The Canadian Grain Commission (CGC) tries to ensure grain companies have enough security posted to cover farmers against payment defaults, but sometimes the security falls short.
That’s why the CGC urges farmer to get paid right away.
Farmers can make a claim against a company’s security if they are not paid within 90 days from the date of delivery. Beyond 90 days they’re not covered.
Farmers who receive a cash purchase ticket or cheque are covered for 30 days, or until 90 days from the date of grain delivery, the lesser of the two time periods.
When a company refuses to pay, or the cheque bounces, farmers have 30 days to notify the CGC in writing.
Between 2002 and 2008 farmers received 77 per cent of their money after buyers failed to pay them. Out of nine cases farmers were 100 per cent compensated in six and in one they received 99.8 per cent of what they were owed.
In two cases farmers were not fully covered, receiving just 28 and 51 cents on the dollar.
Since 1982, 20 CGC licensees failed. Payments of $9.3 million were made with the security held by the CGC. The CGC was ordered by the federal government to pay farmers another $3.1 million, bringing total payouts of $12.4 million to an estimated 700 to 1,000 farmers.