May 18, 2020

Canadian farmers and agribusinesses claim government credit line

Most of the 5 billion CAD (~US$3.55 billion; 1 CAD = US$.071) offered by the Canadian government has been claimed to boost cash flow during COVID-19 in less than two months, reported Reuters.

According to Canada's federal agriculture ministry, about 4,800 farmers and agriculture related businesses have taken up options to postpone loan payments of about 4 billion CAD (~US$2.84 billion) and started credit lines valued at 500 million CAD.

On March 23, Farm Credit Canada (FCC, a government agriculture lender) boosted lending capacity by 5 billion CAD.

Canadian farmers have been hit hard by the COVID-19 pandemic, as meat processing plant closures (due to the pandemic) have created a livestock backlog even though prices have soared for meat.

The Western Canadian Wheat Growers said farmers for grain and oilseed are also affected by the pandemic, with crop delivery contracts cancelled or delayed because of changing processing demands.

Spring season is the most expensive time for crop farmers as it's the time to obtain seed and fertiliser for summer crops.

The government will be establishing a 100 million CAD fund through the FCC and Forage Capital, a venture capital firm to assist agriculture companies.

Canada is major global exporter for grains and meat.

-      Reuters