Farm Credit Canada is doubling the funds in its Young Farmer Loan Program to $1 billion, encouraging Canadian farmers as they enter and grow their agricultural operations.
The decision extends the program that has already approved more than $500 million in loans to farmers under the age of 40 since March 2012. Loans through the program are tailored to younger farmers to support their long-term success. The program includes variable rates at prime plus 0.5%, a special fixed rate and no loan processing fees.
Funds can be used to purchase or improve farmland and buildings and encourages new farmers in a time when the industry is aging. Rocky View Weekly reports Canada saw a 60 percent decrease in young agricultural producers, under the age of 35, in the last 15 years.
Agriculture Minister Gerry Ritz supports the program as a benefit to the country’s agricultural future.
“A strong agriculture industry is vital to the long-term prosperity of the country, so it’s great to see the continuation of this financing option,” Ritz said. “The very presence of FCC provides confidence and security for both FCC customers and non-customers to expand their operations and move the agriculture industry forward.”
Qualified producers can apply for loans totaling as much as $500,000.
The loan program comes at a time when entering the industry is increasingly difficult. Farmland prices jumped 20 percent higher in 2012 and a survey by the FCC shows national prices have averaged a 12-percent increase annually since 2008.
CBC News reports Canada’s average farmer is 60 years old and 75 percent of them don’t have successors.