“Unfortunately the CGC payment protection program does not guarantee 100 per cent payment. So producers need to take steps to protect themselves on their own.”
– REMI GOSSELIN
The fact that farmers owed money by West-Can Agra will not be fully compensated underscores the need for farmers to seek payment upon their grain’s delivery, the Canadian Grain Commission says.
“That time-old message can’t be repeated enough,” said CGC spokesman Remi Gosselin in an interview June 12. “It’s important too because of current (volatile) market conditions producers need to take extra steps to protect themselves.”
Last week the CGC announced 17 farmers who had not been fully paid by West-Can Agra Inc. in Plum Coulee when the CGC pulled its grain dealers’ licence Feb. 11 will get 66.1 per cent of what they were owed. West-Can had posted $300,000 in security but owed farmers $453,688.45, according to a CGC audit.
In addition, six farmers were ineligible because their claims fell outside the eligibility period. Farmers are only covered by a licensed company’s security for 90 days from the date they delivered their grain or 30 days from the date they were issued a cash purchase ticket or cheque, whichever is the lesser.
“Unfortunately the CGC payment protection program does not guarantee 100 per cent payment,” Gosselin said. “So producers need to take steps to protect themselves on their own.
“Obviously we strive for 100 per cent and we sympathize with producers who may not have gotten all of their money. It’s unfortunate that a situation like this has happened so make sure you get paid immediately.”
Gosselin declined to say why the CGC withdrew West-Can Agra’s licence other than that the firm “no longer met their licensing requirements.”
The year leading up to West-Can Agra’s delicensing saw wild swings in world grain and special crop prices and the value of the Canadian dollar.
West-Can is currently custom processing crops, which does not require a CGC licence, a company official said. Only firms buying grain by CGC grade names must be licensed, according to section 102. (1) of the Canada Grain Act.
Federal legislation that would no longer require grain buyers to post security to cover money owed to farmers is currently on hold. Agriculture Minister Gerry Ritz has said the program doesn’t work well enough and that farmers and grain companies should devise their own security plans.
A consultant’s review for farm groups concluded any replacement would have to be compulsory to be affordable.
Farm organizations have said they want the current system to remain until an acceptable replacement is ready to implement. [email protected]