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Advance Payments Program (APP) - Q&ASecurity through AgriStabilityAgriStability Reference Margin (estimated) - 10,000Government share of producer’s protection level – 66.5% (maximum coverage underAgriStability)Total AgriStability Security – 10,000 X 66.5% 6,650In this example, the lesser amount is the amount secured through AgriStability. Theproducer would be eligible for a total cash advance of 6,650. The advance would beissued in two instalments with the first instalment, based on intended seeded acreage,representing 60% of the estimated total AgriStability security ( 6,650 X 60% - 4,200).For the second instalment, the total advance would be recalculated to confirm theacreage actually seeded.Example 3: Non storable agricultural productsAPP Eligible AdvanceRate of advance per Unit: 100/lbNumber of production units – 100 lbsEligible cash advance - 100/lb X 100 lbs. 10,000ORSecurity through AgriStabilityAgriStability Reference Margin (estimated) 10,000Government share of producer’s protection level – 70% (maximum coverage underAgriStability)Total AgriStability Security 7,000In this example, the lesser amount is the amount secured through AgriStability. Theproducer would be eligible for a total cash advance of 7,000.2. If you do not see your commodity listed on any of the APP administrator’s websitesplease contact one or more of the administrators directly. They will work to determine ifyour commodity is eligible for an advance and if not they will provide you with alternativesuggestions.3. Though application processing time can vary from administrator to the next, the length oftime it that it will take for a producer to receive funds into their accounts after thesubmission of a complete APP application form is generally 10-14 business days.However, high application volumes and incomplete APP application forms may result indelays.For more information on service standards please contact the APP administrator towhich you are applying for more detail.4. Yes, cattle are eligible for an advance under the Advance Payments Program.Producers can receive an advance on calves, feeders, fed animals and breeding stock(intended for sale only).6

Advance Payments Program (APP) - Q&AHowever, producers cannot use WLPIP as security for breeding stock as WLPIP doesnot provide coverage for this commodity type.5. The APP is administered by approximately 60 producer organizations on behalf ofAgriculture and Agri-Food Canada (AAFC). A full list of all the participating producerorganizations in Canada is available on the APP Website at http://www.agr.gc.ca/app. Ifyou are interested in receiving an APP Advance, you can use this list to find aparticipating APP Producer Organization near you.Crop Insurance Questions1. How is the cash advance amount determined?2. I have a perishable commodity; do I still need to provide proof of sale?3. My commodity is not listed on your website can I still apply for APP? And who doI contact?4. How long does it take to get the money?Crop Insurance Answers1. In the agreement between AAFC (Agriculture and Agri-Food Canada), the producerorganization and the lender a rate of advance is determined for each eligible agriculturalproduct and cannot exceed 50% of the average market price that the Minister estimateswill be payable to producers of the agricultural product in that area.For storable agricultural products or livestock, the producer organization will multiply therate of advance by the number of production units held in storage by the producer.For agricultural products still in production, the eligible advance is calculated as abovebut may be limited by the maximum amount the producer could receive under theeligible BRM (Business Risk Management) program that is used as security on theadvance. Also, the advance would be issued in two instalments with the first instalment,based on intended seeded acreage, representing 60% of the estimated total AgriStabilitysecurity and the second instalment, the total advance would be recalculated to confirmthe acreage actually seeded and the instalment would be the remaining balance of theeligible advance.Example 1: Stored agricultural products (e.g., crop after harvest)Rate of advance per Unit: 2.00/cwtNumber of production units in storage – 20,000 cwtEligible cash advance - 2.00 X 20,000 cwt 40,000Example 2: Product in preproduction (e.g., crop prior to harvest)APP (Advance Payment Program) Eligible AdvanceRate of advance: 2.00/cwtNumber of production units expected to be produced – 100 acres X 90 cwt/acre – 9,000cwt (estimated)7

Advance Payments Program (APP) - QÆible cash advance - 2.00 X 9,000 cwt - 18,000ORSecurity through AgriStabilityAgriStability Reference Margin (estimated) - 10,000Government share of producer’s protection level – 66.5% (maximum coverage underAgriStability)Total AgriStability Security – 10,000 X 66.5% 6,650In this example, the lesser amount is the amount secured through AgriStability. Theproducer would be eligible for a total cash advance of 6,650. The advance would beissued in two instalments with the first instalment, based on intended seeded acreage,representing 60% of the estimated total AgriStability security ( 6,650 X 60% - 4,200).For the second instalment, the total advance would be recalculated to confirm theacreage actually seeded.Example 3: Non storable agricultural productsAPP Eligible AdvanceRate of advance per Unit: 100/lbNumber of production units – 100 lbsEligible cash advance - 100/lb X 100 lbs. 10,000ORSecurity through AgriStabilityAgriStability Reference Margin (estimated) 10,000Government share of producer’s protection level – 70% (maximum coverage underAgriStability)Total AgriStability Security 7,000In this example, the lesser amount is the amount secured through AgriStability. Theproducer would be eligible for a total cash advance of 7,000.2. According to the Act, the Minster may designate certain products as not requiring proofof sale. Generally speaking, this is intended to designate perishable products, as theyonly have a short “shelf” life and would have to be sold within a certain period afterharvest anyways. In most cases, however, this also means that these perishableproducts have a shorter repayment period for the purposes of the program as well.To know exactly which products have been designated, we recommend that you contactyour administrator.3. If you do not see your commodity listed on any of the APP administrator’s websitesplease contact one or more of the administrators directly. They will work to determine ifyour commodity is eligible for an advance and if not they will provide you with alternativesuggestions.8

