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By rdnewsNOW staff

Agriculture

Updates coming to Next Generation farmers’ loan program

Jul 30, 2024 | 5:41 PM

The Government of Alberta is expanding eligibility for the Agriculture Financial Services Corporation’s (AFSC) Next Generation (Next Gen) Loan program.

The move comes in an effort to address the steep decline of young and middle-aged agriculture producers over the last 20 years.

“By updating and expanding the Next Generation Loan program, young and young-at-heart Albertans will have fewer barriers when entering Alberta’s agriculture industry. Increasing new and returning entrants to agriculture will ensure the sector continues to be a healthy and important contributor to Alberta’s economy,” says RJ Sigurdson, Minister of Agriculture and Irrigation.

The government says it aims to make it easier for producers to enter and re-enter the agriculture industry, give greater opportunities to new and growing operations, make succession more appealing, and encourage new and young people to get into farming.

Provincial officials say Next Gen already offers preferential pricing with the lowest interest rates compared to all other loan programs in the agriculture lending market. The updates are expected to expand eligibility for interest rate incentives, lower ownership percentage requirements and increase the time available for “interest-only” loan payments.

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Updates to the program include:

• Producers of any age who are entering or returning to farming are eligible for a one per cent interest rate incentive, while before it was only available to those under age 40.
• Producers may receive an interest rate incentive on their total lifetime loan principal up to $1.5 million, an increase from the previous $1 million.
• Applicants now require 20 per cent ownership in a farming operation, down from 25 per cent.
• Eligible borrowers can make “interest-only” payments on their loans for up to five years, up from the current two years.

The changes will go into effect on September 1, 2024.

Government officials say that since 2001, the number of Alberta farmers under 25 has decreased by 43 per cent; numbers for those aged 35-54 has decreased by 59 per cent; and the number of farmers over 55 has increased by 32 per cent.