Farmers lose out in Naber shortfall

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Published: September 12, 2002

Farmers owed money by a failed Saskatchewan pulse processor will be

getting 55 cents on the dollar.

Three months after Naber Seed and Grain Co. Ltd. was placed into

receivership by its bank, the Canadian Grain Commission has determined

that the company’s bond falls far short of what farmers are owed.

Commission spokesperson Paul Graham said a few details have yet to be

worked out but it looks like there are between $1.7 million and $1.8

million in eligible farmer claims on Naber’s $1 million bond.

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“We have a shortfall,” he said.

Shaunovan, Sask., farmer Alan Stevenson is one of dozens of unsecured

producers laying claim to that $1 million bond. He is owed $53,261.52

for the laird lentils he delivered to Naber’s plant this spring and is

miffed the agency that is supposed to protect him will only be sending

him a cheque for a little over half that amount.

“It rather pisses me off,” said Stevenson.

“As far as I’m concerned, the commission advertised Naber Seeds as

licensed and bonded and to not come up with it all, they’re simply

reneging on what they advertised.”

Graham said the commission is only able to monitor grain company

liabilities on a monthly basis and based on Naber’s last review the

company’s security was in line with its liabilities.

The only way to ensure farmers get every penny they are owed would be

to have a person auditing the company’s books daily, said Graham.

“It is physically impossible to do that because we lack the resources

and it’s also politically impossible as well.”

The existing monthly liability reviews are not foolproof.

“They don’t show the swings up and down that companies go through from

day one to day 30. It’s a very volatile business,” said Graham.

That’s why the commission repeatedly encourages farmers to protect

themselves by taking payment on delivery or seeking prompt payment if

they don’t walk out of the office with a cheque in hand.

But Stevenson said farmers who delivered grain to Naber sold it with

the confidence they would be fully covered in the event of the

company’s demise.

He said some of the eligible farmers who lost $800,000 may consider

“testing” the laws governing the grain commission. When asked if that

meant a lawsuit he said:”I wouldn’t say that yet, but I kind of can see

it heading that way, yeah.”

Graham points out that the Canada Grain Act was amended in 1994 to say

that the agency cannot be held liable for any shortfall in security.

This is the first time there has been a shortfall since those

amendments were made.

Graham said it will be a few more weeks before farmers like Stevenson

will see any money from the grain commission because the payouts have

to be reviewed by a bonding company.

Farmers deemed ineligible for delivering a product like canaryseed

won’t be getting a cheque at all.

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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