Ag Groups Call for Return of Higher Interest-Free Portion on Loan Program

Feb 22, 2024

A pair of Saskatchewan farm groups are calling on the federal government to reinstate the higher limit on the interest-free portion of the Advance Payment Program for 2024.

The Agricultural Producers Association of Saskatchewan as well as the Saskatchewan Cattlemen’s Association have written a joint letter to federal Agriculture Minister Lawrence MacAulay seeking a return to the upper limit of $350,000 for the interest-free portion of the program. The maximum total advance available is $1 million.

Originally set at $100,000, the upper limit on the interest-free portion was raised by Agriculture Canada to $250,000 in 2022 and to $350,000 in 2023 due to rising interest rates and input costs. But for the 2024 growing season, the interest-free portion has been returned to $100,000.

According to APAS, the $250,000 reduction in the interest-free portion could translate to an additional estimated $30,000 for farmers to cover interest costs, representing more than three times the burden compared to 2021.

The implications of this decision extend far beyond financial strain and will have wide-ranging impacts on farm financial management, APAS said in a release Tuesday. With smaller interest-free portions, farmers may turn to high-interest loans and credit lines, exacerbating financial challenges already faced by many producers today.

“It’s been three years since the APP interest-free portion was at $100,000, and interest rates have skyrocketed, grain prices have dramatically declined, and input prices have remained high,” said APAS President Ian Boxall. “The program needs to reflect the current realities of farm and ranch operations. Our margins are tighter today than two years ago when the amount was increased due to rapidly increasing input costs.”

Returning the interest-free limit to $100,000, is a “short-sighted decision that fails to acknowledge the persisting challenges faced by farmers,” Boxall added.

The Advance Payment Program, a federal loan guarantee initiative, has long been a crucial lifeline for agricultural producers, offering them reliable access to low-cost cash advances to manage cash flow and navigate the uncertainties inherent in agriculture.

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Video: The 15-Year Bet Behind Every New Variety!

Canada is trying to decide how much agricultural research capacity it can afford to lose. Brian Rossnagel believes the better question is whether the country can afford to rebuild it.

The longtime barley and oat breeder makes the case with a simple fact about his profession: the consequences of today’s decisions may not become visible for 10 or 15 years.

“Pick the right parents. That’s the biggest thing,” Rossnagel says. “If you pick the wrong parents, you’re not going to get anywhere—and you don’t know that until 10 years, 15 years later.”

That warning carries particular weight as Agriculture and Agri-Food Canada moves to reduce spending and streamline parts of its science operations. The department’s 2026–27 plan anticipates the loss of approximately 665 positions by 2028–29 and says some research will be reduced where capacity exists in academia or industry. AAFC says the changes will make its science operations more cost-effective over the long term.

For Canada’s seed industry, Rossnagel’s career illustrates what is at stake.

This fall, the retired University of Saskatchewan breeder will be inducted into the Canadian Agricultural Hall of Fame. During his 35-year career at the Crop Development Centre, he helped develop more than 100 barley and oat varieties, including CDC Austenson—one of Western Canada’s most widely grown feed barleys. His induction recognizes not only those varieties, but the collaboration and research system that made them possible.

Rossnagel is quick to emphasize that none of it was the work of one person.

“The first thing I thought about was all the other people who contributed to whatever success I and my program had over the years,” he says. “We know that it’s not an individual who does this. It’s a group—a team.”

That team extends well beyond the breeder whose name appears beside a variety. It includes technicians, pathologists, quality specialists, statisticians, regional testing sites, seed growers and industry partners. It also includes the breeders who came before and those who will carry the germplasm forward.

CDC Fraser barley, for example, moved through three breeding careers. Its parents came from Brian Harvey’s program. Rossnagel advanced the material after Harvey retired, and Aaron Beattie later guided it through registration and release.

That kind of handoff is normal in plant breeding. The person who makes the original cross may never see the resulting variety reach farmers.

It also explains why lost research capacity cannot simply be switched back on when budgets improve.

“If you shut it off, it’s very, very difficult—and particularly costly—to start it up again,” Rossnagel says. “If you have to start from scratch, it’s going to be at least 10 years before anybody notices whether you’re getting anything done or not.”

The concern is not simply how many experimental lines Canada can process. Modern equipment, statistical tools and genetic technologies allow today’s breeding programs to evaluate tens of thousands of lines—far more than Rossnagel could handle when he entered the field in the early 1970s.

But efficiency and automation do not generate every idea.

“If you pare back down, and instead of having six or seven individual scientists concentrating on wheat breeding, you go down and say three people could handle all this, well, that’s half the ideas gone,” he says. “Particularly if you happen to lose the three people who had the really neat and innovative ideas, boy, that’s a problem.”

It is a timely distinction for Canadian agriculture. Consolidating programs may preserve the volume of material moving through a system, at least initially. It may not preserve the diversity of thinking, regional knowledge or willingness to pursue unconventional crosses.

That regional knowledge matters because Canadian agriculture is not one uniform production environment. A variety suited to southern Alberta may face different disease, moisture and maturity pressures than one grown in Manitoba, Ontario or Atlantic Canada.

“Agriculture is applied biology,” Rossnagel says. “Biology, all around the Earth, moves from the poles to the equator. It does not move from Newfoundland to B.C. like politics do.”