With its members facing hundreds of thousands of dollars in losses,
Saskatchewan Pulse Growers is demanding changes at the Canadian Grain
Commission.
Earlier this year the commission determined there wasn’t enough
security to fully reimburse farmers who delivered grain to Naber Seed
and Grain Co. Ltd., a Saskatchewan processor that was placed into
receivership this summer.
The shortfall is somewhere between $700,000 and $800,000, an amount yet
to be finalized by the company that issued the bond.
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“We were surprised by the shortfall in the bond in the case of the
Naber bankruptcy. It is unacceptable,” said Pulse Growers chair Glenn
Annand.”Producers delivered to Naber assuming they would be covered in
the event of non-payment. We are calling on the federal government and
the CGC to cover the shortfall in the Naber bond.”
In a position statement on producer security, the grower group said it
wants the commission to be liable for all future shortfalls in
receiverships and bankruptcies.
It is also demanding that the commission increase its monitoring of
licensed pulse buyers “until a more universal, affordable system of
licensing and bonding is established.”
Commission spokesperson Paul Graham said covering the shortfall would
require a change in the Canada Grain Act, which states that the federal
government is not liable in cases where the security bond is smaller
than what is owed to farmers.
“I think it’s based on the very sensible idea that it’s virtually
impossible to guarantee that security will always match liabilities.”
He said that to ensure farmers are fully covered every time they
deliver grain to a licensed facility, the commission would need one
employee for each licensed facility to review the books on a daily
basis.
Right now the commission looks at each processor’s books about once a
month on average because there are only three auditors reviewing more
than 100 companies. Graham said the commission wants that ratio changed
and is drafting a budget requesting that Ottawa give it more money.
“We want to beef up our resources, there’s no question about that,”
Graham said.
Since the Naber incident, CGC has been paying closer attention to
companies showing signs of weakness, he added, but its watchdog role is
limited by its bankroll.
“We’ve got finite resources and we’re trying to get more. If we can get
more resources, we would be able to increase our monitoring over and
above what we do.”
One analyst thinks more government involvement is a step in the wrong
direction, especially if it involves covering a shortfall in cases when
the posted bond isn’t sufficient.
“Such an argument only holds water if the CGC can be shown to be party
to an effort to fraudulently represent outstanding liabilities with
growers,” said Brian Clancey, publisher of the Stat Publishing markets
newsletter.
“If companies do not properly issue grain delivery receipts and-or
fraudulently hide transactions in their books, the CGC cannot be held
to blame.”
