FarmCash — more than short-term financing

Written by Richard Kamchen

More than a short-term loan, FarmCash is a management tool that can give producers breathing room, peace of mind and the ability to expand their operations.

FarmCash is one of the lowest-cost financing options for producers to seed, fertilize and protect their crops during the growing season, according to Tom Steve, general manager of the Alberta Wheat Commission, which administers the cash advance program.

With FarmCash, producers of a wide variety of commodities can maintain healthy reserves in their bank accounts in order to cover unexpected expenses — without incurring high interest charges, Steve says.

Producers can apply for up to $1 million on over 50 agriculture commodities, including all major crops, livestock and honey. Up to $100,000 is interest-free on all commodities, with the rest at the competitively low interest rate of TD prime minus 0.75 per cent.

“FarmCash can be used to time purchases of crop inputs at optimal prices and better manage their tax position,” Steve explains. “Farmers have used FarmCash to time the sale of their crops when markets are favourable, instead of being forced to sell at market lows to pay off bills.”
FarmCash has taken a leadership role in promoting the Advance Payments Program as a farm business management tool.

“We believe it has been underutilized as part of producers’ overall business strategy, and are committed to getting the word out on how it can be used as more than short-term emergency financing,” Steve says.

Growing your operation

FarmCash chief operating officer Syeda Khurram describes the cash advances as “good debt,” as it helps farmers grow and generate profit for their operations over the long term.

She explains FarmCash allows producers to expand and optimize their overall operations. Thanks to the benefit of its low interest rates, it can contribute to increasing farm value by giving producers the ability to make continuous investments.

“FarmCash acts as an investment tool that maintains and improves the depreciated value of farm assets, and increases purchasing power to buy capital assets such as a grain dryer or a sprayer,” Khurram says.

It also helps producers focus on operational management practices, like transition/succession planning, farm growth and cash flow planning, she says.

“It sustains long-term viability of farming operations, and even helps in succession planning by providing financial stability for retiring farmers, and growth opportunities for successors.”
Khurram says the FarmCash business plan is based on a brand-new business management vision for producers. FarmCash isn’t just offering a financing tool, it’s raising awareness on how producers can best utilize its benefits to preserve and improve their farm business values for today and for future generations.

“One of the benefits of the program is that it allows for the continuous investment that farms require,” she says.

Producers inquiring about their eligibility or available commodities can call 1-855-376-2274 or email farmcash@albertawheat.com.

AWC cash advances now available throughout West

For the first time, the FarmCash Advance Payments Program is expanding outside Alberta, and producers in B.C., Saskatchewan and Manitoba can apply starting March 15.

“The program is the same across all four western provinces, with a value proposition based on a high level of customer service, ease of use through the online application form, and a quick turnaround time of advancing funds within three to five business days from receiving a completed application,” says FarmCash chief operating officer, Syeda Khurram.

Administered by AWC, FarmCash was launched in Alberta for the fall 2018 advance. Its online platform was designed to be scalable to other provinces, but AWC first wished to test the model before expansion.

Khurram notes that expansion provides access to a larger customer base, and that by spreading its costs over more customers, FarmCash can remain competitive on its interest rates and service.

“The cost savings offered through our low interest rate of TD prime minus 0.75 per cent on the interest-bearing portion of the loan, and our free application, help producers save money and boost their bottom line,” Khurram says.

FarmCash’s free and convenient online application can be found at FarmCashAdvance.com.
Known for its excellent customer service, FarmCash issues timely advances that enable farmers to conduct their business without any delay, says Khurram.

FarmCash financials are fully transparent and are reported in AWC's annual report. Any proceeds from FarmCash will be reinvested for the benefit of the agriculture industry, Khurram says.

The Advance Payments Program is a federal loan program administered by the Alberta Wheat Commission. It offers Canadian farmers marketing flexibility through interest-free and low interest cash advances.

Originally published on March 18, 2021 in the Western Producer.

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