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Supporting young farmers

Aiming to help more young adults break into the agricultural sector, Farm Credit Canada has partnered with the Ministry of Agriculture and Agri-Food to create a new loan for young entrepreneurs.

The Young Entrepreneur Loan, launched earlier this month, is a spinoff from the success of the Young Farmer Loan, which was created in 2012.

FCC senior district director George Klosler explains how the first loan came to be.

“Several years ago, FCC, being committed to the industry of agriculture, and working through the direction of our board of directors was thinking of ways to encourage younger people to stay and enter the industry. The idea of a loan package particularly suited to younger people with a break on costs was developed and it was called our Young Farmer Loan,” Klosler said.

In 2016, FCC approved more than $2.6 billion in financing to farmers and entrepreneurs under the age of 40. He says there was a growing recognition that with the success of this program in helping young farmers, there were also people who are younger and entrepreneurial who don’t want to be on a farm operation, but want to work in the industry as a supplier, marketer or as somebody adding value to the primary production stream.

Thus, the Young Entrepreneur Loan, was born, which has many of the same features as the Young Farmer Loan.

If approved for the loan, applicants can be receive up to $1 million to purchase or improve their agriculture-related assets or to purchase shares in an agriculture-related business.

“Each of the loans come with a preferred pricing for a young person. Usually younger operators or operations have a higher risk profile, which can cause pretty significant interest rates to be charged,” Klosler said.

Jean-Philippe Lajoie took advantage of the Young Farmer Loan for his maple syrup operation. He said flexibility and the loan’s interest rate were appealing, allowing he and his wife to focus more on their operation and spend less time worrying about finances.


The Young Entrepreneur Loan has a 25 per cent minimum down payment requirement, custom variable and five-year fixed rates.

He says at FCC they spend a lot of time understanding the agriculture sector and its partners.

“When you have more knowledge and understanding you’re probably prepared to mitigate the risks around doing something in that industry better than somebody that doesn’t understand it so well. I believe with the Young Farmer Loan and soon to be with the Young Entrepreneur Loan we’re prepared to take on applications and provide the preferred pricing because we really understand what these folks are doing and how they’re going to succeed. And that’s critical,” Klosler said.

In many instances, he claims there can be a barrier when people or organizations don’t understand the situation, and the costs of servicing that sector are greater when you don’t have the knowledge.

Because of the success and interest in the Young Farmer Loan, it only made sense to leverage it more and mimic the program to serve the industry on a wider basis.

“One of the things that’s evident, certainly in primary agriculture is the aging population of the farm producers. Today we have more producers than ever that are over the age of 65 that continue to operate the farm and remain on the farm. Sometimes that may be because they don’t have, perhaps, somebody that’s willing to be a successor or the costs of that person coming forward to be a successor in the operation are costly,” Klosler said.

“And so, this is just an overall strategy nation-wide to incite younger people to be attracted to the industry, therefore incenting older producers to work with them and have just another tool in the toolbox in terms of passing on the farm assets to another younger generation.”

For more information, visit www.fcc.ca/youngentrepreneurloan.

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