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Written by Richard Kamchen
A made-in-Alberta farm business tool offers low interest rates, improved profitability, increased marketing opportunities, simple administration and efficient customer service.
Alberta producers can access up to $1 million through FarmCash, the cash advance program administered by Alberta Wheat Commission (AWC) on behalf of Agriculture and Agri-Food Canada. It offers the first $100,000 interest-free, with the remainder at a low interest rate of TD prime minus 0.75 per cent.
“We pride ourselves in a high level of customer service, an easy-to-navigate online application, and a quick turnaround,” says AWC general manager Tom Steve. “Producers can receive funds in as little as three to five business days of completing their application.”
FarmCash covers over 50 commodities, including all major grains, oilseeds, specialty crops, cattle and honey.
Marketing advantage
Steve says the program allows farmers to time their grain sales when it’s to their advantage.
“Forward contracts often provide more attractive prices in future months and spot delivery contracts. FarmCash financing allows producers to cover short-term expenses and market their grain at the optimum price.”
By helping producers leverage the best market prices, FarmCash not only recovers operating costs, but also improves net profit margins to maintain a healthy equity position, explains FarmCash chief operating officer Syeda Khurram.
“It allows farmers to store grain and sell it when the price is most favourable for them,” says Khurram, also AWC’s chief financial officer and director of human resources.
Cash flow
One of the biggest financial stressors for producers is the variability in market prices.
To deal with this major risk to their bottom line, farmers require the right cash flow management tools as part of their cash flow planning, Khurram says.
“FarmCash serves as a cash flow management tool for producers by giving them relief in a tight cash flow position, and provides flexibility to their marketing plan.”
It helps producers pay for their expenses such as seed, fertilizer, chemicals, labour, management and administration, on time and without late payment penalties.
“FarmCash provides the opportunity to meet short-term financial obligations for long-term profitability,” Khurram says.
Beyond market prices, producers’ revenues also rely heavily on unknown factors like yield, weather conditions and other barriers such as railway movements and trade tariffs.
“FarmCash helps producers navigate these uncertainties by maintaining their projected farm growth,” Khurram says.
More than a cash advance
She adds the program contributes to the strength and future sustainability of farming operations.
“It is a business management tool that maintains farm reserves and stabilizes future farm income.”
Through its low interest rates, producers can develop a robust farm succession plan by taking calculated risks and making strategic investment decisions, especially at the time of land transfer, she says.
“The low interest rate really helps young producers to maintain the long-term net worth of the farm.”
To reduce administration, AWC has streamlined the application process by launching an online application with innovative tools at FarmCashAdvance.com.
“Ninety-seven per cent of our applicants are submitting applications online by uploading their required documents and electronically signing their application. It saves them time and money,” Khurram says.
Another competitive advantage of FarmCash is its high level of customer service, she adds.
And by issuing timely advances in as little as three to five business days, FarmCash addresses emerging needs and changing economic trends, which enables farmers to conduct business effectively.
“We don’t want farmers to wait long for cash to meet their immediate cash flow obligations. The systematic solutions we have established speed up the process to release the advances faster,” Khurram says. “We have developed sustainable solutions for farmers and are very proud to see that they are taking advantage of time-saving tools that escalate their profitability at a higher rate.”
Farmers inquiring about their eligibility or available commodities can call 1-855-376-2274 or email farmcash@albertawheat.com
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 October 15, 2020 in the Western Producer.
