The Alberta Government says it is trying to reverse a trend in the agricultural industry.
Officials say in the last two decades, the amount of young and middle-aged producers in agriculture has seen a “steep decline”, while the number of farmers over 55 has gone up.
The province aims to address that trend by making changes to Agriculture Financial Services Corporation’s (AFSC) Next Generation Loan program.
The initiative offers a consistent source of fixed-rate term loans to new entrants and young agricultural producers to help them establish a farming operation.
By expanding eligibility and updating the program’s terms, the government hopes it will be easier for producers to enter and re-enter the industry. The province believes changes could create greater opportunities for new and growing operations, make succession more appealing and encourage new and young people to pursue farming.
“By updating and expanding the Next Generation Loan program, young and young-at-heart Albertans will have fewer barriers when entering Alberta’s agriculture industry,” says Minister of Agriculture and Irrigation RJ Sigurdson.
“Increasing new and returning entrants to agriculture will ensure the sector continues to be a healthy and important contributor to Alberta’s economy.”
Officials say Next Gen already offers preferential pricing with the lowest interest rates compared to all other loan programs in the ag lending market. Updates to the program will expand eligibility for interest rate incentives, lower ownership percentage requirements and increase the time available for ‘interest-only’ loan payments.
Darryl Kay, CEO of AFSC says the changes are key to the long-term sustainability and growth of the provincial agriculture industry.
“I’m proud that AFSC will be here to assist these new and beginning farmers as they get started in farming and build on the work of earlier generations,” Kay states.
With the updates to the program:
Producers of any age who are entering or returning to farming are eligible for a one per cent interest rate incentive. Before, this was only available to those under 40.
Producers could receive an interest rate incentive on their total lifetime loan principal up to $1.5 million, a boost from the previous $1 million.
Applicants now require 20 per cent ownership in a farming operation, down from 25 per cent.
Eligible borrowers can make ‘interest-only’ payments on their loans for up to five years, which is up from the current two years.
The changes will take effect on September 1, 2024.
