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A cheaper CGC producer protection plan

A fund would be cheaper than bonding but it would require changes to the Canada Grain Act

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?”

About the author

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Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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