The wheat cash advance that once took hours to obtain through the Canadian Wheat Board is taking weeks through the Canadian Canola Growers Association, Fisher Branch farmer Bill Uruski says.
“It has been a nightmare,” Uruski said in an interview from his farm May 4.
Uruski, who farms with his son Barclay, said Barclay applied for an advance April 1 and still hadn’t received it more than 30 days later.
“As a result we’ve been forced to seek a line of credit from our credit union,” he said.
The wheat board started issuing cash advances for wheat in 1957. Last Sept. 29 the federal government announced the canola growers’ association would administer advances “so that wheat, durum and barley farmers have access to the Advance Payments Program without disruption,” when the board loses its monopoly marketing powers this Aug. 1.
The association started administering spring advances for wheat April 1. There is no backlog, said Rick White, general manager of the Canadian Canola Growers Association. If forms are correctly filled out, farmers get their money in three to five business days.
“I’ve heard this before from farmers about taking so long to get their cheque but every time we look into it it’s always because there’s been something either forgotten or missed by the farmer, or there’s been a problem with their credit check or something,” White said May 7 in an interview.
Under the wheat board, farmers could get advances of $100,000 or less, often the same day they applied through an elevator agent, White said. But that’s because the board, with its monopoly, could recoup the money by seizing interim or final payments.
“We have to do our due diligence before we issue the cheque,” White said.
Wheat board advances of more than $100,000 had to be processed at the board’s head office in Winnipeg.
Barclay Uruski said two things on his application were filled out incorrectly. They were brought to his attention a week after he applied. The form was corrected and faxed back to the canola association. But it still took two weeks for the advance to arrive. It finally came May 4.
Uruski is critical of the association’s form. Some parts, such as links to crop insurance, were automatic, on the wheat board’s form, he said.
“The whole process was so simple before,” Uruski said. “I can see being a week later getting the advance out, but not a month.”
The canola association’s application form is the same as for the other crops it administers advances for on behalf of Agriculture and Agri-Food Canada, White said. The association delivers advances on 19 crops in Manitoba and 28 in Saskatchewan, Alberta and British Columbia.
In Manitoba, the Manitoba Corn Growers Association administers advances for corn and pulse crops.
Farmers who haven’t taken an advance through the canola association are encouraged to do so by phone the first time, White said. That way the form will be filled out correctly, then faxed or emailed to the farmer immediately to sign. Farmers can either fax the form back or scan it and email it to speed up the process.
The association has five or six employees working on telephone applications and adds more when required, he said.
“It’s very quick, very easy and we’ve had tremendously positive feedback on that process,” White said.
The association hired 18 new staff to work on advances the wheat board used to administer.
“We’re fully up and running and functioning,” he said. “Our lag time is as minimal as we can get it.”
The association has around 55 staff — 45 of whom work primarily on advances.
“We don’t have a backlog right now, but I can tell you we’ve got lots of applications where we are waiting for responses from farmers — either signatures or documentation of some sort,” White said. “And those are the ones that we can’t control.”
The canola association’s forms are almost 20 pages long, but they cover pre-seed, seeded and post-harvest advances, White said. The canola association is now a virtual “one-stop shop” for cash advances. All advances are covered under one $150 administration fee.
Under the cash advance program farmers can get loans against their crops and repay the money as they sell them.
Eligible farmers can be advanced up to $400,000, with the first $100,000 interest free. The interest rate on canola association advances is CIBC prime, which is currently three per cent.
The program, which began with just wheat board crops in 1957, was created to provide cash flow to farmers unable to deliver because of quota restrictions.
Advances on non-board crops came in the 1980s allowing farmers to store products rather than sell at depressed prices.