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This story was first published on RealAgriculture.com on July 24, 2025.
A small change to the criteria for cash advance applications is “a very big step backwards” for young grain producers trying to access financing for crop inputs, according to a large administrator of the federal government’s Advance Payments Program (APP).
For 2025, the federal government is no longer allowing separate advances to be issued to multiple generations if they share a crop insurance policy, explains Dave Gallant, vice-president of finance and APP operations with the Canadian Canola Growers Association (CCGA) — one of around two dozen industry organizations that administer the APP.
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Crop insurance is often used as collateral for obtaining a cash advance. It’s not uncommon for younger grain producers to share insurance policies with older generations to take advantage of a farm’s production history when it comes to insurance premiums.
“The government has unilaterally told us that farmers can no longer justify that they are actually separate farming operations, which means young farmers getting started today now have to share with mom and dad the overall program limit of a million dollars and the interest free limit, even if they are truly indeed farming as separate operations,” says Gallant.
“We view it as a very big step backwards, and certainly makes the program less attractive to farmers in that situation.”
Gallant raised the young farmer eligibility issue as part of a panel discussion about ways to improve the Advance Payments Program at the Canadian Federation of Agriculture‘s Policy Summit in Winnipeg last week.
Need for more trust from government
In general, he sees a need for more trust from government in farmers, which would lead to increased flexibility in program administration and a more efficient, targeted approach to compliance.
“What it looks like, from our perspective, is that when you’ve got an existing customer who comes back year after year for an advance, who’s repaid that advance without problems, we should be able to rely on the information the farmer provides us on their application to grant them their advance,” he says.
“There should be a process to allow us to trust those existing customers who have a good repayment history, so that we don’t have to do all that extra work that gets them their money faster, and that reduces the cost of delivering the service.”
Rather than requiring every farmer to go through an administrative proof-of-sale and repayment process with each grain sale, he suggests moving to an audit approach, reducing the cost of administration while freeing up resources to focus on accounts where there are problems with compliance.
While farm groups have long called for increases to the interest-free limits under the program, Gallant says predictability is also important.
The government has raised the interest-free limit from $100,000 in five of last seven years, but it’s always been a last minute change, even months after the program starts on April 1.
“What we’re really looking for is consistency … so that farmers know when they’re putting together their financing package for their farm for the year — not just five days before the program starts, or three months after,” says Gallant.
He also makes the case for adjusting the cash advance program timing. CCGA and other administrators are only allowed to disburse funds starting April 1, but seed and fertilizer are frequently purchased during the prior calendar year.
“If the program could start December 1, November 30…that would allow farmers access to those funds for a slightly longer period of time,” notes Gallant.
When asked about the federal government’s openness to implementing changes under a new agriculture minister, Gallant says he can recall advocating for these ideas a decade ago.
“They don’t move very fast. There hasn’t been a lot of incentive. The department today, or up until recently, has been very risk averse in its approach to dealing with the issues that we are putting on the table that affect farmers cash advances. Will that change under the current government structure? I’m hopeful, but we have to wait and see.”
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