A fund to cover farmers when grain companies fail to pay them is a cheaper way to protect producers than the current ‘bonding’ system, says the Canadian Grain Commission’s assistant chief commissioner Doug Chorney.
However, before a change can be made the Canada Grain Act has to be amended and that’s up to the minister of agriculture and ultimately Parliament, Chorney said on the sidelines of the Keystone Agricultural Producers advisory council meeting here Aug. 9.
“We have ideas on how we could move forward, which we will come back and consult about,” Chorney added.
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“A lot of work has been done by our staff to show how that could benefit and provide better payment security and take cost out of the system. So we’re open to looking at it as well, but we need an act change.”
Currently licensed grain companies must post security to cover what’s owed to farmers. But sometimes the security falls short and farmers aren’t fully compensated.
The current system costs about $9 million a year and it’s presumed the cost is passed back to farmers, Chorney said.
“Over 20 years, every 18 months we have a $1-million to $1.5-million default,” he said. “So we’re paying $9 million a year to solve a $1-million problem every 18 months. That’s not efficient. It works, but is it the best path forward?”
