-and-services/rural-canadians-guide-to-programs-and-services/?id=1395073769126


Advance Payments Program

http://www.agr.gc.ca/eng/?id=1425053475892


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