Farmstart Corporation and the Agricultural Credit Corporation

Saskatchewan FarmStart Corporation was established in 1973 by the Saskatchewan government to assist in the expansion and development of the province's agriculture industry. The three primary objectives of the new Corporation were: to provide low income and low equity farmers or potential farmers with an opportunity to develop viable farm units by intensifying production through livestock production; to encourage diversification of the agricultural industry, thereby adding stability to the economy; and to encourage employment in the province by providing a larger base of livestock production that had the potential of being processed locally. Program administration was handled through a team approach using both agrologists and loans officers. Agrologists scrutinized loan applications in order to assess farm viability, while the loans officer assessed credit worthiness and security requirements. Final approval for loans could be granted by either field staff or head office staff in Regina.

To reach these objectives, a Loan and Grant Program was established which made credit available to producers who were either establishing or expanding a livestock enterprise. The program was targeted through its eligibility criteria. Applicants were required to have a net worth of less than $60,000, a net income of less than $10,000 per year, and a value of applicant's productive agricultural assets of less than $100,000. The eligibility criteria were expanded in subsequent years as income and net worth increased.

In conjunction with the Loan and Grant Program, FarmStart offered operating loan guarantees to its customers who could not otherwise obtain operating credit. A number of special assistance programs were also administered by FarmStart to provide short-term credit relief for livestock producers.

A significant change for the Corporation was the replacement of FarmStart with the Agricultural Credit Corporation of Saskatchewan (ACS) effective January 1, 1984. The purpose of ACS was similar to FarmStart, but the change provided the Corporation with “a new start with a broader client base and streamlined operating procedures.” In conjunction with the expanded mandate, the head office of ACS was established in Swift Current; field offices were maintained throughout the province. Under ACS a major expansion of the Loan and Grant Program, then called the Capital Loan Program, came in 1989 when home quarter and debt settlement financing became eligible purposes. Following this, the Corporation expanded its ability to refinance its own customers' existing ACS debt into a Capital Loan. ACS also administered the Guaranteed Vendor Mortgage program to assist with intergeneration transfers, and the Investment Loan Program to expand the hog and feedlot industries.

The Livestock Cash Advance Program was introduced by ACS in 1985 in response to a Drought that threatened livestock herds because of a lack of feed supplies. Initially advances were available only for beef and dairy cattle, but the program was expanded in later years to include other livestock species. In 1986, production loans were provided to individuals, partnerships, corporations or Co-operatives to assist with the expenses associated with seeding the 1986 crop. Loans were provided for up to $25 per eligible acre; the maximum loan per individual was $100,000. For a multiple operator unit the maximum was $200,000. Loan applications were available through rural elevators, and required only verification of acreage from their 1985-86 Canadian Wheat Board permit book. Loan repayment was scheduled for three years. In 1987, an extension was available whereby customers could pay interest only and postpone any repayment of the principal until 1988. In 1988, customers were given the option of extending the loan over ten years.

The Saskatchewan Spring Seeding Loan Program was an operating loan guarantee administered by ACS and disbursed by banks and credit unions in the spring of 1990. Loans of up to $50,000 were available to individuals, and $100,000 to multiple operator units. Loans were originally to be repaid by January 15, 1991; any unpaid loans were transferred to ACS, with banks and credit unions drawing on the government guarantee. On March 28, 1996, in the province's budget speech, the wind-down of ACS was announced: no new lending would occur after that date, with the exception of limited refinancing of existing ACS loans. In March 2000, the Financial Programs Branch was created within Saskatchewan Agriculture and Food. The remaining ACS employees were rolled into this branch on January 1, 2001; they continue to manage the wind-down of the ACS portfolio.

David Boehm