Changes demanded at CGC

Reading Time: 2 minutes

Published: November 21, 2002

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.”

About the author

Sean Pratt

Sean Pratt

Reporter/Analyst

Sean Pratt has been working at The Western Producer since 1993 after graduating from the University of Regina’s School of Journalism. Sean also has a Bachelor of Commerce degree from the University of Saskatchewan and worked in a bank for a few years before switching careers. Sean primarily writes markets and policy stories about the grain industry and has attended more than 100 conferences over the past three decades. He has received awards from the Canadian Farm Writers Federation, North American Agricultural Journalists and the American Agricultural Editors Association.

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