“While we regret producers didn’t get 100 per cent (of what they were owed) we worked diligently to maximize the amount they were paid for their deliveries,” Remi Gosselin, the CGC’s head of communications and corporate information services said in an interview Wednesday.

While most of the money comes from security W.A. Grain posted to cover farmer liabilities as required under the Canada Grain Act, some came through CGC efforts during the bankruptcy process.

Why it matters: While the Canadian Grain Commission tries to ensure grain companies post enough security to cover what they owe farmers for grain, sometimes, as in this case, it falls short. That’s why the CGC urges farmers to get paid upon delivery and cash their cheques immediately.

The CGC suspended W.A. Grain’s grain dealer licence and five primary elevator licences on April 20 last year; the company entered receivership April 26. Court orders were granted Sept. 23 approving the sales of the company’s five sites in Western Canada to three separate buyers.

The CGC determined 126 farmers owed money for grain delivered to W.A. Grain were eligible for a share of funds secured by the commission.

To qualify, farmers needed official receipts documenting deliveries, which had to have occurred within 90 days of delivery or 30 days of getting a cheque.

Of the $5.6 million in compensation, $4 million — representing about 71 per cent of the total — came through security W.A. Grain posted with the CGC, as is required under the Canada Grain Act, Gosselin said.

Just under $200,000 — 3.6 per cent of the total — came through the bankruptcy process.
The rest — $1.4 million — 25 per cent of the total — came from revenues earned when the receiver in bankruptcy sold W.A. Grain’s grain inventory.

“The Canadian Grain Commission had to intervene before the courts,” Gosselin said. “We used the Canada Grain Act to maximize compensation for all eligible producers. Under a distribution plan that was approved by the Court of Queen’s Bench eligible claimants were able to receive funds from three different pools of money.

“The CGC has always held that grain in inventory that was not paid for still belonged to producers. What happened in previous situations is that receivers would basically come in and liquidate all assets and then provide the money to secured creditors,” which didn’t include farmers who hadn’t been paid, he said.

The commission he said, has “successfully over the past few years argued before receivers and before the courts that that part of that money belongs to producers.”

In one case a few years ago some unpaid farmers were able to retrieve ‘like grain’ from a financially troubled grain company, reducing the amount of posted security needed to compensate farmers.

In the W.A. Grain case the $1.5 million shortfall in compensation averages more than $11,900 per farmer.

Ideally grain companies security held by the CGC should cover farmer liabilities, but that’s not always so, despite the CGC’s best efforts.

“An important point here is that the payment protection program at the grain commission never guarantees that producers will be fully compensated for licensee failures,” Gosselin said.

The commission, he said, fixes the amount of security to be provide by licensees based on monthly liability reports submitted by the licensees and licensees are responsible for the accuracy and completeness of those reports.

“If we feel there are some issues there we will conduct audits to make sure that reports have been completed properly.”

Those audits, he said, are done on the resources that are available at the grain commission for that purpose. Priority is put on audits of licensees about which the grain commission has received complaints from producers about slow payments, and/or where previous audits “have indicated problems.”

When the CGC suspended W.A. Grain’s license, it didn’t have enough security to cover what farmers were owed.

“I’d like to remind producers to cash their cheques upon receipt and if you don’t you’re lending your money to your grain company,” Gosselin said. “The best protection against the risk of failure is cashing cheques promptly.

“Over the last 30 years our payout record is 94 per cent of eligible claims.”

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man.

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The company paid US$11 million, reportedly to Russian-speaking gang REvil, in the ransomware attack after 13 of its American plants, along with its Brooks, Alta. facility and some in Australia, were forced to temporarily close.

The company processes approximately 23 per cent of the beef in the U.S. and that’s why it paid the ransom quickly. 

“The supply chains, logistics and transportation that keep our society moving are especially vulnerable to ransomware, where attacks on choke points can have outsized effects and encourage hasty payments,” cybersecurity expert John Hultquist told Reuters. 

In many ways, agriculture and agri-food businesses are ripe for the picking for cybercriminals. Canada’s ag sector is vulnerable because many farms and companies can’t adapt and respond to cyber threats as quickly as those threats are evolving, Cal Corley, the CEO of Community Safety Knowledge Alliance (CSKA) said in a news release. 

