Over opposition party protests, the Liberal majority on the House of Commons agriculture committee last week approved legislation to create a new insurance policy for western Canadian special crops producers to protect them from losses if dealers or buyers go bankrupt before paying their bills.
The legislation now goes back to the Commons for final debate and passage before heading off to the Senate.
It replaces a system of expensive bonding for dealers and buyers. Under the proposed new legislation, buyers will have to be licensed.
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At the committee meeting April 22, Winnipeg Liberal John Harvard, parliamentary secretary to the agriculture minister, said the new system is what special crops producers have requested.
It will encourage development of a wider network of special crop buyers.
“We think a good majority of producers and agents will support this,” he said.
But Reform and Conservative MPs, reacting to arguments made by a parade of prairie witnesses last week, said the insurance scheme should be voluntary.
As outlined by Bill C-26, farmers will be able to opt out of the coverage. But when they deliver their product, all special crops farmers still will have to pay a levy to finance the insurance. If they have notified the Canadian Grain Commission they want to opt out, the levy collected will be refunded at the end of the year or some other date set out in regulations.
Shouldn’t have to pay
On April 21, a number of farm representatives appeared before the committee to argue that an opting-out farmer should not have to pay the levy up front and then be reimbursed.
Reform agriculture spokesperson Jay Hill championed their cause.
“All of the (witnesses) were adamant that this should be voluntary and not a tax on farmers, which they can ill afford,” he said.
Brandon Conservative MP Rick Borotsik called the pay-now-and-get-it-back-later scheme a “negative billing option” which consumers reject.
But Harvard said it is the best and most efficient way to organize the insurance program to protect special crop producers.
“We cannot have this type of insurance plan without maximizing producer participation,” he said.
He also argued that automatic deduction with the right to a refund provided the most “administrative efficiencies.”
