Price Pooling Program
Highlights
The Price Pooling Program is designed specifically for businesses like yours in the agricultural sector. This program offers a price guarantee that protects you from unexpected declines in market prices. By participating, you can use this guarantee as security to obtain credit from lending institutions, improving your cash flow through an initial payment for products delivered.
Key Benefits:
- Improved Cash Flow: Receive an initial payment for your products, helping you meet short-term financial obligations.
- Equal Returns: Ensure fair returns for products of similar grade, variety, and type.
- Income Stability: Lock in a minimum rate of return and protect against market price declines.
- Extended Marketing Season: Market your crops over an extended period to take advantage of better market conditions.
- Economies of Scale: Benefit from cooperative marketing and single-desk selling.
Qualifying for this program is straightforward, and being approved can significantly enhance your financial stability and marketing opportunities. This is a unique chance to secure your business against market volatility while improving your overall income.
Financing Details
Type of Financing: Price Guarantee
Repayment Terms and Interest Rates:
- There are no repayment terms or interest rates associated with this program. The price guarantee is used as security to obtain credit from lending institutions.
Eligible Expenses:
- Storing
- Processing
- Transportation
- Selling
Use of Funds:
- Funds can be used to cover the eligible expenses listed above.
- Funds cannot be used for any expenses outside of storing, processing, transportation, and selling.
Fees:
- There are no fees associated with this program.
Qualifications
- Must be a marketing agency (association of producers, processor, or selling agent).
- Must be involved in the cooperative marketing of eligible agricultural products, including processed products.
- Must enter into an agreement with the Minister of Agriculture and Agri-Food.
- Agreement must cover the marketing of agricultural products under a cooperative plan.
- Must be able to make an initial payment to producers for products delivered.
Must manage eligible costs of storing, processing, transportation, and selling of products.
Disqualifications:
- Individual producers not associated with a marketing agency.
Description
This program offers your business a price guarantee to protect against unexpected drops in market prices. This guarantee helps you secure credit from banks, improving your cash flow. You get an initial payment for your products, which helps you manage short-term financial needs.
Key benefits include:
- Improved Cash Flow: Receive an initial payment for your products, helping you meet immediate financial obligations.
- Equal Returns: Get fair returns for products of the same grade, variety, and type.
- Income Stability: Market your crops over an extended season, taking advantage of better market conditions.
- Price Protection: Lock in a minimum rate of return and safeguard against unexpected price declines.
- Credit Security: Use the price guarantee as security to obtain credit for initial payments.
The program covers costs like storing, processing, transportation, and selling, up to a fixed maximum. If the market price is lower than the guaranteed price, the government covers the shortfall. If it's higher, the surplus is shared among producers or saved for future use. This ensures your business can operate smoothly and profitably.
Program Steps
Gather Required Documentation: Prepare the necessary documents to support your application. These typically include:
- Business registration details
- Financial statements
- Business plan
- Details of the agricultural products you plan to market
- Any existing agreements with lending institutions
Complete the Application Form: Fill out the application form provided by the program. Ensure all sections are accurately completed.
Submit Application to Marketing Agency: Submit your completed application form and required documentation to the marketing agency you are working with. The marketing agency will handle the submission to Agriculture and Agri-Food Canada on your behalf.
Await Confirmation: Wait for confirmation from the marketing agency that your application has been received and is being processed.
Review Agreement: Once your application is approved, review the agreement provided by the marketing agency. This agreement will outline the terms of the price guarantee and the initial payment for your products.
Sign Agreement: Sign the agreement and return it to the marketing agency. Ensure you keep a copy for your records.
Receive Initial Payment: Upon signing the agreement, you will receive the initial payment for your products from the marketing agency.
Monitor Sales and Payments: Keep track of the sales of your products and any subsequent payments from the marketing agency. Ensure all transactions are in line with the agreement.
Final Settlement: At the end of the crop year, review the final settlement provided by the marketing agency. This will detail the actual average wholesale price received and any additional payments or shortfalls.
Provide Feedback: If applicable, provide feedback to the marketing agency or Agriculture and Agri-Food Canada to help improve the program for future participants.