Ontario farmers will want to make sure any arrangements they make to defer payment on their delivered crops run no later than the end of June 2012, according to the province’s grain grower group.
Ontario’s Ministry of Agriculture, Food and Rural Affairs (OMAFRA) has amended its regulations on deferred payments as a temporary measure to protect farmers from coming into “non-compliance” with sections of the provincial Grains Act.
As a result of this regulatory change, it’s “business as usual” in producer/elevator arrangements regarding deferred payments, through to July 1, 2012, according to a release Friday from the Grain Farmers of Ontario (GFO).
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Until then, “elevators and producers entering into deferred payment arrangements will not be subject to compliance or enforcement activities by Agricorp,” GFO said, referring to the province’s farm program delivery agency.
“However, other provisions of the Grains Act will continue to be enforced.”
Any deferred payment arrangements entered into going forward between a producer and elevator should not have a settlement date that extends beyond July 1, 2012, GFO said.
The growers’ organization and the Ontario Agri Business Association (OABA) plan to meet “early in 2011” with Agricorp and OMAFRA to deal with what GFO called an “important business practice” within the Grains Act.
The aim of the meeting, GFO said, is “to have this situation permanently resolved well in advance of the July 1, 2012 deadline.”
Deferrals of payment to farmers are a relatively common practice for grain elevators and dealers, usually undertaken at the farmer’s request for tax or other business reasons.
But language in the 1990 Act expressly requires dealers to pay growers for grain within 10 business days of delivery, or by 2 p.m. the next trading day if the grain is sold out of storage.
OABA warned its grain dealer members recently that Agricorp planned strict enforcement of the Act starting next month. The agribusiness group publicly urged licensed grain dealers to clear any deferred-payment arrangements with growers off their businesses’ books by early January.
An ag ministry spokesperson said Thursday that OMAFRA had promised recently to look into the issue of deferred payments, after an unnamed grain elevator in southwestern Ontario’s Lambton County went out of business.
But then the office of provincial Agriculture Minister Carol Mitchell last week said that while the province is consulting with grain growers, dealers and elevator operators on the matter of deferred payments, “farmers will be allowed to operate as they always have.”
GFO and OABA on Friday hailed Mitchell “for her swift action in making the necessary regulatory change to facilitate deferred payments until a permanent solution is reached.”
