Protecting your sales and storage from payment default
The Grain Financial Protection Program safeguards the financial interests of grain producers or owners
If your dealer or storage facility becomes insolvent, you can make a claim for the grain for which you haven’t received payment. Defaults on grain delivery and storage are extremely rare. But in Ontario, if they do happen, you’re covered by the Grain Financial Protection Program (GFPP).
The GFPP is designed to protect producers and owners of canola, grain corn, soybeans, and wheat from default on payment by licenced dealers and elevator operators. The program aims to ensure that producers receive timely payments and that their grain is stored properly.
Coverage is available for up to 95 per cent for eligible losses related to non-payment or storage defaults. If your dealer becomes insolvent, you can make a claim for the grain for which you haven’t received payment.
Crosby Devitt, CEO of Grain Farmers of Ontario, says the GFPP is a unique program for serving Ontario producers’ interests.
“Over the past 40 years, the grain industry has grown significantly, and we’ve seen many changes in customers of Ontario grain,” he says. “The GFPP is an important way for farmers to be protected from extremely rare but potentially significant losses that are out of their control.”
Claims are covered by check off fees. Dealers collect the check off fees from farmers, submit it to Grain Farmers of Ontario and Ontario Canola Growers. These commodity groups forward it to the Grain Financial Protection Board to be held in the fund.
The current balance in the fund is almost $20 million.
The GFFP was introduced in 1985 following a series of grain elevator bankruptcies. That year, 92 claims were paid, totalling just over $1 million.
In most years, no claims are submitted. Since 2017, only one claim has been paid out, for $29,132.89. For nearly 10 years, the GFFP program has been administered by Agricorp. Procedures for submitting a claim are available from Agricorp, here [link].
Paul Fenlon, director under the Protecting Farmers from Non-Payment Act, urges producers to make sure they’re working with licensed dealers and elevator operators before they sell or store their grain.
“You can check the list anytime at Agricorp.com,” he says, “and if a licensed dealer or elevator operator doesn’t meet their payment or storage obligations, call us right away at 1-888-247-4999 so we can help protect you.” •
