Farm Credit Canada came through the recession of 2009 with impressive results but is keeping a close watch this year on its customers in the rain-saturated areas of Western Canada.
Dan Bergen, FCC’s chief operating officer, said in an interview farmers whose crops were lost or never got planted this spring because of excessive rainfall “should start planning now for dealing with the revenue shortfall when they have no crops to sell this fall and winter.
“This is the time to talk to their creditors and financial institutions about how to deal with payments that will come due,” he suggested. FCC is contacting its clients on the Prairies whose crops may have been adversely impacted by the weather. “We want to help people work through until next spring.” The weather was part of the normal ups and downs of farming.
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Roland Kirouac, FCC district director in Steinbach, said dairy and other livestock producers in Manitoba may have challenges finding sufficient high-quality feed for their animals. Unlike Saskatchewan and southeastern Alberta, most of the Manitoba planting was complete before the rains came thanks to an early spring. In recent weeks, the crops have started to look better in some areas.
During the fiscal year ending March 31, 2010, FCC approved more than 38,500 customers for loans in fiscal 2009-10, which grew FCC’s portfolio to $19.7 billion. More than $1.8 billion was lent to farmers under the age of 40.
FCC says farm debt levels have continued to increase, partly because of low interest rates, customers continue to make their payments and arrears levels have remained low with 97.7 per cent of loans in good standing, slightly better than 97.5 per cent last year.
“FCC has come a long way from being only the lender of last resort,” said Richard Phillips, executive director of the Grain Growers of Canada. “With its focus on agriculture they are ahead of the major banks in really understanding farmers’ needs.”
Bergen said that after an iffy start in 2009, the Prairies had a good year, except for pork farmers, thanks to an open fall, which allowed farmers to harvest late. The cattle industry also struggled as it continues to climb out of the crisis caused by BSE.
While it is still a small part of FCC’s lending portfolio, there was increased interest in alternate energy loans last year especially from Ontario where the province started a program to encourage solar and wind power on farms, Bergen said. FCC doesn’t advocate for alternate energy, but tries to keep its field representatives up to speed on the topic so they can answer questions from farmers about whether alternate energy makes sense for their operation.
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“FCChascomealongwayfrombeing onlythelenderoflastresort.”
– RICHARD PHILLIPS, EXECUTIVE DIRECTOR OF THE GRAIN GROWERS OF CANADA
