The Bank of Montreal is giving flooded farm clients a break on loan payments.
BMO says it will defer principal payments over the next 16 months for farmers and other agribusiness borrowers directly affected by extensive flooding across the Prairies this year.
The bank will also waive fees to renew loans and make new loan applications.
Brian Lemon, BMO’s commercial banking area manager for western Manitoba, said extensive crop losses from flooding will make farm cash flow tight this coming year and the bank wants to help.
The program is available until November 30, 2011. Lemon said farmers should start talking to their bankers once crop results are better known.
The number of producers who qualify for relief should become clearer in August once harvesting starts, he said.
Lemon wouldn’t indicate how many farm clients BMO has but said it was “lots.”
“Agriculture is a big part of our business,” he said.
The Canadian Wheat Board estimates 10.5 million acres of Prairie cropland went unseeded this year because of unusually heavy spring rains. Another 2.5 million acres that did get seeded were destroyed.
Lemon said BMO’s flood relief program is similar to one it offered Manitoba farmers after the wet summer of 2005.
BMO has become increasingly visible in the agricultural lending sector this year. Earlier this spring it issued a warning to producers about rising interest rates and a possible farm debt crunch as a result.
BMO officials urged its farm clients to talk to their local bankers and restructure debt loads to soften the impact of higher interest rates. [email protected]