The backlog of grain sitting in storage across the Prairies could take a toll on this year's crop, says the president of the Alberta Federation of Agriculture.
Lynn Jacobson said there are concerns that without the cash from last year's crop, farmers may be unable to pay for this spring's seeding.
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Much of the grain from last year’s record-setting bumper crop is still sitting in storage, with other commodities taking up space on freight trains, he said.
Farmers are only paid once the grain hits the market. And they’re waiting on some big pay days — last year's crop came at a time when grain prices were high.
In the meantime, Jacobson said there is a federal program that allows farmers to borrow $100,000 interest-free in a cash advance — but only if their grain is on the market.
And there’s another hitch, Jacobson said.
“Before you can borrow any more money from that program, you have to pay off what you owe. So it's only a one year program,” he said.
Jacobson said his organization has asked Ottawa to change the program.
“As long as you've got the product in the bin why not let the people take a cash advance again for this year coming up — for the new crop year. So we've been pushing that and asking the government if they would do that. So far the answer to that one is no.”
Jacobson took part in meetings with the federal agriculture minister this week. He said there still doesn't appear to be anything Ottawa can do to force rail companies to ship the backlog of grain.
Farmers have argued that competition from oil producers is what's delaying their efforts to get last fall's harvest to markets.