The Canadian Grain Commission has decided to kibosh a grower-funded insurance plan for the specialty crops industry.
Architects of the plan say the decision could lead to the closure of up to 125 small processors on the Prairies.
The security that is now required by the grain commission “is too onerous” for the small players, said Lloyd Affleck, an official with the Western Marketers and Processors Association.
“Without carrying a bond, small processors or dealers are not to be buying from producers. So what it could (mean) is closure of these businesses.”
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Affleck was pushing for a plan that would insure producers against nonpayment for special crops deliveries. It would have been funded by a mandatory levy of 38 cents per $100 of product delivered.
Parliament authorized the creation of such a plan last year with the passage of Bill C-26. All that remained was for cabinet to review and approve the proposed regulations, which were to take effect Aug. 1, 2000.
There was a 30-day public comment period, but officials at the grain commission decided to mail the draft legislation and a discussion paper to 3,000 individuals involved in the special crops industry.
The returned comments indicated less support for the program than what was needed, said commission spokesperson Paul Graham.
The federal agency then hired Angus Reid Group Inc. to survey producers. The pollster conducted a telephone survey of 301 growers and determined that only 54 percent were likely to participate.
Although producers would have been automatically enrolled in the plan, they also would have been allowed to opt out. The survey showed participation levels would have been adequate in the first year, but insufficient after that.
“The economic times have changed,” said Graham.
“Growers may well have been willing to support a program like this four or five years ago, but in today’s economic reality there was some objection to paying a levy.”
Affleck disputes the survey results. He said the insurance plan was developed with and had the support of pulse grower groups.
“We were told that it would never fly because it wouldn’t be accepted by the farmers. I’m not so sure that that was the case,” said Affleck.
Graham said the commission will meet with industry representatives to develop alternatives. In the meantime the old rules apply.
But Affleck sees it as a giant step backward because it forces smaller processors to operate outside CGC rules.
