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March 27, 2003
MANITOBA ANNOUNCES IMPROVEMENTS TO LOAN PROGRAM FOR FARMERS
New Program Will Leverage $60 Million in Guaranteed Loans For Farm Operating Expenses, Credit Unions Brought on Board:
Wowchuk Agriculture and Food Minister Rosann Wowchuk announced today that, effective April 1, an Operating Credit Guarantee (OCG) program will be available to assist Manitoba farmers in obtaining more affordable financing arrangements for their businesses.
"This new program responds to the changing needs of farmers and the farming industry, and will assist producers who experience difficulty securing sufficient operating credit by removing some of the risk for participating lending institutions," said Wowchuk.
Through the OCG program, the Manitoba Agricultural Credit Corporation (MACC) will provide a 25 per cent guarantee on individual operating loans. MACC will guarantee operating credits of $450,000 for individuals and single shareholder corporations. Partnerships, corporations and co-operatives will be eligible for guarantees of up to $700,000.
The $450,000 maximum loan for individuals should be sufficient to cover the operating requirements of a 500-head feedlot, a 2,250-acre grain/oilseed farm, a 4,000-place hog feeder barn or a 375-acre potato farm, said the minister.
"The specialized needs of diversification such as potato production and value-added projects continue to put additional financial burdens on producers," she added. "It is essential that we are equipped to assist producers with increasing operating needs while keeping interest costs at a minimum."
The program will also ensure the interest rate charged to producers is reasonable by imposing an interest rate ceiling of prime plus 1.5 per cent.
Participating lending institutions will also be expanded to include credit unions. Previously, credit unions were unable to participate with MACC as lending institutions.
"I want to take this opportunity to welcome Manitoba credit unions as a partner in responding to the needs of Manitoba farm families," said Wowchuk.
The OCG is available to farmers who are at least 18 years of age and Canadian citizens residing in Manitoba. Partnerships and corporations must be registered in Manitoba with the majority of partners or shareholders meeting individual participant requirements. Operations must demonstrate adequate cash flow and potential viability while producers must possess the management skills necessary to run a successful operation.
Today's announcement compliments several other loan guarantee programs offered by MACC including the Bridging Generations Initiative mortgage guarantee to assist in inter-generational farm transfers, the Enhanced Diversification Loan Guarantee for long- term asset financing associated with diversification and value-added projects, and the Manitoba Cattle Feeder Association's Loan Guarantee.
Further information on MACC's guarantee programs is available on the Manitoba government Web site at: http://www.gov.mb.ca/agriculture/macc/index.html.
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