By Greg Nikkel

The federal government has "poor timing" in cancelling the Farm Improvement Loan Program, and farm leaders and credit unions are lobbying the government to have the program restored.

The program was cancelled in the recent federal budget, although news about its cancellation didn't come out until a few days after the budget was brought down by Finance minister Ralph Goodale on Feb. 23.

"It's very poor timing to be pulling this type of support," said Cecilia Olver, Corning producer and vice-president of the Agricultural Producers Association of Saskatchewan (APAS).

She noted a resolution was recently passed by the CFA to increase the amount of funding available under this program.

"That's interesting they would make that big a disconnect. It's going to be a difficult year for people to get loans," added Olver.

"I just can't understand what the federal government is up to. On the one hand they say they are concerned about Western alienation and on the other hand, they're sticking it to Western Canada and Saskatchewan in particular," said Souris-Moose Mountain MP Ed Komarnicki.

"I find it amazing that our finance minister that hails from Saskatchewan has not put a stop to it, especially at a time when farmers are suffering the effects of BSE, frost, low commodity prices and an uncertain economic future," said the MP.

Under the Farm Improvement Loan Program, farmers can borrow on 90 per cent instead of 75 per cent of the market value of their land, equipment and breeding stock, and they get the loan at the prime interest rate plus one per cent.

The cancellation of the program will have its largest effect here in Saskatchewan, as 70 per cent of the loans or nearly $67 million in loans were from this province, including a significant amount in the Weyburn area.

"We used it quite actively to help farmers. It's one of the products that was a part of our services. As a result of that cancellation, we're not pleased with that at all. It helps farmers get cash flow, now that cash flow will dry up," said Allan Messer, CEO of the Weyburn Credit Union.

He noted his institution had at least $1 million in loans under this program in each of the last two years, "so those are significant dollars."

Messer noted that both individual credit union branches and the Credit Union Central organization will be lobbying the government to keep this program in place.

"I'm disappointed it's being cut. I can certainly make the case that it should be kept," added Messer.

Nationally, the number of loans under this program have been steadily declining over the last several years, with 16,250 new loans in 1996-97, down to 3,155 in 2003-04. Komarnicki said the decline shouldn't make a difference if it's needed by the farming community.

"The Saskatchewan rural economy has taken a significant beating in the intervening years and a decline in borrowing should not at this time be a basis for cancellation of the program," he said.

MP Komarnicki added he would raise this issue when he speaks to the budget during debate this week in Parliament.