Meg Deak
Local Journalism Initiative Reporter
Woolwich Observer
Global instability has made extra challenges for Ontario farmers this year, with rising fuel and fertilizer costs. In response, Farm Credit Canada and Agriculture and Agri-Food Canada have taken measures to offer more financial support to farmers.
Federal Agriculture Minister Heath MacDonald last week announced that the interest-free limit of the Advance Payments Program would remain at $250,000 for the 2026 program year for all non-canola advances. This extends the enhanced limit from 2025, which also allows up to a $500,000 interest-free loan for canola-specific advances.
The loan guarantee program run by Agriculture and Agri-Food Canada provides Canadian farmers with low-cost cash advances of up to $1 million per program year. Typically, producers receive $100,000 in interest-free loans, but the limit was raised last year due to additional challenges facing farmers, such as higher input costs and inflation.
“As Canadian producers get ready for the growing season, our government is making sure they have the support and tools they need,” MacDonald said in a release.
“By increasing the interest-free portion of the Advance Payments Program, we’re helping farmers manage costs, while giving them more flexibility to market their products on their terms.”
The Advance Payments Program is used by many farmers and agricultural groups, such as the Ontario Beef Farmers (BFO), who were happy to see the government raise the interest-free limit.
“Alongside our partners across agriculture, we continue to call on the federal government to raise the interest-free portion and make it permanent to better support farmers,” explained Jason Leblond, BFO President, in a release.
According to the BFO, 607 farmers accessed just under $93 million in loans through the program in 2025.
Beyond the maintained limit increase for the Advance Payments Program, other organizations, such as Farm Credit Canada (FCC), have made changes to offer more financial support to farmers.
On March 20, the FCC announced that it was expanding its Trade Disruption Support Program, allowing farmers access to an additional credit line of up to $500,000,as well as new term loans.
While farmers need financial support amid steep increases in input costs, some agricultural experts are skeptical of how effective these moves are at actually addressing the agricultural issues.
“I don’t know if digging a bigger hole is ever going to be the right solution. So that’s certainly going to enable farmers that are maybe in a tight financial situation to purchase the fertilizer [they need], but that’s not going to help,’’ said Steve Lake, Ontario Grain Farmers’ director for District 10 (Grey, Bruce, Wellington), talking about the FCC financial supports.
Farmer debt has been increasing in Canada for the past two decades. Preliminary data from Statistics Canada at the end of 2025 revealed that farmers in Canada had $166.71 billion in debt by the end of 2024, marking a 14.1 per cent increase from the previous year, the largest annual rise since 1981. The majority of the debt was owed to banks ($64.6 billion), followed by federal government agencies and credit unions. At the same time, the realized net income for Canadian farmers fell by 26 per cent in 2024.
Lake added that borrowing more money as a farmer carries added risk, because even if you invest in your farm’s production, there is no guarantee you will have a good crop at the end of the season. The steep increase in input costs over a short period increases the risk.
“Nothing is certain about what we’re going to get for our product at the end of the day. [And] the price that we get for our commodities that we’re growing hasn’t gone up at that same rate. So available credit is just a piece of the pie. But having the ability to sell your product for higher than your cost of production is a crucial piece of the equation,” said Lake.
“I’m not sure that there’s something that we can do here locally or here at home to negate those increasing costs, but I think it’s very important for consumers to be aware of the pressure that is out there on their local producers and the pressure that’s not just likely for 2026 but the pressure that could be on their food supply over the course of the next couple of years, depending on how long these conflicts persist for that’s the biggest thing.”
