The federal government has added producers and agricultural co-operatives to the list of sectors they're trying to help through the Canada Economic Action plan.

"Even at the best of times, these hard working men and women face challenges. Now during the global recession these challenges are much greater," says Prime Minister Stephen Harper. "The worldwide downturn has caused uncertainty and volatility across our economy and agriculture is no exception."

The federal government's plan to increase access to credit and loans changes the Farm Improvement and Marketing Cooperative Loans Act. Legislation has been introduced to guarantee an estimated $1 billion in loans over the next five years, including expanded guidelines for lending so previously ineligible young farmers can access these government-backed loans.

"If we don't take decisive action to bolster the sector right now the 84,000 farmers expected to retire over the next 15 years will not be with us," Harper says.

Other changes include extension of the maximum government guarantee, growing from $250,000 to $500,000. The program can also be used to help with the intergenerational transfer of farms to younger operators.

Agricultural co-operatives with over 50 per cent producer membership will be eligible for loans of up to $3 million for the processing, marketing or distribution of farm products. These loans are currently limited to co-operatives owned 100 per cent by farm members.

"FIMCLA has been around for 20 years but farmers and cooperatives have told us it no longer met their needs," says Agriculture Minister Gerry Ritz. "New farmers will be eligible for 90 per cent of their loan values cutting their down payment in half."

The legislation to change FIMCLA was introduced in Parliament earlier this week. If approved, the program will be re-named the Canadian Agricultural Loans Act.

Rob Brunel, vice-president and chair of the Keystone Agriculture Producers Association Young Farmers Committee, is pleased with the news.

"The FIMCLA was good but it was missing on helping out the young farmers. So it was a good announcement and we're happy to see the changes that will be implemented."

Farm Credit Canada (FCC) provides its own unique financing solutions dedicated to agricultural producers including young farmers, and is not a lender under FIMCLA.

FIMCLA is a program within Agriculture and Agri-Food Canada. More information about FIMCLA is available at http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1177344219813&lang=eng