Earlier this year, the Saskatoon-based non-profit organization was awarded $500,000 from a federal program to assess and promote cybersecurity in Canadian agriculture over the next four years. 

“This initiative will help better understand and support the sector in closing critical gaps,” said Corley. 

A “rising wave” of digital agriculture — big data, automation, precision and smart farming, blockchain — is revolutionizing how food is produced but also upping cybersecurity risks, CSKA said. 

“The impacts of food supply disruptions can extend through the entire agricultural communities to provincial and national economies with potentially cascading costs reaching into billions of dollars and involving collateral damage to social stability,” the organization said.

“If technologies are implemented too quickly without (examining) how the various components fit together within a secure, farm-based cybersystem, the result could be smart farming that isn’t always secure farming,” added Jonas Botschner, lead researcher on the CSKA project. 

The organization will be reaching out to farmers and is inviting them to “start thinking about what they want us to know and what they feel they need to know,” he said.

How to protect yourself

There are some simple strategies farmers can employ, said cybersecurity expert Ritesh Kotak.

Small businesses such as farming operations usually can’t afford or access the same type of expertise that big companies can, so being aware that “anything connected to the internet is potentially vulnerable to an attack” is an important first step, said Kotak. 

He said he often finds that small-business owners use the same device for corporate and personal purposes, and some even use their personal email address for business transactions.

“Because of that, they are not able to address any issues as they are occurring, and (they are) making themselves more vulnerable.” 

Most security breaches are accomplished in low-tech ways, and email is most often the door that cybercriminals enter through, he said. 

“I always tell small businesses and individuals the most dangerous thing that you’re going to do today is open email,” he said.

It’s critical for farmers and their staff to be on the lookout for phishing emails. Among Kotak’s tips are:

• Don’t just look at the name of the sender but hover the mouse over the name. For example, an email from John Smith that should be johnsmith@gmail.com may appear as johnsmith@123ABC.com. 
• Look for spelling or grammatical errors and take note if the wording or tone seems unusual. Both are red flags.
• Think twice (or three times) before clicking on a link or an attachment, especially if this is not something the sender normally does.

A low-cost option as an added layer of protection is to have a cloud-based email system, such as Microsoft 365, added Kotak. If a suspicious email is identified, it is quarantined and is unlikely to cause harm. 

Understanding what he calls “cyber hygiene” is also key.

The first thing to look at is infrastructure. What software and hardware systems are used? Free software, such as video conferencing apps or file sharing apps, often fill an immediate need (as was seen in the beginning of the pandemic), but these can make a system vulnerable. 

Secondly, farmers need to know if their vendors have cybersecurity checks in place.

“Vendors also have a responsibility in this to make sure that their systems are protected,” said Kotak, adding they should be asked how data is stored, who has access to it, and whether it is encrypted and stored in a cloud-based system. 

Finally, he advises farmers to ensure they adequately back up their files. This can be as simple as having an external hard drive that should be used daily. Alternatively, people can use a cloud-based program such as Microsoft 365 and ensure files are saved in OneDrive.

Kristy Nudds is a reporter with Farmtario. Her article appeared in the June 14, 2021 issue.

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However, the potential for farmers not getting what they are owed has been reduced, CGC spokesman Remi Gosselin said in an interview Friday.

“We do believe the company has returned the majority of their inventory back to producers who hold primary elevator receipts,” he said.

Gosselin couldn’t specify the volume, but said “it’s significant.”

Why it matters: While CGC-licensed grain companies are obliged to post security to cover what farmers are owed for grain they deliver, but haven’t been paid for during a specified period, sometimes it’s not enough. The more beans farmers retrieved from the elevator means fewer farmers will have to rely on the security to be made whole.

The CGC on Oct. 30 suspended Global Grain’s license, and that of two related companies — Globeways Canada Inc. and Canpulse Foods Ltd., located at Mississauga. Ont. and Kindersley, Sask., respectively — after being notified the firms no longer had security to cover money owed to farmers.

All three companies were placed in receivership Thursday, Gosselin said.

Meanwhile, the CGC has access to $1.25 million in security from Global Grain, $6.5 million from Canpulse Foods and $50,000 from Globeways Canada.

The latter was not doing much direct business with farmers, while the former had not been buying much grain from farmers during the three months before the CGC suspended its license, Gosselin said.

