July 1, 2008

Increases to Manitoba's Young Farmer Rebate program resulted in approximately $1.6 million in total benefits provided to over 1,250 producers for the 2007-08 fiscal year and program activity is expected to remain strong in 2008-09, Agriculture, Food and Rural Initiatives Minister Rosann Wowchuk announced today.

The minister noted the rebate recently increased by $5,000 to a lifetime maximum of $15,000 per person. In 2006-07, the original rebate program paid $1.2 million to 1,078 clients. The recent changes were made retroactive to April 2007, making more people eligible for the rebate in 2007-08.

"Farming is big business and, when you factor in land, machinery and input costs, it is a huge financial undertaking for any young producer," said Wowchuk. "This program helps young, beginning farmers with these challenges by reducing the cost of borrowing during the capital- intensive or expansion stages of their farming operations."

The rebate is available to Manitoba farmers between the ages of 18 to 39. It is now calculated on two per cent of the first $150,000 of principal of a loan for each of the first five years of the loan. The maximum rebate available to each borrower is $3,000 per year.

The enhanced Young Farmer Rebate applies to new and existing loans. Existing clients under 40 years of age, who currently are not receiving a rebate because they were subject to previous limits, are eligible for the expanded benefit.

"Since 1992, farm input prices have risen almost 40 per cent, while the price of land has risen almost 60 per cent," said the minister. "The increase to the Young Farmer Rebate strengthens the financial supports available to help producers cope with ever-increasing costs."

New long-term lending options are also available to clients under 40 years of age through the Bridging Generations Initiative which promotes family farm transfers between generations. Clients can choose either a 90 per cent financing option, which reduces their down payment or five years of interest-only payments which reduces cash flow pressure as developing enterprises are being established.