Farmers of North America and two partners are offering a new credit insurance product.
The product, called MarketPower Assurance, will offer protection for non-payment by a customer for grain once it has been delivered. It is being offered by FNA, Atradius Credit Insurance NV, and Pangaea Global Risk Management, and is similar to insurance used by large grain companies, the companies said in a press release.
“Individual farmers have not had the ability to get credit insurance because the industry was not interested in issuing thousands of individual insurance policies to farmers across Canada,” said Doug Roff, national sales director for Atradius. “This new program will provide this ability.”
Farmers who buy the insurance will have access to a pre-screened buyer pool and will also be able to borrow against secured payment. Banks will lend up to 90 per cent of the value of receivables when they are insured, often at lower rates than farmers typically pay, according to FNA.
“With the uncertainty in the grains industry right now, this is going to help reduce one more concern, and help farmers feel more confident selling to a new buyer, selling to a buyer they are unsure of, and leveraging their grain while it is still in the bin,” said Bob Friesen, CEO of FNA.