Advance Payments Program (APP) - Q&A4. Though application processing time can vary from administrator to the next, the length oftime it that it will take for a producer to receive funds into their accounts after thesubmission of a complete APP application form is generally 10-14 business days.However, high application volumes and incomplete APP application forms may result indelays.For more information on service standards please contact the APP administrator towhich you are applying for more detail.WLPIP Questions1. Are cattle eligible for an advance under the Advance Payments Program?2. Where do I apply for a cattle Advance?3. When do I have to repay my cattle advance?4. How much do I have to repay when I begin to sell my commodity?5. Do I need financial security to apply for an advance?6. What type of Security do I need for a Cattle Advance?7. Why is my advance rate different when I use WLPIP as security vs AgriStability?8. What do I need to provide the APP Administrator if I want to use WLPIP as mysecurity?9. Can I get an APP Advance before I have purchased a WLPIP contract?10. Do I still need to be in AgriStability to get an APP Advance?11. What happens if I cannot get a WLPIP contract long enough for me to market myanimals?12. Does having an APP advance affect when I can make a claim under WLPIP?13. When I make a WLPIP claim what happens to my WLPIP payment?14. What happens if I want to keep my animals and not sell them?WLPIP Answers1. Yes, cattle are eligible for an advance under the Advance Payments Program.Producers can receive an advance on calves, feeders, fed animals and breeding stock(intended for sale only).However, producers cannot use WLPIP as security for breeding stock as WLPIP doesnot provide coverage for this commodity type.2. The Advance Payments Program is delivered by various producer organizations acrossCanada that administer the program on behalf of Agriculture and Agri-Food Canada(AAFC). Producers must always apply directly to a participating producer organizationwhich determines if the producer eligible for an advance under the program.9

Advance Payments Program (APP) - Q&AProducer organizations authorized by Agriculture and Agri-Food Canada to providecattle advances in British Columbia, Alberta, Saskatchewan and Manitoba are:APP Delivery OrganizationsPhone NumberProvince(Cattle Advance)Canadian Canola GrowerAssociation1-866-745-2256BC, AB, SK and MBWestern Cash Advance ProgramInc.(780) 674-2622AB and SKBritish Columbia Breeder & Feeder(250) 992-8433BCManitoba Livestock Cash AdvanceInc.1-866-869-4008MB3. All producers who have an APP advance must repay their advance once they begin tosell the commodity for which the advance was issued. Typically producers have up to 18months to sell commodity and repay their advances; however, cattle and bisonproducers have up to 24 months.4. Producers must repay at the rate for which the advance was issued. For example if aproducer received a 700 per head advance per calf, the producer must repay 700 peranimal for each animal sold.5. All advances issued under the Advance Payments Program must be secured. Securingan advance ensures that the producer has the capacity to repay their advance if theproducer suffer a production loss or has experienced some other form of financial loss.6. To be eligible for an advance a producer must always pledge as security against theadvance:1) The commodity (i.e. cattle, wheat, etc.) for which the advance was issued; and,2) Proceeds from AgriInsurance (not available for cattle producers), AgriStabilityProgram or the Western Livestock Price Insurance Program (western cattle producersonly).7. Advance Rates are limited by the form of security a producer pledges against theadvance. Each security type provides different levels of risk coverage which is reflectedin the Advance Rates issued to producers.Producers using WLPIP as their security for a cattle advance will have their AdvanceRates limited to the level of insurance coverage they purchased under WLPIP. Producercan receive up to 50% of the value of the WLPIP insurance contract, but the advancecannot exceed the maximum Advance Rate as set by Agriculture and Agri-Food Canadaat the beginning of the program year.10

