by SUSAN MANN
Ontario beef farmers will be able to buy more cattle and expand their operations now that the province is doubling the total amount of money available for government-guaranteed loans under a cattle loan guarantee program.
Ontario Agriculture, Food and Rural Affairs Minister Jeff Leal announced Wednesday the government is boosting the total amount available for the government-guaranteed loans to $260 million. Previously there was a total of $130 million available for the government-backed loans.
The change is effective immediately, he said during the announcement at Queen’s Park in Toronto, just before the Beef Farmers of Ontario’s 12th annual beef barbeque. More than 700 members of provincial parliament and staffers were served Ontario corn-fed beef tenderloin during the event, says LeaAnne Wuermli, Beef Farmers spokesperson.
The government guarantee is used to help cattle feeder co-operatives across the province negotiate a credit limit with a lender. The co-operatives help members finance buying cattle for further feeding, according to a Beef Farmers online fact sheet.
“The (Ontario Feeder Cattle Loan Guarantee) program is backed by a 25 per cent government guarantee,” said Wuermli.
The guarantee kicks in if a co-op member defaults on a loan and the co-op isn’t able to cover the loss. The co-ops obtain security deposits from members when they get loans and that money is used to cover any losses, if necessary.
“Increasing the government guarantee provides more assurance to the lenders to provide more money to the co-ops,” she said.
Wuermli didn’t know how many more cattle farmers would be able to buy as result of the change to the program.
However, in 2015, the 915 members of the 17 feeder cattle co-operatives across Ontario bought 85,107 head of cattle under the Ontario Feeder Cattle Loan Guarantee program.
A total of $120 million in loans was committed in 2015, Wuermli said.
The change announced Wednesday, something Beef Farmers has been lobbying to get for a few years, is great news for the beef industry, and particularly for younger farmers. She said about one-third of the co-ops’ members, or 351, were under the age of 40 last year.
Wuermli said the feeder cattle loan guarantee program is an important program for young farmers. “We’re looking at the next generation and providing those tools for new and beginning farmers that want to enter the business but need help with financing.”
A board of directors operates each feeder cattle co-op and also negotiates a credit limit with a lender to help members buy cattle for further feeding, according to a Beef Farmers online fact sheet.
The boost in total government-guaranteed loans under the program will also help Beef Farmers with its project to expand the Ontario herd across the province, and particularly in northern Ontario.
“Having more available financing for members who are interested in expanding, or at least maintaining their herds, definitely will support cow herd expansion,” she said.
According to the Ontario agriculture ministry’s press release, there has never been a claim against the government guarantee in the 25-year-history of the program. It was established in 1990 to help farmers access low-interest loans to expand their business and remain competitive. BF