- Banks have longstanding relationships with farmers and other agricultural customers and have helped during significant challenges such as the BSE crisis, droughts and floods.
- All major banks have dedicated agricultural departments serving farmers and other agricultural customers during all phases of their business.
- Bank agriculture specialists offer advisory services with detailed information on economic conditions, market trends, government policies, and regulatory issues that impact the sector.
- Banks’ outstanding loans to the agricultural sector exceeded $36 billion at the end of 2016.
The bottom line
Banks in Canada are proud of their longstanding business relationship with farmers and other agricultural customers. These strong relationships have helped banks work with their customers on the day-to-day issues of running a business and through the significant challenges that the agricultural sector sometimes has to confront.
Supporting farmers across Canada
All major banks have dedicated departments and specialists in communities across the country to serve agricultural businesses. Many of these specialists are current or former farmers who know the industry and are able to provide services during all phases of the farm business. Banks hire individuals with professional designations and university graduates with an understanding of the agricultural sector as account managers and specialists who advise farmers on matters such as agriculture loans, economic forecasting, farm business planning and general farm management.
From small family farms to large-scale farming operations, banks are a key source of financing for farmers. Banks have supplied over $36 billion1 of financing to farmers and other agricultural clients across Canada − accounting for over one-third of the market − through operating and term loans and mortgages. Banks also work with the federal government to offer financing through the Canadian Agricultural Loans Act (CALA) and the Advance Payments Program (APP). Furthermore, almost 15 per cent of small and medium-sized (SME) authorized financing from banks goes to the agriculture industry.2
Banks provide farmers with more than just credit. In addition to chequing and savings accounts (including the Federal government’s AgriInvest account), banks offer investment products and advisory services with detailed information on economic conditions, market trends, government policies and business risk man agement programs, and regulatory issues that impact the agricultural sector.
Supporting the development of farms and their communities
Banks help farmers during every phase of their development − from young farmers at the beginning of their careers, to farmers who wish to expand domestically and internationally and those who are thinking about retirement and in need of succession planning. This support extends beyond the farm gate to include other related businesses such as food and beverage processors, input and service suppliers and wholesalers.
The strong connection banks have to the farming community is evident through their support for the Outstanding Young Farmer Programs, 4-H clubs and university programs that provide assistance to agricultural youth with entrepreneurship, networking opportunities, and scholarships, as well as sponsorship of showcase events.
Beyond the Canadian border
With Canada being amongst the top exporting countries of agriculture and agri-food products, banks offer services that allow farmers to take advantage of opportunities in international markets. These services include customized global banking and cash management solutions, such as foreign currency accounts and exchange services, as well as exporting and importing products and services such as letters of credit to help farmers succeed across international borders.
In support of the agriculture sector’s international presence, banks also work closely with Export Development Canada (EDC) to support farmers and other agricultural clients that directly export their goods and services internationally or participate in global supply chains.
With the forging of new trade and investment agreements, our banks will continue to work with their clients to ensure they have the necessary tools and resources needed to participate in the global economy.
Help during significant challenges
Banks in Canada have a longstanding business relationship with farmers and agricultural customers and these strong relationships have helped banks work with their customers through significant challenges. For example, farmers have had to confront BSE, avian influenza, drought, floods and the H1N1 virus. Banks have been there for their clients, working with them on an individual, case-by-case basis to assess their unique needs and to develop solutions.
1 Statistics Canada, Farm Debt Outstanding, classified by lender 2016 data
2 CBA Business Lending Statistics, December 2016, Figure from Nine Banks