“It may not be an overall good situation, but what it’s doing is making a potentially bad situation a little better,” Daryl Domitruk, executive director of the Manitoba Pulse and Soybean Growers Association, said in an interview Thursday.

“From the grower perspective the ideal would be the company would remain in business and everyone gets paid, but given the circumstances it was fortunate that a lot of growers, apparently, were able to retrieve their beans. That’s going to be helpful to the sector. I have no idea of numbers, but we know there were lineups of trucks at Plum Coulee. There obviously are some people in the system that were being good actors. I think that’s helpful for the industry.”

The CGC has long contended grain sitting in elevators that hasn’t been paid for remains the property of the farmers who delivered it. That’s spelled out in the Canada Grains Act: “The holder of an elevator receipt is entitled to the delivery of grain of the same kind, grade and quantity as referred to in the elevator receipt.”

However, failed grain companies’ secured creditors have argued stored grain is just another asset to be liquidated to cover what they are owed.

With Global Grain it appears the beans were retrieved by farmers before it went into receivership.

“Our view is that if producers delivered grain to an elevator, but they had not been paid for it, it’s theirs,” Gosselin said.

Last year the CGC was preparing to put the issue to a legal test after another pulse crop buyer, ILTA Grain, went into creditor protection while owing farmers millions of dollars for their crops.

“That matter was never settled, but what happened there sort of tweaked producers to their rights as to grain in inventory,” Gosselin said.

The best way to ensure farmers get paid for their grain is to request payment upon delivery, he said.

CGC security only applies for 90 days after a farmer receives an elevator or grain receipt. Farmers have just 30 days of protection after getting a cheque, but within that 90-day period.

“Let’s say for example you are on day 89, you’ve got one day left to cash a cheque to remain eligible,” Gosselin said.

If the cheque is cashed on day 91 and bounces the farmer is ineligible for security payments, he said.

“We have tremendous respect when the Canadian Grain Commission gets involved in these things,” Domitruk said. “We’d advise growers to heed their advice. It’s better to heed their advice than to learn the hard way.”

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man.

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The CGC suspended the licenses of all three for 30 days effective Saturday after it was notified the firms no longer had security to cover money owed to farmers, CGC spokesman Remi Gosselin said in an interview Saturday.

“Producers who are owned money by these three companies should contact the CGC as soon as possible,” Gosselin said.

The CGC is holding security for liabilities incurred before Oct. 31, but Gosselin declined to say how much.

Why it matters: Farmers who haven’t been paid for grain delivered to these three entities may be eligible for security held by the Canadian Grain Commission — but they must contact the commission.

The three companies are inter-related through a common controlling interest with Globeways Canada Inc., headquartered in Mississauga. Ont.

Global Grain Canada has a primary elevator at Plum Coulee, Man., and Canpulse Foods has one at Kindersley, Sask.

“We will be conducting an audit next week so at this point it’s too early to tell if there is enough security in place to cover liabilities prior to Oct. 31,” Gosselin said. “But each of the entities had security.

“We suspended their license for 30 days to allow them to obtain alternate security coverage if they can.”

If they can it’s possible the companies could once again be licensed by the CGC and resume buying grain from farmers, he added.

“Now the priority for us is to make sure there is adequate security in place to cover deliveries prior to Oct. 31 and that the producers that delivered to them are not at risk of non-payment,” Gosselin said. “So we’re asking producers that haven’t gotten paid, or are still getting payment to contact us.”

Gosselin stressed the safest strategy for farmers is to get paid when they deliver grain.

Under the CGC’s producer payment protection program licensed buyers are obliged to post security to cover money owed to farmers for delivered grain. But the protection is for a limited time.

Coverage only applies for 90 days after receiving an elevator or grain receipt. Farmers have just 30 days of protection after getting a cheque, but within that 90 days.

“Let’s say for example you are on day 89, you’ve got one day left to cash a cheque to remain eligible,” Gosselin said.

If the cheque is cashed on day 91 and bounces the farmer is ineligible for security payments, he said.

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The CGC announced Monday that 222 eligible unpaid growers will receive a total of $11.146 million covered by the security ILTA posted before it was put under creditor protection last July.

Payments have been issued and will be delivered “in the coming days,” under the commission’s Safeguards for Grain Farmers Program.

