She says FCC’s transition loan program launched last year is designed to bridge the competing financial priorities of retiring sellers and incoming buyers.
“The seller is looking for predictability of a certain cash flow; they don’t actually need their full asset value back from day one. What does the buyer need? To be able to manage their cash flow early on and minimize that interest cost,” explains Hendricks.
On a hypothetical $5 million farm transfer, she says the structured loan can save the incoming producer roughly $3 million in interest payments alone and allow them to pay off the facility seven years faster.
As real estate values continue to climb, Hendricks says FCC expects to continuously review its thresholds to ensure the next generation can retain a foothold in primary production. “It’s getting to a point where it’s becoming tougher and tougher, and we know it,” she says. “Our number one focus is to get you through the tougher period, so you can have as much flexibility as possible, so that you can get back on your feet.”
The full interview with Justine Hendricks was recorded at the FCC Horizon event, hosted at the FCC’s head office in Regina on June 11. The conference brought together industry leaders and policymakers to discuss the future of Canadian agriculture, international trade, investment in agriculture, and more.