Farmers are turning to a new credit insurance program that provides payment protection on their sales.
Vern Randall of Cherry AgSecure in Saskatoon said the MarketPower Assurance program has proved popular with farmers across Canada.
“If it grows or grazes, it’s covered,” Randall said at Canada’s Farm Progress Show, where the company had a display.
“We’ve insured potatoes in P.E.I. to fresh fruit in B.C.”
He said insurance companies historically weren’t that interested in providing this type of coverage, and farmers who used the Canadian Wheat Board didn’t need payment insurance.
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“Now with the deregulation of the wheat board and the increase in farmer marketing, and even farmer direct exports, the need for this has arisen,” Randall said.
“We protect the farmer from non-payment or even slow payment commodities shipped to Canada or worldwide.”
MarketPower is a flexible credit insurance product that allows farmers to insure transactions.
Randall said pulses and lentils heading to India or Turkey are often insured. For example, a farmer shipping lentils from Sask-atchewan to India can insure the ocean cargo exposure and the financial risk of direct exporting.
Domestically, companies bonded through the Canadian Grain Commission sometimes don’t have bonds large enough when things go wrong, and there is also a time limit.
“This program isn’t designed to complement or stand with a bond,” he said.
MarketPower has been available for a couple of years but was recently revamped. Euler Hermes, the largest private carrier of trade credit insurance in Canada, backs it, and Cherry AgSecure, which focuses on farm insurance, is the exclusive broker.
Randall said participation has been strong and the response at the show indicated farmers are interested.
“We were surprised at how many farmers have actually encountered a situation where either, a, they’ve been burned on a transaction, or, b, they’ve been worried but it did actually work out in the end but it took a lot of fighting,” he said.
