The Alberta Wheat Commission (AWC) got into the cash advance business last year creating FarmCash Advance for Alberta farmers only, but it’s considering expanding to other provinces, says FarmCash chief operating officer Syeda Khurram.
That’s despite a number of other well-established grain and oilseed advance administrators, including the Canadian Canola Growers Association (CCGA), Manitoba Corn Growers Association and Manitoba Livestock. All are headquartered in Manitoba.
“Thirty per cent of our total applicants that we processed last year were new applicants who never applied before for the cash advance,” Khurram said in an interview May 12. “That showed us there was demand for new competitors, and to increase the awareness of what the cash advance can be used for.”
In its first year FarmCash issued $30 million in loans to 250 farmers. Applications this year are up 62 per cent, she said.
The CCGA lent $2.1 billion to more than 11,000 farmers in 2019.
FarmCash currently offers no- and low-interest loans to Alberta farmers against 50 different products, including grains and oilseeds, livestock and honey under the federal government’s Advance Payments Program.
Unlike the CCGA, FarmCash has not seen a delay in issuing advances due to COVID-19 or new rules on assessing creditworthiness.
“FarmCash is operating as usual and we are processing applications as we originally planned despite the COVID-19 impact,” Khurram said. “We did have to implement some measures to meet farmers’ needs for this spring season, but despite those adjustments we have maintained our fast turnaround times, which are three to five business days. Our goal is to issue the advance three to five business days upon receiving a completed application. Due to COVID we were able to transition our staff quickly to working from home.”
While the CCGA has 50 employees issuing cash advances that had to be set up to work at home due to COVID-19, FarmCash has 2.5.
There’s lots of room to increase cash advances in Alberta.
“Only 25 per cent of Alberta producers are utilizing this program,” Khurram said. “We wanted producers to leverage this program as effectively as we could to meeting their short-term cash flow obligations so seeing this increase (this year) is great.”
Khurram is certain a big part of the reason farmers are increasingly signing up with FarmCash is because so much of the process can be done online making applying easier and quicker for farmers. It also speeds up the process for staff, she said.
“This year 97 per cent of our applications are using those online features, which primarily include the e-signing application online, they can upload the required documents online,” Khurram said. “This makes the process much faster and easier for them. We are seeing a lot of producers are taking advantage of these time-saving tools…”