Farm Credit Canada is setting aside $500 million to loan to
farmers less than 40 years old.
Agriculture Miinister Gerry Ritz said “encouraging young farmers
to invest wisely and contribute to a prosperous, modern sector is not only good
for agriculture but good for Canada.”
I hope FCC increases its provisions for bad loans to cover this new, risky venture.
“Agriculture
is a key driver of jobs and economic growth here in Canada, and young farmers
are vital to the long-term prosperity of the agriculture industry,” Ritz said.
Young
farmers will be eligible to borrow up to $500,000 to purchase or improve land
and buildings, said FCC president Greg Stewart.
I wonder if it's significant that he did not mention quota. And I wonder how this enhances the FCC's practice of sometimes lending up to the full purchase price for land.
The
loans are available at interest rates as low as prime plus half of one per
cent. That, of course, is courtesy Canadian taxpayers who back the government loans to the FCC.
There
will be no loan-processing fees. So guess who will cover the administrative costs that don't disappear simply because the FCC doesn't charge a fee.
The
FCC will also sell life insurance and accident insurance to those who want it. Some private-sector mortgage lenders don't give borrowers that choice.
It's long past time that the government unloaded the FCC into the private sector. Surely taxpayers have shouldered enough risk and writeoffs already.
Ontario
had a loan program for young farmers that was introduced during the 1952-53 fiscal year and was called the Junior
Farmer Establishment Loan Program.
The loans were
granted by a crown corporation and were backed by Ontario government bonds.
Maybe Ritz and Stewart should research the reasons why the program was
terminated in the 1990s.
