Canada Increases Interest Free Loan Maximum

OTTAWA - Mar 6/01 - STAT -- The amount of money Canadian farmers can borrow interest free to help plant this year's crops was boosted from CDN $20,000 to $50,000.

Though criticized by many U.S. farm groups as a powerful subsidy to Canadian growers, at current interest rates the benefit amounts to little more than $3,000 per business if the money is not repaid for a full year. If the load is paid back in six months, the financial benefit drops to $1,500.

Available under the Spring Credit Advance Program and administered by various groups across the country, federal agriculture minister Lyle Vanclief said the money is intended to help producers deal with sharp increases in fuel and fertilizer costs.

Last year, the first year of the Spring Credit Advance Program, 31,000 producers borrowed $356 million. Farmers who apply must also participate in the crop insurance program or another program that provides similar security.

"This enhancement of the Spring Credit Advance Program complements many other farm income support tools this government has put in place to help farmers," said Mr. Vanclief. "We will continue to work with producers and the provinces to provide short-term measures, while at the same time working towards longer-term stability for the sector."

Application forms are expected to be available in April.