FNA announces MarketPower Assurance program

Farmers selling to the feedlot down the road or to a noodle maker in Japan can now insure their sale against default through the new MarketPower Assurance program offered by the Farmers of North America (FNA) and its partners Atradius Credit Insurance, Export Development Canada, and Pangaea Global Risk Management.

“It is literally the first time in history that a farmer can directly protect his sales and manage his risk with the same tools that benefited multinational corporations for a long period of time,” said FNA vice-president Terry Drabiuk.

“The MarketPower Assurance program will allow… any farmer to put themselves in the position of global traders.”

Farmers are already paying for sale insurance when they sell to grain companies as that cost is built into the basis, Drabiuk said.

The program is open to all farmers, but FNA members will share in any program profits through the company’s rewards program, he said.

The insurance, which will be available for all agricultural products, will cost less than one per cent of the value of the sale, said Douglas Roff, Atradius Credit Insurance’s national sales manager.

Atradius Credit Insurance is the world’s second-largest credit insurance company with 160 offices in 40 countries, said Roff. Farmers who purchase insurance are guaranteed 90 per cent of the sales value if the buyer fails to pay, he said.

Banks will also loan farmers money against insured sales, said Drabiuk, and that will free up working capital.

Until now it has been too expensive and time consuming to offer insurance to individual farmers, Roff said.

“Without FNA this program is simply not possible,” he said. “There’s simply no way for the private sector or Export Development Canada to provide reinsurance to cover all the farmers.”

Atradius Credit Insurance already has many buyers pre-approved and will add more to its “buyers’ pool” as farmers line up sales, Roff said.

Drabiuk said FNA is also considering getting into the brokerage business bringing buyers and sellers together.

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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