annual report 2011/12 - Manitoba Agricultural Services Corporation

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Also included in this category are Alternate Energy Loans, Environmental Enhancement Loans, Onsite WastewaterManagement Loans and Manure Management Loans. Environmental Enhancement Loans provide financial assistance toproducers who improve the environmental sustainability of their operations and management practices. Alternate EnergyLoans are available to finance the construction, equipment, and other approved capital costs associated with alternate energyprojects such as ethanol, bio-diesel and wind energy production. Onsite Wastewater Management Systems Loans facilitatesewage ejectors being replaced with more environmentally friendly disposal fields. New in 2011, Manure ManagementLoans, together with MAFRI’s Manure Management Financial Assistance Program, provide eligible hog producers with thefinancing necessary to comply with environmental regulations.In 2011/12, MASC approved 539 new loans for a total of $77.6 million. The number of new loans increased by 48%, with loanamounts increasing by 55%. MASC’s Direct Loans have been progressively increasing in size over time, averaging $144,000in 2011/12. As of March 31, 2012, MASC’s total Direct Loan portfolio was $248.3 million (3,008 loans). As shown in Figure 4,the Direct Loans issued in 2011/12 were used predominantly for purchasing land and buildings (58%), refinancing (19%) andconsolidating debt (12%).Figure 4 – Direct Loan PurposesDirect Loan Purposes 2011/12Historical Direct Loan Purposes 1959-2010Land/Building Purchases (58%)Refinancing (19%)Debt Consolidation (12%)Livestock Purchases (6%)Land/Building Improvements (3%)Other (2%)Land/Building Purchases (65%)Debt Consolidation (22%)Refinancing (1%)Livestock Purchases (5%)Land/Building Improvements (5%)Other (2%)Stocker Loans provide producers with short-term financing to purchase feeder cattle and calves, or as a cash advance on theirown retained feeders. MASC issued 221 Stocker Loans in 2011/12 (down 7% from the prior year). At $23.3 million, the totalvalue of Stocker Loans was up 11%, while the number of head financed was down 19% at 35,375.Comprehensive Refinancing Loans assist existing MASC clients who are in financial difficulty. The interest rate for the firstfive years of these loans is set at one-half a percentage point below MASC’s prevailing five-year rate at the time the loan istaken out. In 2011/12, the number of refinancing loans decreased 12%, with 92 loans approved, though the dollar amountincreased 2% for a total of $6.8 million. These loans primarily assisted producers experiencing prolonged excess moisturerelated problems and extended periods of poor cattle returns. As of March 31, 2012, the Comprehensive Refinancing Loanportfolio consisted of 499 loans for $29.9 million.Enterprise Development Loans were introduced in 2008/09 to provide financial support for the Manitoba Government’sinitiative of developing and diversifying the rural economy. As of March 31, 2012, the Enterprise Development Loan portfoliohad two loans for $3.9 million.Property ManagementAs a result of debt settlement negotiations and foreclosure proceedings, MASC periodically acquires title to property. During2011/12, MASC acquired no land and sold 1,244 acres, reducing the inventory to 3,363 acres as of March 31, 2012. Of theseacres, 3,208 acres are long-term leases under the Land Lease Option Program and 155 acres are on a short-term lease.20Manitoba Agricultural SeRVICes Corporation
Table 3 – Loan SummaryApprovals2010/11Approvals2011/12Outstandingas of March 31, 2012Number Millions Number Millions Number MillionsDirect Loans 1 366 $50.1 539 $77.6 3,008 $248.3Stocker Loans 237 20.9 221 23.3 198 19.5Comprehensive Refinancing Loans 104 6.7 92 6.8 499 29.9Enterprise Development Loans - - - - 2 3.9Manitoba Hog Assistance Loans 2 - - - - 96 30.5BSE Recovery Loans 2 - - - - 548 14.5Enhanced Flood Proofing Assistance Loans 2 - - - - 28 0.3Producer Recovery Loans 2 - - - - 15 0.2Total 707 $77.7 852 $107.7 4,394 $347.11 Includes Environmental Enhancement, Alternate Energy and Onsite Wastewater Management Systems loans.2 Prior programming for which outstanding loans are still being administered.Loan GuaranteesMASC guarantees