Under the program, CGC-licensed grain companies have to tender security for outstanding grain liabilities in the form of either a bond, letter of credit, letter of guarantee or payables insurance. If a licensed company defaults on paying farmers, the CGC uses the security to compensate those eligible.

Producers must submit claims for compensation within 90 days of delivery or within 30 days from the date the cash purchase ticket or cheque was issued, whichever is less.

Following ILTA’s default, the CGC assessed 271 producer claims, which the commission noted was “the largest number ever received against a company’s security.”

ILTA’s default also represents the largest total security payout in CGC history, the commission said — although not all affected producers who made claims are eligible for payment in this case.

That’s partly because some farmers were owed money for canary seed deliveries, which aren’t regulated under the Canada Grain Act. That group includes 44 farmers, who are still owed about $2.1 million.

Other ineligible producers had amounts outstanding for deliveries made outside the program eligibility period, the CGC said. Those producers and the canary seed growers will be left to seek whatever assets are left available for ILTA’s unsecured creditors. The company’s primary secured creditors include HSBC and Farm Credit Canada.

“The ILTA Grain Inc. situation has been a difficult one for everyone involved, and we are very pleased to be able to deliver over $11 million in payments to producers who were owed money,” CGC chief commissioner Patti Miller said in Monday’s release.

Having suspended ILTA’s licenses in July, the CGC in August allowed ILTA to operate its primary elevators at Saskatoon and Belle Plaine, Sask. and to carry on business as a grain dealer “under specific conditions.”

Among those conditions, ILTA wasn’t allowed to buy or receive grain from producers, but was able to ship out remaining stocks of grain, a task it completed in mid-October.

For producers who had delivered grain into ILTA’s stocks but hadn’t received documentation, the CGC negotiated the setup of an escrow account worth about $3 million, above and beyond ILTA’s payables insurance policy.

Atradius, the insurance company covering ILTA’s payables, wired $11.146 million to the CGC on Dec. 27 to cover the eligible claims — including claims by producers who had delivered to ILTA but didn’t receive documentation.

HSBC, as a secured creditor, has a hearing scheduled at the Supreme Court of B.C. in Vancouver on Thursday and Friday this week. According to PwC Canada, which is serving as ILTA’s court-appointed monitor, HSBC is seeking an order to get $11 million PwC has been holding in trust pending the outcome of the CGC claims process, plus the money in the escrow account.

‘Could not pay’

The CGC said Monday it generally recommends producers limit their risk of financial loss by requesting payment for each load at time of delivery. Past that, producers who see delays in being paid for grain should contact the CGC “immediately.”

But according to Atradius in court documents it filed Dec. 30, it had been ILTA’s practice to mail out elevator and grain receipts and cash purchase tickets after the fact, historically within a week of receiving grain.

However, according to Atradius, as ILTA “began to experience liquidity issues… this delay grew to as much as 28 days.

“In other words, despite its liquidity issues, ILTA continued acquiring grain from producers at a time when it could not pay for it (and) did not pay the producers for their grain, and in fact delayed payment to the producers.”

Atradius will be in court this week disputing HSBC’s claim to the money from the sales of grain ILTA had on hand. The insurer in this case will be the “subrogee” for the farmers to whom it has already paid out on its policy via the CGC, which means it “steps into the shoes of the producers who are precluded from double recovery.”

In its Dec. 30 response to HSBC’s application, Atradius contends that ILTA “failed to issue valid (cash purchase tickets) and therefore did not acquire title to (the unpaid producers’) grain.”

‘Challenging conditions’

ILTA was formed in Surrey in 2011 by former managers of specialty crop export firm Finora, after that company’s owner, Noble Group, sold Finora and its four plants in Saskatchewan and Alberta to AGT in 2009.

According to an affidavit last July, the company, which deals mainly in pulse crops, faced “increasingly challenging international trade conditions” in recent years affecting its business in export markets including India, China and Saudi Arabia.

Since it entered creditor protection, ILTA’s crop handling and processing facilities have been sold off to assorted buyers, starting with Viterra, which bought the ILTA pulse facility at Belle Plaine, Sask. in August.

