Cashing in: the history of the cash advance in Manitoba
Corn was the first non-Wheat Board crop in Manitoba to qualify for the federal government’s cash advance program starting in 1981.
Jim Pedersen, who was then president of the Manitoba Corn Growers’ Association, helped form the association – a prerequisite for administering the program which offers low interest or no interest loans to farmers using crops sown and stored as collateral.
This effort inspired Carman-area farmer Charlie Froebe to do the same for canola, starting in 1984, on behalf of the Prairie Canola Growers’ Council, which later became the Canadian Canola Growers Association. (CCGA).
Corn growers are now part of the Manitoba Crop Alliance, which continues to administer advances on corn as well as a number of other crops.
The CCGA currently administers advances on 55 products, from crops to livestock to honey.
“Overall, I think it’s a pretty good program,” said Pedersen, who has been a farmer for 50 years near Elm Creek, in a March 16 interview. “I participated in it every year. It has been a good program. It is well managed. “
Pedersen downplays his role, pointing out that he was just chairman at the time, and credits the board with being forward thinking.
“They were my mentor,” he said.
The cash advance program began in 1957 for wheat, durum, barley and oats marketed through the Canadian Wheat Board. Under this sales system, farmers could only deliver when the board brought the grain into the elevators. Cash advances were designed to help with cash flow.
The program was offered on off-board crops in eastern Canada in 1977. Soon, western farmers lobbied for this option.
Although off-commission crops can be delivered at any time, farmers argued they can keep crops until prices improve rather than crash selling to get money to pay the bills. in autumn.
“I’m sure it has helped a lot of people and smoothed the cash flow,” Pedersen said. “I would call it a success story. We had administrators running the program and doing a very good job.
The program continues to be well managed, he added.
Froebe admits he had no idea how big the program was. He and his wife Bonnie administered it on behalf of the Prairie Canola Growers’ Council and then the CCGA.
For several years, they took him out of their homes.
“We had to move (to an office in Carman) because we couldn’t have any more employees in our living room,” Froebe said in an interview on March 17.
“At that time there was no Excel… so I had to do my own computer programming. “
The Froebes were also farmers until 1996.
“I don’t know how we did this,” Froebe said. “Either way, we did it.”
In 1999, in addition to canola, the Froebes administered advances for corn, rye, flax and oats.
When they retired at the end of 1999, the Froebes had 13 more employees, loaned $ 200 million a year, and had retained earnings on behalf of the GCAC of $ 1.5 million. dollars.
But not everyone thought the advances were a good idea, Froebe said. Critics believed it would disrupt the market.
“I said, ‘that’s the whole problem.’ Instead of these guys (buyers) getting cheap canola at harvest time, they might have to pay money for it, ”Froebe said.
“It’s no different from an individual who just withholds his harvest because he wants to. In that case, he can pay his taxes and his fertilizer bill and other things that come in the fall and still hang on to his crop and eat.
The cash advance program has undergone many changes over the past 64 years since its introduction by the Progressive Conservative (PC) government of John Diefenbaker.
In 1989, the PC Mulroney government cut the interest-free portion of the program, but increased the amount farmers could borrow at low interest rates.
Corn growers added advances on pulses and soybeans in 1994 and 2001.
In 1996, the Liberal Chrétien government combined separate cash advance laws and reinstated interest-free loans.
Spring advances on seeded crops were introduced in 1999 and advances for livestock were added in 2006.
The CCGA took over the Wheat Board’s advances in 2011 and added even more crops in 2015.