various types of loans made by privatesector lending institutions. In partnership with creditunions, caisse populaires and certain chartered banks,MASC helps provide rural Manitobans with accessto credit with reasonable interest rates and terms thatotherwise would likely not exist. This partnership providesagricultural producers and rural entrepreneurs withopportunities to develop and expand their operations. Inaddition, MASC’s loan guarantees encourage financing inareas that the private sector generally considers to be higherrisk. As shown in Table 4, as of March 31, 2012, MASC had510 outstanding guarantees amounting to $82.0 million,which facilitated loans by participating lenders totalling$295.3 million.Diversification Loan Guarantees assist producers andagricultural enterprises in diversifying their operationsand/or adding value to agricultural commodities. MASCprovides a 25% guarantee of the principal amount of theloan made by a participating lender. In 2011/12, MASCapproved 17 guarantees (63% of the 2010/11 total) for loanstotalling $18.7 million. As of March 31, 2012, MASC had182 active guarantees with related loan amounts of$224.0 million.Manitoba Livestock Associations Loan Guaranteesprovide producers who are members of livestockassociations with cost savings created through morefavourable financing terms and reduced costs due to highercattle transaction volumes. MASC guarantees 25% of theprincipal amount of a loan made to a livestock associationby a participating lender. Individual livestock associationsare limited to a maximum guarantee of $1.25 million,which results in a maximum loan of $5 million. As ofMarch 31, 2012, there were nine associations (down by onefrom 2010/11), with 99 active association members and anapproved maximum total loan amount of $19.4 million.Operating Credit Guarantees for Agriculture assistproducers in obtaining lines of credit with reasonable termsfrom lenders participating in the program. MASC’s 25%guarantee of an approved line of credit makes financingavailable, which otherwise likely would not be offeredby the private lending institution. As of March 31, 2012,MASC had 131 active guarantees with a total maximumloan amount of $38.5 million.Operating Credit Guarantees for Rural Small Businesswere introduced in 2009 to assist small rural non-agriculturalbusinesses in obtaining lines of credit with reasonableterms from participating lenders. MASC guarantees 25%of the maximum authorized loan amount. The guaranteedlines of credit may be used to purchase inventory, financereceivables and cover general operating expenses. Theprogram guarantees loans up to a maximum of $200,000. Asof March 31, 2012, there were five active guarantees with atotal maximum loan amount of $0.7 million.2011/12 Annual Report 21
Page 1: 2011/12Annual ReportLENDING AND INS
Page 4 and 5: The Honourable Philip S. Lee, C.M.,
Page 6: Chair’s MessageThere can be no do
Page 9 and 10: Corporate GovernanceMandate of the
Page 11 and 12: Strategic Plan ReviewMASC’s visio
Page 13 and 14: • Progress on MASC’s corporate-
Page 16 and 17: expected grazing period and the num
Page 18 and 19: Table 1: Summary of 2011/12 AgriIns
Page 20 and 21: Table 2 - Five Year Insurance Stati
Page 24 and 25: Rural Entrepreneur Assistance (REA)
Page 26 and 27: Farmland School Tax RebateSince 200
Page 28 and 29: Lake Dauphin Emergency FloodProtect
Page 30 and 31: Responsibility for Financial Statem
Page 32 and 33: Original signed by30MANITOBA AGRICU
Page 34 and 35: Statement of OperationsFor the Year
Page 36 and 37: Statement of Cash FlowsFor the Year
Page 38 and 39: (C)Claims PayableClaims payable is
Page 40 and 41: (N) Measurement UncertaintyThe prep
Page 42 and 43: 5. WILDLIFE DAMAGE COMPENSATION PRO
Page 44 and 45: of the program‘s administrative e
Page 46 and 47: Vacation pay liabilityThe amount re
Page 48 and 49: Remaining terms to maturities are a
Page 50 and 51: The Operating Credit Guarantee for
Page 52 and 53: The estimated farm loan incentives
Page 54 and 55: The Board of Directors is responsib
Page 56 and 57: 2012Scheduled Repaymentsnot Interes
Page 58 and 59: In addition to the financial protec
Page 60 and 61: Schedule 2:Schedule Of OPERATIONS A
Page 62: LENDING CORPORATE OFFICEUnit 100-15

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