Grain commission security program kicks in
Fourteen western Canadian farmers have been paid for crops delivered to an Ontario grain dealer that went into receivership in November.
A total of 28 claims were made under the Canadian Grain Commission’s Payment Protection Program after Bissma Pacific Inc., a Pickering-based company that mainly bought western Canadian pulses, went into receivership, said commission spokesman Rémi Gosselin.
Six were considered ineligible, 14 were covered by the program, and eight were paid by the receiver, Gosselin said.
Citing privacy concerns, Gosselin declined to say how much compensation farmers received even though the commission has released those figures in the past. Calls to the receiver were not returned by press time.
Companies buying any of the 21 grains and oilseeds covered under the Canada Grain Act directly from farmers require a licence from the commission and are obliged to post security to cover delivered grain. Should a company suffer financial difficulty or fail, the commission distributes the security to the affected farmers.
However, the security program is not guaranteed and amounts posted by companies are sometimes insufficient, which is why the commission recommends farmers seek payment upon delivery. The protection is limited in other ways too. For example, proper delivery receipts are required. As well, farmers are only covered by a licensed company’s security for 90 days after the date they delivered their grain or 30 days after the date they received a cash purchase ticket or other bill of exchange. The shorter of the two time periods applies.
The commission plans to change its security program later this year to an insurance-based scheme, which it says will be cheaper and more effective.