Farmers feed the world, and farming is one of the oldest, noblest professions in Canada. However, farming can also be very expensive. There are grants, loans, and other types of funding designed to help farmers get started, develop their existing businesses, manage the inheritance of a family farm, or deal with other financial aspects of farming.
Canadian Agricultural Loans Act Program
The Canadian Agricultural Loans Act Programs guarantees agricultural loans. Essentially, the program increases access to funding for farmers by reducing risks and making lenders more willing to approve loans. You may apply through your bank, credit union, caisses populaires, or an Alberta Treasury Branch, and the lending institution applies for the guarantee and handle the paperwork with CALA. Full-time, part-time, new, and experienced farmers may all use this program. The maximum loan amount is 500,000 for purchasing land, buying buildings, and repairing buildings, and you may borrow up to $350,000 for all other purposes including buying equipment and consolidating other loans. Co-ops may qualify for guarantees on loans worth up to $3 million, but the co-op’s ownership must be majority farmers.
AgriInvest incentivizes farmers who save money. If you deposit funds into your AgriInvest savings account, the government matches the deposits up to $15,000. For example, if you deposit $10,000 into this savings account, the government also deposits $10,000. However, if you deposit $50,000, the government only matches the first $15,000. You may deposit up to 100% of you annual net sales, and you can withdraw the money as needed to cover income shortfalls or to make investments that reduce risks around the farm. In Quebec, the program is called La Financière agricole.
If you are working on research and development or on getting your agricultural products ready for the market, you may want to look into the AgriInnovation Program. The program offers a grant or non-repayable contribution worth up to $5 million for research and development, and it offers repayable contributions up to $10 million for commercialization of products. Designed to reward innovation, this program started in 2013 and ends March 21, 2018.
The AgriMarketing program is not exclusively reserved for farmers; it covers businesses in the agriculture, agri-food, fish, and seafood sectors. The program offers up to $250,000 to for-profit organizations and up to $2.5 million to nonprofit organizations. Funding is earmarked to help export your products into foreign markets, but participants must contribute a substantial portion of their necessary funding on their own. The program has limits on annual sales and number of employees you can have, but the criteria varies depending on whether you are for-profit or nonprofit organization. Alternatively, the CanExport program also offers up to $99,999 in funding for developing export markets for all kinds of businesses, including farms.
AgriMarketing Assurance Systems Steams
Exclusively for nonprofit organizations, the AgriMarketing Assurance System Stream has funding for organizations focused on developing food safety techniques, enhancing livestock or plant traceability, or working on quality standards. Typically, eligible participants include farmers focused on experimentation and research rather than just food production. To qualify, your work should primarily relate to developing national standards, managing traceability databases, or integrating national assurance tools. Funding is worth up to $1 million, but your organization must contribute at least 25% of the total costs.
Canada Business Network
The Canada Business Network is not a loan or grant program. However, this government organization maintains an extensive database on grants and loans for all kinds of small business owners including farmers. There are grants for farmers as well as for businesses in other industries. Additionally, you can find grants for Aboriginal business owners, women, and other minority groups. If you are looking for startup financing, loans, or grants through federal or provincial programs, you should check with this resource on a regular basis.
In addition to national programs and resources, there are provincial organizations that offer Canadian farming grants and agricultural loans. In Quebec, Appui pour la conversion à l’agriculture biologique provides funding to farmers who want to transition from conventional to organic farming. If you farm in Saskatchewan and you want to develop your skills, the Farm Business Development Initiative has funding for training or hiring a consultant. FarmNEXT in Nova Scotia provides a $30,000 interest rebate on loans for new farms. Essentially, if you make payments on a farming loan, you get a rebate of the interest paid, and the program also provides coaching and financial management advice. Other provinces have similar programs. With the high cost of machinery and the need for lots of land and buildings, farming can get expensive. To keep costs down, you may want invest time researching and applying for low-interest agricultural loans, grants, and other types of funding.