FarmNEXT
Guidelines
2016-2017
PROGRAM GUIDELINES 2016-2017
For more information please contact:
Department of Agriculture
Programs and Business Risk Management
74 Research Drive
Bible Hill, Nova Scotia B6L 2R2
Tel: 902-893-6377
Toll free: 1-866-844-4276
Fax: 902-893-7579
Email: [email protected]
novascotia.ca/programs
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PROGRAM GUIDELINES 2016-2017
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Objective
The objective of this program is to encourage and support new farmers to establish commercial farms in Nova Scotia.
Program funds are intended to reduce the loan principal to provide a stronger equity position for the farm business in
the first year of operation.
Who is Eligible?
The Program is available to Beginning Farmers in Nova Scotia who:
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are 19 years of age and older and a resident of Nova Scotia;
are registered under the Nova Scotia Farm Registration Act prior to the release of funds;
obtain financing through the Nova Scotia Farm Loan Board, with a loan(s) having a repayment term of at
least five years; and
are establishing a new commercial farm or purchasing an interest in an established commercial farm in Nova
Scotia.
Assistance Categories
Applicants from two main categories will be considered:
Category One includes applicants that are farm succession candidates. Transfers that are “non-arm’s length” in
nature as well as “arm’s length” for established businesses will be considered. The intention of this category is to
assist a farm enterprise on one occasion. Subsequent applications will not be considered*.
Category Two includes applicants undertaking a pure Start Up farm business.
Under both categories, applicants must be borrowing money for the purpose of purchasing farm assets and
developing a farm unit. Benefits may be available to more than one child in a family provided each child operates
his/her own farm entity as a separate and unique business (i.e. separate management, accounting, etc.)
Definitions
Commercial Farm
A commercial farm is defined as:
1. a farm business which generates an annual gross farming income of at least $30,000; or
2. developing a farm business which will generate an annual gross farming income of at least $30,000
within five years of applying to the FarmNEXT program.
Beginning Farmer
A beginning farmer refers to a person who plans to become established as a commercial farmer, defined as:
1.
A person who is purchasing a commercial farm, farmland or other farm assets to develop a
commercial farm for the first time.
2. Two or more persons who form a partnership or company for the purpose of operating a commercial
farm or plan to purchase and operate a commercial farm may qualify to receive benefits on a loan
obtained from the Nova Scotia Farm Loan Board on the following basis:
a) In the case of one or more persons entering a partnership or company where an existing farmer
has a loan with the Nova Scotia Farm Loan Board, benefits will apply on funds advanced for
additional capital development projects or for a loan to completely purchase the interests in the
farm of an existing partner or shareholder.
b) Benefits will not apply to funds borrowed to gain an equity position in a farm where the vendor of
the equity remains an owner of the farm.
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Category Details
Under Category One (Succession), the beginning farmer applicant must have at least a 25 percent controlling
ownership of the farm, which means:
1) In the case of a company, the beginning farmer must be the registered and beneficial owner of shares which:
a) Entitles the holder to cast not less than 25 percent of the votes eligible to be cast at an ordinary or
annual meeting of shareholders for the election of directors, and
b) Carries a residual right to participate in not less than 25 percent of the dividends paid by the company
and not less than 25 percent of the assets of the company on the liquidation or winding up of the
company and does not limit the holder to a maximum amount of dividends paid or entitle the holder to
a minimum amount of dividends paid but such dividend and liquidation entitlement may be subject to
the rights of holders of shares having a priority where the priority is commercially reasonable.
2) In the case of a partnership, the beginning farmer must be the beneficial owner of an interest in the
partnership which:
a) Entitles the beginning farmer to cast not less than 25 percent of the votes attached to all interests in the
partnership in making management decisions concerning the business and affairs of the partnership,
and
b) Entitles the beginning farmer to participate in not less than 25 percent of the profits of the partnership
subject to the prior entitlement of other partners to participate in the profits of the partnership to an
amount which reflects a reasonable return on the value of their return in the partnership.
3) Individuals who inherit or acquire a farm through a gift may be eligible on initial capital development loans
within the first two years of farm acquisition.
4) Beginning farmers who have acquired partial ownership in commercial farms through a gift or through the
purchase of a limited number of shares (less than 25 percent) may be eligible for interest benefits on funds
borrowed from the Nova Scotia Farm Loan Board on the same basis as a beginning farmer when he/she obtains
25 percent or more controlling ownership.
Under Category Two (Start Up), the beginning farmer applicant in a farm must have at least a 51 percent controlling
ownership of the farm, which means:
1) In the case of a company, the beginning farmer must be the registered and beneficial owner of shares which:
a) Entitles the holder to cast not less than 51 percent of the votes eligible to be cast at an ordinary or
annual meeting of shareholders for the election of directors, and
b) Carries a residual right to participate in not less than 51 percent of the dividends paid by the company
and not less than 51 percent of the assets of the company on the liquidation or winding up of the
company and does not limit the holder to a maximum amount of dividends paid or entitle the holder to a
minimum amount of dividends paid but such dividend and liquidation entitlement may be subject to the
rights of holders of shares having a priority where the priority is commercially reasonable.
2) In the case of a partnership, the beginning farmer must be the beneficial owner of an interest in the
partnership which:
a) Entitles the beginning farmer to cast not less than 51 percent of the votes attached to all interests in the
partnership in making management decisions concerning the business and affairs of the partnership, and
b) Entitles the beginning farmer to participate in not less than 51 percent of the profits of the partnership
subject to the prior entitlement of other partners to participate in the profits of the partnership to an
amount which reflects a reasonable return on the value of their return in the partnership.
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How to Apply
Once the applicant has secured a loan through the Nova Scotia Farm Loan Board, the applicant must submit the 201617 FarmNEXT Application Form, Repayment Agreement, and a copy of the loan approval letter. In addition, if an
applicant has been reporting farm revenue, the applicant must submit their Statement of Farming Activities (T2042,
T1273) or if the applicant is a corporation/limited company, submit Schedule 125 Farm Revenue – detailing sales
by commodity revenue code that was filed with Canada Revenue Agency (CRA) for the most recently filed tax
year. Please submit all of these documents to:
Programs and Business Risk Management (PBRM)
74 Research Drive
Bible Hill, Nova Scotia B6L 2R2
Phone: 902-893-6377
Toll free: 1-866-844-4276
Fax: 902-893-7579
Email: [email protected]
Website: http://novascotia.ca/programs
Applications to the program must be submitted within 6 months of loan approval. Farms that previously received
benefits under the New Entrants to Agriculture or FarmNEXT Programs will not be eligible.
Repayment Agreement
The beginning farmer will be required to repay the amount of benefit received through this Program if the farm,
farmland or assets relating to the eligible loan are sold, or if the farming operation is discontinued for any reason
within a five-year period from the date of loan/FarmNEXT approval. The loan must remain with the Nova Scotia Farm
Loan Board for the period of four years. The amount of benefit will be repayable if the loan is moved from the Farm
Loan Board to another institution during that period.
Authority
The Department shall have the authority to deny an application if there is evidence of misrepresentation of pertinent
information, or if the Department believes that an application does not conform to the spirit of the Program.
Funding Assistance
Funding for any fiscal year is subject to annual Department budget approval by Government. Funding to applicants
will be based on a projected calculation of eligible interest. Eligibility is established by each applicant on one occasion
only within the definition of this Program. Benefits paid under this Program shall not exceed the lesser of:
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projected calculation of 4 years of eligible interest, and
$30,000 maximum benefit.
Effective
April 1, 2016 – March 31, 2017