Some farmers will again miss compensation

Another grain buyer has left farmers unpaid for grain deliveries. And yet again, some producers will be outside of the timelines required for compensation under the Canadian Grain Commission’s licencing and bonding program.

This time it’s Purely Canada Foods with its facilities in Avonlea, Kindersley and Lajord, Saskatchewan. Those in the grain trade are not surprised. The company has been struggling to pay its bills for some time.

A farmer contacted me saying he has been unpaid for grain deliveries dating back to early in the calendar year. “Why weren’t we told about the deadlines to make claims?” he asked.

“Well, I’ve written and spoken about it many times and the Canadian Grain Commission does it’s best to publicize the eligibility requirements. They’ve been the same for as long as I can remember,” I said.

Maybe farmers figure this will never affect them or maybe there’s so much information clutter the message doesn’t get through.

For the record, one more time, here are the timelines for filing a non-payment claim. The lessor of these two time periods applies.
• 90 days from the date of each grain delivery
• 30 days from the date a cash purchase ticket or cheque is issued, regardless of the date on it

In most, but not all previous cases, the bond has been adequate to fully compensate eligible, unpaid producers. It takes a while, but farmers do get paid.

Because of the timelines to be eligible for compensation, asking for deferred payment is not a good idea. Thirty days after payment is issued, protection ends.

Some farmers say that with the string of defaults in recent years, they only deal with the major grain companies. While smaller companies are the ones who have traditionally run into financial trouble, these players bring competition to the marketplace and are a valuable asset.

Rather than avoiding them, make sure they are licenced and bonded and if you run into a payment issue make sure you let the CGC know within the eligibility timelines. If you deal with a buyer that’s not licenced and bonded, make sure you have provisions in place to ensure payment.

Purely Canada isn’t a major player in grain markets, but its parent company Above Foods has widespread assets with interests ranging from food ingredients to quinoa to pet food. It owns the Discovery Seed Lab in Saskatoon. Above Foods has continued to make acquisitions and began trading on the Nasdaq on July 1. Share prices have declined dramatically since the initial listing.

How the issue proceeds from here is anyone’s guess. I don’t recall an instance of a company surviving once its grain licence was revoked, but in this case there’s a larger parent company.

ILTA Grain was another significant company that in recent times left farmers unpaid. It had new and expensive grain handling assets which ended up being sold to other players. In that case, many farmers were ineligible for compensation. This is likely to again be the case with Purely Canada.

With the major grain companies, you can typically be paid immediately after delivery. With smaller companies, it’s not unusual for specialty and pulse crop contracts to stipulate payment within 10 days or 14 days of delivery. If payment doesn’t come as stipulated, there’s still lots of time to contact the Canadian Grain Commission and let them know you’re concerned.

The compensation program exists to help farmers, but we also have to help ourselves to make sure we remain eligible.