In November, court approvals were granted for the sale of ILTA’s processing plant at Saskatoon to containerized crop handling firm DG Global, and for four other Saskatchewan sites — two at North Battleford and one each at Swift Current and Cut Knife — to be sold to an arm of trading firm ETG Commodities. — Glacier FarmMedia Network

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The Saskatchewan Court of Appeal, in a ruling issued Friday, set aside a 2018 Court of Queen’s Bench “finding of unconscionability” and sent the matter back to the lower court to determine damages and enforcement of security owing to Input.

The court on Friday also awarded Input Capital costs for the appeal. No date has yet been set for the case to return to Queen’s Bench, Input chief financial officer Brad Farquhar said via email Monday.

Input CEO Doug Emsley said Monday the company “always knew our streaming contracts and dealings were fair, balanced and reasonable, and this decision confirms that. We look forward to continuing to serve our farm clients with this cloud of uncertainty removed.”

Queen’s Bench Justice Jeffery Kalmakoff, in May last year, had ruled largely in Input’s favour in a pair of actions the company filed against Terry Gustafson, a farmer at Macoun, Sask., about 30 km northwest of Estevan.

The Regina company had filed against Gustafson in 2015 claiming breach of contract, and again separately claiming same in 2017.

Kalmakoff in May 2018 found he was “unable to conclude” that the contracts Gustafson signed with Input should be rescinded, and ordered the farmer to pay the company $4.4 million, plus interest and “taxable costs.”

But in this specific case’s circumstances, Kalmakoff also ruled the various agreements between Input and Gustafson were “unconscionable” and “must be set aside.” Input filed an appeal later that month over Kalmakoff’s interpretation of its contracts.

Writing Friday for the appeals court, Justice Neal Caldwell found Kalmakoff “erred in his interpretation of the agreements and misapprehended the contractual relationship between the parties.”

(Kalmakoff was appointed to the Court of Appeal in May this year but was not on the three-member panel of judges hearing the appeal of his Queen’s Bench ruling.)

‘Commercially reasonable’

Publicly-traded Input deals in canola obtained from Prairie farmers by way of “multi-year streaming contracts,” including capital streams, marketing streams and, more recently, “mortgage streams.” (In May this year it halted its plans to further expand the mortgage streaming business, for lack of “options for cost-effective scalable funding.”)

The company’s canola purchases generally involve up-front payments in return for agreed-upon tonnage over a specified number of years. At the end of June, it reported a total of 406 active streaming contracts in the West, including 290 in Saskatchewan alone.

The court heard Gustafson — who at the time farmed 15 owned and 85 rented quarter sections — had agreements with Input including a purchase agreement for canola in April 2014; a streaming canola purchase contract later that month with a collateral mortgage and collateral security agreement; a streaming contract in late December that year, with a collateral security agreement and mortgage amending agreement; and an “amending agreement” in late March 2015.

Kalmakoff had found that when Gustafson didn’t deliver as required in 2014, Input instead advanced the farmer more money and negotiated a second contract making his delivery obligations “much more onerous.”

Input, Kalmakoff found, wound up in a position of “increasing strength while driving Mr. Gustafson into a position of increasing weakness in their contractual relationship.”

But the appeals court on Friday said Kalmakoff’s ruling found Gustafson Farms had “failed or declined to deliver any canola to [Input] in 2014 and 2015” while selling over 2,750 tonnes of canola in 2015 to other buyers, “plainly selling again the canola it had already sold to [Input].”

Caldwell on Friday found “it was an error for the trial judge to interpret the agreements as containing no risk to [Input]… Indeed, the two actions before the trial judge arose because the considerable risk [Input] bore under the agreements had materialized.”

Caldwell found Kalmakoff “overlooked the legal requirement that a creditor must always exercise its security in a commercially reasonable manner and, generally, under the supervision of the courts.”

The appeals court found “the escalation of Gustafson Farms’ contractual obligations does not indicate [Input] was taking increasing advantage of Gustafson Farms; rather, it indicates [Input] was properly exercising its rights under the earlier agreements in a commercially reasonable manner.”

Caldwell also found the terms of the security interests Gustafson granted to Input “are not divergent from community standards of commercial morality.”

Rather, he wrote, “there is simply no other way [Input] could have legally secured its advances or ensured the delivery of canola under the streaming contracts, particularly when Gustafson Farms has all the benefits and protections made available to farmers under debtor-protection legislation.”

If, he wrote, the arrangements between Input and Gustafson were “unconscionable by reason of the nature of the security interests… then all other secured agricultural lending arrangements are too.”

