There’ll be a dark cloud hanging over Lee Egland’s farm as he harvests this year’s crop.
The Eastend, Sask., farmer recently received a cheque for about $4,600 from the Canadian Grain Commission in Winnipeg.
Cheques in Egland’s mailbox are normally a welcome sight. But not this time.
The CGC cheque — issued through the grain commission’s payment protection program — is the only compensation he will receive for a 2015 grain sale that should have grossed nearly $60,000.
“It’s just like a kick in the teeth,” said Egland, who has a problem with Naber Specialty Grains Limited (NSGL) and with the grain commission.
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“Is that not their (the grain commission’s) job?
“They’re supposed to be providing security for farmers, aren’t they?
“I think they should be doing a bit of diligence to ensure … that everything’s above board.”
The grain commission’s payment protection plan is intended to protect farmers against financial losses in cases where grain is sold to an insolvent company.
The CGC is responsible for issuing licences to grain companies.
As part of the process, grain companies are required to post bonds or other types of financial security, which are held in trust.
If the grain company goes belly up, the CGC uses the security to settle the company’s outstanding accounts with farmers.
But in the case of Naber, the program failed to live up to expectations.
Last week, the commission issued a news release confirming that farmers with eligible claims against NSGL would receive 14 cents on every dollar owed.
The grain commission has acknowledged that the value of security posted by NSGL was lower than it should have been.
Commission officials said there is evidence to suggest that the company provided inaccurate information about the value of grain inventories and producer liabilities in the months leading up to NSGL’s bankruptcy.
Unless accurate information is provided by the licensee, the CGC has no way of knowing how big a company’s security bond should be.
Remi Gosselin, manager of corporate information services with the CGC, said the NSGL case has been turned over to RCMP to determine if criminal charges will be laid.
“We referred this item to the RCMP because of the magnitude of Naber Specialty Grain’s outstanding liabilities to producers at the time of receivership and also as a result of the extent to which those liabilities may have been understated in reports to the grain commission,” Gosselin said.
Commission officials also said a number of other issues prompted CGC to contact police. Those issues included:
- delays in NSGL providing documentation to producers when restructuring efforts got underway;
- irregularities observed by the court-appointed receiver;
- failure by NSGL to stop taking grain deliveries after it was ordered to do so by the commission.
Producers like Egland are tallying their losses and questioning whether the CGC’s payment protection program should also be held to account.
According to the grain commission, total eligible farm claims against NSGL were in the range of $1.05 million. That does not include farmer claims that were rejected by the commission because they did not fall within specific timelines established in the protection program.
Security posted by NSGL was valued at $150,000.
“I’m pissed with the grain commission,” said Egland, whose father also lost more than $20,000 in a separate sale to NSGL. “We keep hearing … (NSGL) didn’t provide the proper paperwork but don’t they (the CGC) have auditors?”
CGC officials said primary producers should always take steps to limit their risk when delivering grain to a licensed grain company.
The CGC’s payment protection plan is designed to reduce farmer risk but it is not a guarantee, they added.
Details on the CGC’s payment protection plan can be viewed online at bit.ly/2c196Jw along with five steps that producers can take to reduce risk.
