As Manitoba hog farmers struggle to repay their federal advance payment loans, another loan repayment deadline is looming.
Over 130 provincial loans worth more than $40 million will start coming due for hog producers next April.
Many producers are having trouble with their long-postponed advance payments and may find it even harder to repay loans from the Manitoba Agricultural Services Corporation.
“With all the debts they’ve got, they’re facing a major problem in terms of being able to pay these loans off quickly,” said Andrew Dickson, Manitoba Pork Council general manager.
TALK TO LENDERS
The pork council is urging producers to discuss repayment schedules with MASC agents before payments start coming due in April.
“If they can’t meet their scheduled payments, they’re going to have to negotiate something on an individual basis,” Dickson said.
MASC introduced the Manitoba Hog Assistance Loan program in 2008-09 to provide hog and weanling producers with emergency cash because of severely depressed market prices.
The $60-million program offered special terms, including no principal payments for three years.
Producers could borrow $35 per slaughter hog and $10 per weanling based on sales made between Oct. 1, 2007 and May 31, 2008.
The eligible loan maximum was $5 million with an eight-year term. Repayment, which starts in April 2011, is amortized over five years on a sliding interest scale.
In all, 137 producers took out loans worth $42.7 million, according to MASC’s 2009-10 annual report released in early October.
Kevin Craig, MASC’s acting vice-president of lending operations, said the agency expects its loans to be repaid but will handle cases individually.
“We’ll deal with the situations as they come,” Craig said.
The $42.7 million owing to MASC comes on top of $28.6 million which 150 Manitoba hog producers owe the federal government through the advance payments program (APP).
Ottawa has postponed the deadline for repaying APP loans several times through a stay of default. An October 2010 deadline was extended by 18 months to May 31, 2012. Producers now have until May 2013 to repay APP in full.
Dickson said the pork council, which administers APP in the West, is urging producers to come in and negotiate repayment settlement if they can’t pay off their APP by 2013.
The amount of money hog producers owe to other lenders – banks, credit unions and suppliers – isn’t known but is said to be staggering. [email protected]
“We’lldealwith thesituationsas theycome.”
– KEVIN CRAIG, MASC