It’s not yet known how Friday’s ruling will affect other cases involving Input, among them a proposed class action filed on behalf of affected farmers by Regina lawyer Tony Merchant, alleging “predatory lending practices” by the company.

Merchant filed in May last year in Regina for representative plaintiff Morris Feduk of Melville, Sask., proposing a “class” of everyone who has had a contract with Input since October 2009 or has been “damaged by seizure” of assets by Input.

Merchant was quoted by CBC Monday as saying that while the appeals court found Input’s dealings in this case weren’t unconscionable, the ruling is “not a vindication” of the company’s methods and he feels a class action can still be argued in court. — Glacier FarmMedia Network

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The CGC on Thursday suspended the Surrey, B.C.-based company’s grain dealer’s license and its primary grain elevator licenses for elevators at Belle Plaine and Saskatoon, Sask., Remi Gosselin, the CGC’s manager of corporate information services, said in an interview the same day.

“If you’re owed money by this company, contact us immediately,” he said. The CGC can be reached by phone at 1-800-853-6705 or by email.

The firm providing ILTA with security to cover farmer liabilities terminated its coverage Wednesday, Gosselin said.

“If you do business with this company after July 10, 2019, you will not be protected by security under the Canada Grain Act,” the CGC’s website warns.

ILTA Grain, operating since 2011 primarily in pulse crops, was granted creditor protection Monday by British Columbia’s Supreme Court as it tries to restructure.

“The decision to file for (creditor protection) was made after careful consideration and in our view, is a necessary step for the company to address its financial structure, protect all stakeholders and secure additional financing to fund the continued development of our business,” ILTA CEO Dan Burneski said in a letter to grain suppliers dated July 9.

An affidavit filed July 7 noted “increasingly challenging international trade conditions” in recent years affecting ILTA’s business in export markets including India, China and Saudi Arabia.

Current management will continue to operate the business and will lead the restructuring process, the company said.

According to Pricewaterhouse Coopers Inc. (PwC), the court-appointed monitor, ILTA will seek court approval Friday for interim financing and for authorization to start a sales process for its assets and operations.

All balances outstanding prior to Monday’s filing date are stayed and will not be paid by the company, according to Burneski’s letter.

However, that doesn’t apply to security posted with the CGC to cover what’s owed to farmers for delivered grain they haven’t been paid for.

The question is: Was enough security posted to cover what farmers are owed? The CGC is investigating that now, Gosselin said.

The affidavit lists HSBC Bank Canada, Export Development Canada and Farm Credit Canada as secured creditors. ILTA’s unsecured creditor list as of Thursday lists over $15 million in claims from farmers, largely in Saskatchewan, and various companies across Canada and the U.S.

ILTA was formed in Surrey in 2011 by former managers of specialty crop export firm Finora, after that company’s owner, Noble Group, sold Finora and its four plants in Saskatchewan and Alberta to AGT in 2009.

ILTA’s other Saskatchewan facilities today include sites at Swift Current, Cut Knife and North Battleford, which is also the site of the company’s processing head office.

ILTA previously had an edible bean processing plant at Bloom, Man., near Portage la Prairie, and a satellite receiving operation at Miami, Man., but sold both in January to Ontario-based Hensall District Co-operative.

— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man. Includes files from MarketsFarm and Glacier FarmMedia Network staff.

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Canadian Exotic Grain’s grain dealer license was revoked April 26 after the company was unable to pay producers. On June 4, Saskatchewan Pulse Growers posted on its website that it had been told by the CGC that Canadian Exotic Grains was no longer licensed.

A notice on the Deloitte Canada website stated that as of July 17, Canadian Exotic Grains had filed a notice of creditors of intention under the Bankruptcy and Insolvency Act.

The Eston, Sask.-based specialty crops company, at a court hearing Aug. 8 in Saskatoon, was granted until Sept. 28 to file a proposal, amongst other relief.

The company, incorporated by area farmer Gary Schweitzer in 2009, grew and also marketed crops such as lentils, chickpeas and coriander. Schweitzer later retired, stepped out of the company’s day-to-day operations in 2014 and moved to Medicine Hat.

According to CEG’s application documents filed with Court of Queen’s Bench, the company’s revenues had “significantly declined” in recent years for reasons including poor crop years in 2016 and 2017, “uncollected receivables” and the inability to secure operating financing.

