Frank Reimer thought he was making a reasonable business decision when he let his grain dealer and primary elevator licences expire in mid-February.
After two years of failed bean crops in southern Manitoba there wasn’t likely to be much product delivered to his two elevators in Plum Coulee, Man., until the 2006 crop was taken off.
So he figured he’d save a few dollars by not renewing the licences for his company Global Grain Canada Ltd. until farmers were ready to start selling again.
“Why have a licence and other expenses when no product is coming in anyway?” Reimer said last week.
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What he didn’t realize, he said, was that the decision would result in the Canadian Grain Commission issuing a formal announcement that the licences had not been renewed and start the process of paying farmers owed money by the company using the firm’s security deposit.
“If I had known there would be all this negative publicity, I probably wouldn’t have allowed it to lapse,” Reimer said. “I’m worried producers will get the wrong impression.”
In fact, he said, he intends to renew his licence and get back into business, perhaps as early as this week. Global paid about $13,000 for a licence and a $500,000 security bond.
Following the commission’s announcement, Reimer said he received lots of calls from farmers and others in the industry wondering what was going on and whether the 10-year-old company had gone out of business.
“That’s definitely not the case,” he said, pledging that the firm will pay any money owing to producers out of its own coffers so there will be no need for the commission to dip into the company’s security deposit to settle accounts.
Reimer acknowledged the bank had issued a call on Global’s loan but said the company was able to pay it off and negotiate new financing arrangements.
Grain commission spokesperson Reg Gosselin said the licence was not renewed because Global failed to meet certain licensing requirements set out by the regulatory agency.
“We told him (Reimer) what was needed and he didn’t do it,” he said, adding he had no comment on what might have motivated Global’s actions.
While licences are generally issued annually, Global had for some time been operating with shorter term licences in anticipation that the company would be able to fulfil the requirements for a one-year renewal, said Gosselin.
The commission has asked producers who are owed money by Global to submit claims by March 31. Producers are eligible for payment if they hold a grain or elevator receipt, and delivered their grain no more than 90 days before the Feb. 14 expiry or hold cash tickets dated no more than 30 days prior.
Gosselin said that even if Global renews its licence immediately, the claims would continue to be processed. The only thing that would stop that would be if Global paid all the money owed to farmers.
The grain commission has announced that all grain dealers will have to be licensed by August 2006 or face fines or closure or both.
That was welcomed by Reimer, who said companies who chose not to be licensed gained an unfair advantage over those who did.
“It’s an unfair playing field when some are allowed to operate and not have to spend the money to put up a bond,” he said.
Global Grain handles between 65 and 70 million pounds of beans annually, representing yield from about 50,000 acres, or about one-quarter of total Manitoba production.