Advance Payments Program (APP) - Q&AAs a security WLPIP provides risk mitigation against only one risk, price, and to be aneffective security under the APP it was necessary to limit the Advance Rates foradvances issued with WLPIP to 50% of the insurance coverage.Producers using AgriStability as their security for a cattle advance can receive up to themaximum Advance Rate as set by Agriculture and Agri-Food Canada at the beginning ofeach program year. As a security AgriStability provides risk mitigation against manydifferent types of financial risks (i.e. price declines, production losses, input costs, etc.)and as such, advances issued with AgriStability as the security do not need to be limited.8. A producer must always provide to the APP administrator proof that they havepurchased and paid in full a WLPIP contract for the animals on which the advance willbe issued.9. No, a producer must always provide proof that they have purchased and paid in full aWLPIP contract on the animals for which the APP advance will issued and in an amountsufficient to secure the requested APP advance.10. Producers now have the choice between using WLPIP or AgriStability as a security foran APP advance. However, a producer must understand that the market values used todetermine the APP advance rates will differ depending on the security type pledgedagainst the advance. Please contact an APP Administrator to determine which securitytype is most beneficial for you.11. Producers have the option of using multiple WLPIP contracts to provide continuoussecurity coverage. Once one WLPIP contract expires producers can repay their advanceor they can purchase and pledge another WLPIP insurance contract against theiroutstanding advance in order to extent repayment terms.12. No, the APP program encourages producers to use the WLPIP claim window four weeksprior to the contract Expiry Data to make the necessary choice they believe are in thebest interest of their farming operation. Once a claim as been made the producer has upto 30 days to either repay their advance or pledge another WLPIP insurance contractagainst their outstanding advance. Please contact an APP administrator in your area formore advice.13. If the producer makes a claim under WLPIP, the value of the claim will be sent directly tothe APP program administrator who will apply the claim amount to the producer’soutstanding APP advance. If the producer does not have an outstanding balance theclaim will be forwarded to the producer.14. If a producer has secured an APP Advance with a WLPIP insurance contract anddecides to keep the animals after the Expiry Date of the WLPIP insurance contract, theproducer must either repay their APP advance or provide another WLPIP contract toensure the producer has continuous security against their advance.If the producer fails to maintain continuous security coverage they will be subject tointerest and default penalties.11

Advance Payments Program (APP) - Q&ARepayment and Changes to APP Questions1. How do producers repay the advance?2. What happens if a producer does not repay before the end of a production periodor breaches another term of their repayment agreement?3. What is the multi-year AGA and Repayment Agreement?4. When making repayments on my APP, which part is paid back first? The interestbearing or non-interest bearing loan paid first?5. How long do I have to repay the APP?6. What are the additional changes to be brought into force through regulation?7. What new commodities will be eligible?Repayment and Changes to APP Answers1. Producers have to repay their APP Advances as their agricultural product is sold and arerequired to demonstrate that there was a sale of the product for which the advance wasissued. Repayments must also occur before the end of the production period (generally18 months). Depending on the producer organization, the producer may be responsibleto repay the APP Advance directly to the organization, or in some cases, if a buyeragreement is in place, the producer organization may be responsible for collecting themoney directly from authorized buyers.In the case of agricultural product loss, failure, default or disaster, the Business RiskManagement (BRM) program security will be used to cover the outstanding advance.2. Producers who do not repay their advance before the end of the production period aredeclared in default and subject to default penalties. Typically, the production period is 18months long and runs from April 1 to September 30 of the following year. For cattle andbison, the production period is 24 months long due to the nature of the product. Once indefault, the producer is not eligible to receive another advance until the amount indefault, and associated penalties are repaid in full.3. To reduce red tape and improve program delivery, proposed amendments will allowadministrators to enter into multi-year agreements with the Minister that would covermultiple program years. The intent is for producers to also have the ability to enter intomulti-year repayment agreements with APP administrators, while respecting the securityrequirements to protect the advances.Though multi-year agreements are allowed under the Act, they have yet to be put inplace, as there are a number of legal issues to consider before being able to do so.4. The interest free portion of an APP advance must always be paid out first and thisportion represents costs to the government as the Federal government actually pays theinterest on behalf of the producer.12

Advance Payments Program (APP) - Q&A5. This depends on which types of products that you are producing. All advances must berepaid as the products are sold, but the overall time frame allowed is commodity based.Most storable products such as grains and oil seeds are given 18 months to repay (fromApril to September of the following year), while cattle and bison advance can receive upto 24 months. Other products may have different production periods for the purposes ofthe program and we suggest that you check with your administrator for your specificcommodities.6. The additional changes are anticipated to include: Bees and cervid antler velvet to be eligible for advances; Specific classes of breeding animals intended for market may be eligible for advances; More options for producers to secure an APP advance thereby potentially increasingamounts available under the program; Additional flexibility for allowable repayment methods. Third-party guarantors for large corporations, co-operatives or subsidiary companies inlieu of each individual in the organization providing a guarantee.7. Bees, cervid antler velvet and certain classes of breeding stock intended for marketbefore the end of the production period.13

For the second instalment, the total advance would be recalculated to confirm the acreage actually seeded. Example 3: Non storable agricultural products APP Eligible Advance Rate of advance per Unit: 100/lb Number of production units - 100 lbs Eligible cash advance - 100/lb X 100 lbs. 10,000 OR Security through AgriStability