The uncollected receivables, CEG said, followed the 2013 bankruptcy of Quebec food processing firm CLIC International, whose assets were later bought by Saskatchewan pulse processor AGT.

CEG said a “key” employee and shareholder also quit around that time, which led the company to sell its landholdings and focus solely on grain marketing.

The CGC said Tuesday it investigated a number of non-payment claims against CEG, determining finding four producer claims eligible for compensation. Those producers were fully covered under the security CEG posted under the terms of its license.

Licensed companies have to provide a security to CGC to cover amounts owed to producers for grain deliveries; if a company is unable to pay for grain that has been delivered, the security is used to compensate producers.

A number of claims against CEG were deemed ineligible, however, because they were not submitted on time, the commission said.

To be eligible for compensation, producers had to submit their claims within 90 days of delivery or within 30 days from the date the cash purchase ticket or cheque were issued, whichever is less.

CEG’s secured creditors include Farm Credit Canada and the financing arm of equipment firm Agco. Other listed creditors with claims over $250 include a relatively small number of farmers. –– CNS Canada, with files from GFM Network staff

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Regina-based Input Capital Corp. said Monday it has filed a notice of appeal with the Saskatchewan Court of Appeal over a May 17 ruling by Court of Queen’s Bench Justice Jeffery Kalmakoff.

Input had taken Terry Gustafson, a southeastern Saskatchewan farmer, to court in 2015 and again last June, alleging breach of contract over his unmet canola delivery obligations against several upfront payments made by the company.

Publicly-traded Input deals in canola obtained from farmers by way of “multi-year streaming contracts,” generally involving upfront payments in return for agreed-upon tonnage over an agreed-upon time frame.

For farmers, the company bills itself as acting “like a virtual grain company, buying canola and providing financial solutions.”

Past what it described as its “successful outcome” in the court case against Gustafson, Input said Monday it “believes the trial judge erred on several accounts with respect to the interpretation of the streaming contracts and security.”

In its June 2017 action, Input had sought judgment against Gustafson worth $7.43 million plus foreclosure of a mortgage or judicial sale of mortgaged lands.

Kalmakoff on May 17 instead ordered Gustafson to repay the company $4.4 million — representing almost all of what Input had fronted to Gustafson — plus interest and “taxable costs.”

Although Kalmakoff found Gustafson was “unjustly enriched” by the upfront payments and must repay that money, the judge also ruled the various agreements between Input and Gustafson “must be set aside as unconscionable” — thus invalidating the other security interests Input sought to claim.

As its agreements with Gustafson piled up in 2014 and 2015, Input wound up in a position of “increasing strength while driving Mr. Gustafson into a position of increasing weakness in their contractual relationship,” Kalmakoff wrote, ruling the contractual relationship to be “substantially unfair.”

As of March 31, Input reported a total of 353 active streaming contracts with farmers across the three Prairie provinces, including 260 in Saskatchewan. — AGCanada.com Network

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The CCGA on Thursday announced it’s now accepting applications for the 2017-18 advance payments program (APP), which offers cash advances on 45 different crop and livestock commodities. The CCGA is the administrative agency for the federal program.

This year’s list of commodities includes quinoa for the first time, the CCGA said in a release.

The CCGA said Thursday it will now also accept Moose Jaw-based Global Ag Risk Solutions’ production cost insurance plan as a form of security on field crop advances, alongside crop insurance and AgriStability.

The CCGA also noted Thursday it has moved to a single common form for all applicants, replacing its previous “province-specific” application form. “Regardless of which province you farm in, you will use the same application.”

Producers can download the new form from the CCGA website or apply online. The forms are also available at “most” elevators and grain processing plants.

The APP provides eligible producers with cash advances of up to $400,000, with the first $100,000 being interest-free and an additional $300,000 interest-bearing at prime rate.

“The spring cash advance program provides farmers with access to cash flow on their unharvested crops and newly born livestock,” CCGA CEO Rick White said in Thursday’s release.

“We’ve already been getting calls from farmers, so we are pleased that in the first full week of March we are ready to launch our pre-application process.”

Though CCGA has kicked off its pre-application process now, to allow farmers to get the paperwork done before spring seeding, the association begins issuing advance funds on April 3, White noted. — AGCanada.com Network

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