Proposed Changes to Producer Payment Protection

WINNIPEG, Oct. 7, 2013 /CNW/ - On October 5, 2013, changes to the Canadian Grain Commission's producer payment protection model and regulations were published in the Canada Gazette, Part I and are available online at www.gazette.gc.ca.

All stakeholders, including licensees, farmers, farm groups and industry associations, are invited to submit their feedback on the amended regulations until November 4, 2013.

These changes are a result of amendments made to the Canada Grain Act as part of the Jobs and Growth Act, 2012. They propose to implement an insurance-based security model for producer payment protection. This model is expected to reduce the overall cost of producer payment protection coverage to the grain industry.

The objectives of the proposed regulations are to:

  • Reduce costs to the grain industry and the Canadian Grain Commission;
  • Reduce administrative burden to licensees and the Canadian Grain Commission;
  • Establish that an eligible holder of an authorized document must be a producer. This removes a requirement with respect to terminal elevators to tender security, which is not applicable to them because terminal elevator operations do not incur producer liabilities;
  • Apply consistent periods for payment and delivery obligations for all authorized document holders;
  • Encourage producers to take steps to minimize the risk of not being paid by adding a 5% deductible and reforming their eligibility period to 45 days from the date of delivery; and
  • Create a more predictable and transparent producer payment protection model.

Under the proposed new model, producers would continue to be protected against non-payment for their eligible grain deliveries. Coverage will continue under the current individual security-based payment protection model until the new proposed model takes effect.

About the Canadian Grain Commission

The Canadian Grain Commission is the federal agency responsible for establishing and maintaining Canada's grain quality standards. Its programs result in shipments of grain that consistently meet specifications for quality, safety and quantity. The Canadian Grain Commission regulates the grain industry to protect producers' rights and ensure the integrity of grain transactions.

SOURCE Canadian Grain Commission



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