A farmer drives a seeding rig as he plants a canola crop on their family's farm near Cremona, Alta., on May 16, 2023.--NEWS FILE PHOTO
asmith@medicinehatnews.com
The province of Alberta is looking to further incentivize the new generation to pursue careers in agriculture with changes to the Next Generation Loan Program.
Over the past 20 years, the number of young and middle-aged producers in agriculture has seen steep declines, while the number of farmers over 55 has increased, according to the Government of Alberta. To help incentivize a reversal of this trend, the province has made changes to the Agriculture Financial Services Corporation’s Next Generation Loan Program.
“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,” said RJ Sigurdson, Minister of Agriculture and Irrigation. “Increasing new and returning entrants to agriculture will ensure the sector continues to be a healthy and important contributor to Alberta’s economy.”
Expanding eligibility and updating Next Gen’s terms will make it easier for producers to enter and re-enter the agriculture industry, the province says, by giving greater opportunities to new and growing operations. It is the hope this will incentivize succession in farm families, and attract new and younger people to enter this vital industry.
“The changes to the Next Generation Loan program are key to the long-term sustainability and growth of Alberta’s agriculture industry,” said Darryl Kay, CEO of the Agriculture Financial Services Corporation. “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.”
The Next Generation Loan program already offers preferential pricing and low interest rates, compared to other loan programs in the ag lending market. These updates will expand eligibility to include producers of any age, either new or returning.
Previously, these rates were only available to those under the age of 40.
In addition, producers may receive an interest rate incentive on their total lifetime loan principal up to $1.5 million, an increase from the previous $1 million.
Applicants now only require 20 per cent ownership in a farming operation, as opposed to the previous 25 per cent, and eligible borrowers can make “interest-only” payments on their loans for up to five years, which is up from the current two years.
“Alberta’s government understands that producers need stable sources of capital to manage and grow their operations and help them weather economic challenges,” said the province.
“Succession planning is front of mind for farmers, especially as we expect to see a growing number of farms transition to the next generation over the next several years,” said Scott Jespersen, vice-chair of Alberta Grains. “Programs like this that help reduce barriers for new and next generation farmers, help to ensure the viability of the crop sector in Alberta into the future.”
Changes will come into effect on Sept. 1.
