Acts and Regulations

90-125 - New Entrant Farmer Loan

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Revoked on 5 February 2020
NEW BRUNSWICK
REGULATION 90-125
under the
Agricultural Development Act
(O.C. 90-817)
Filed October 22, 1990
Under section 44 of the Agricultural Development Act, the Lieutenant-Governor in Council makes the following Regulation:
2018-38
Repealed: 2020-6
1This Regulation may be cited as the New Entrant Farmer Loan Regulation - Agricultural Development Act.
2In this Regulation
“borrower” Repealed: 2010-115
“economic farm unit” Repealed: 2010-115
“farmer” Repealed: 2010-115
“farm unit” means a farming operation or a farming operation combined with a woodlot;(entité agricole)
“new entrant farmer loan” Repealed: 2010-115
“provincial lending rate” means the rate of interest determined by the Minister of Finance and Treasury Board on a quarterly basis to be the average interest cost to the Province of borrowing money during the previous quarter.(taux provincial)
“provincial lending rate” Repealed: 94-34
94-34; 2001-31; 2010-115; 2019, c.29, s.6
2.1(1)The Board may grant a new entrant farmer loan to a person for the purchase of a farming operation, either in whole or in part, including the purchase of shares in a farming operation.
2.1(2)Subject to subsection (3), the Board may grant to a person who has received a new entrant farmer loan an additional loan for any of the following purposes:
(a) for the purchase of land to be added to an existing farming operation;
(b) for the erection or improvement of buildings and facilities on the farming operation; and
(c) for the purchase of essential farming equipment and livestock.
2.1(3)A loan under subsection (2) may only be granted to a person within the first four years of receiving a new entrant farmer loan.
2.1(4)The total amount owing by a person under a new entrant farmer loan and an additional loan made under subsection (2) shall not exceed the maximum amount prescribed under paragraph 4(1)(g) for a loan.
2010-115
3(1)An applicant for a new entrant farmer loan shall be an individual with a combination of six years of post-secondary education and work experience on a farming operation, including at least
(a) the equivalent of one year of post-secondary courses in
(i) agriculture,
(ii) business administration, or
(iii) financial management, and
(b) two years work experience on a farming operation.
3(1.1)In the case of a new entrant farmer loan to be granted to a corporation, only a majority shareholder in that corporation is eligible be an applicant for that loan.
3(1.2)In the case of a new entrant farmer loan to be granted to a partnership, only one partner in that partnership is eligible to be an applicant for that loan.
3(2)An applicant for a new entrant farmer loan shall not
(a) own or have owned a farming operation, or
(b) during any twelve month period of the applicant since graduation from secondary school, have worked the majority of his or her time on or earned the majority of his or her income from a farming operation over which he or she had a 50 per cent or more interest through ownership or leasing or ownership of shares at the time the work was done or income earned.
94-34; 2010-115
4(1)The terms and conditions on which a new entrant farmer loan is to be made are as follows:
(a) the Board shall be satisfied that the loan will effectively establish the applicant on a farm unit that can provide the income necessary to repay any financial assistance given under the Act;
(b) the Board shall be satisfied that the applicant has the necessary ability, skill and knowledge to operate the farming operation in accordance with a mutually agreed on management plan;
(b.1) the borrower shall undertake to operate the farming operation in accordance with a mutually agreed on management plan;
(c) a borrower shall operate any woodlot or woodland situated on the farming operation named as security for the loan in accordance with an agreed management plan, but the cutting and sale of wood from the woodlot or woodland shall be done only by authority of a release or permit issued by the Board;
(d) a borrower shall annually, within three months after the borrower’s fiscal year end, submit a statement showing the details of the operation of the farming operation and conveying a true account of the condition and income producing state of the farming operation;
(e) a member of the Board or a person employed by the Board may at any reasonable time enter upon any farming operation on which it holds a mortgage to observe and evaluate the manner in which the farming operation is being used and managed;
(f) the Board shall take as security for the loan the first mortgage on the farming operation purchased by the borrower or any other security that the Board considers adequate;
(g) the amount of the loan shall be determined by the Board but shall not exceed $750,000 or 100 per cent of the value of the land and buildings as determined by the Board’s appraisal, whichever is the lesser;
(h) the term of the loan shall be for no more than 20 years;
(i) the interest rate applicable to the loan shall be fixed at a rate equivalent to the provincial lending rate in effect at the time the loan is approved by the Board, and the interest payable shall be calculated semi-annually on the outstanding principal and accrued interest;
(j) Repealed: 94-34
(k) Repealed: 94-34
(l) Repealed: 94-34
(m) repayment of the loan shall be
(i) during the first four years of the term of the loan, by annual payments of interest on the loan,
(ii) beginning in year five of the term of the loan, by blended payments of interest and principal as determined by the Board based on
(A) the amount of the loan,
(B) the capacity of the borrower to repay, and
(C) the security held on the loan, and
(iii) at the end of the term of the loan, by payment of any outstanding principal and accrued interest on the loan; and
(n) notwithstanding paragraph (m), a borrower may at any time during the term of the loan repay the outstanding principal and accrued interest on the loan.
4(1.1)Paragraphs 4(1)(h), (i) and (n) apply with the necessary modifications to a loan granted under subsection 2.1(2).
4(1.2)The repayment of a loan granted under subsection 2.1(2) shall be
(a) in the years in which the borrower is eligible to make payments under subparagraph 4(1)(m)(i) on a new entrant farmer loan, by annual payments on interest on the loan,
(b) beginning in the year the borrower becomes eligible to make payments under subparagraph 4(1)(m)(ii) on a new entrant farmer loan, by blended payments of interest and principal as determined by the Board based on
(i) the amount of the loan,
(ii) the capacity of the borrower to repay, and
(iii) the security held on the loan, and
(c) at the end of the term of the loan, by payment of any outstanding principal and accrued interest on the loan.
4(2)Repealed: 94-34
4(3)Repealed: 2001-31
94-34; 99-1; 2001-31; 2010-115
5In the event of a conflict between the provisions of this Regulation and those of the General Regulation - Agricultural Development Act, being New Brunswick Regulation 84-295 under the Agricultural Development Act, the provisions of this Regulation prevail.
N.B. This Regulation is consolidated to February 5, 2020.