Joined: 02 Mar 2009
|Posted: Fri Feb 02, 2018 9:19 am Post subject: Liberals break promise to provide produce insurance
|( another promise from 2015 that was just made to get votes and didn't really mean anything )
Liberals break promise to provide produce insurance
By Kelsey Johnson. Published on Feb 2, 2018 5:00am
Minister of Agriculture and Agri-Food Lawrence MacAulay underwire from fruit and vegetable growers. iPolitics/Matthew Usherwood
The Liberal government says it will not develop a long-demanded payment protection system for Canadian produce growers.
That’s despite it being a key plank in its 2015 federal election platform and growing frustration from this country’s fruit and vegetable growers.
The growers have been asking for a payment protection regime similar to the Perishable Agricultural Commodities Act (PACA) in the United States since 1985. If created, the system would give producers selling produce to Canadian buyers a way to recoup outstanding payments.
“The insolvency frequency of the fresh produce industry does not warrant the right to such an extraordinary remedy, which could have a significant effect on credit cost and availability and shift losses to other creditors,” Innovation Minister Navdeep Bains and Agriculture Minister Lawrence MacAulay said in a joint letter Jan. 8.
The five-page letter was addressed to Pat Finnigan, chair of the House agriculture committee.
The government’s response has angered produce growers who said in their own letter to Finnigan that the ministers’ missive was rife with “misconceptions” and showed a “lack of understanding of the efforts” the industry has taken to resolve the issue.
Current provisions aimed at addressing domestic outstanding payments “do not work,” the Fresh Produce Alliance (FPA) said, noting members were “deeply disappointed” by the government’s response.
The Alliance includes the Canadian Horticulture Council, the Canadian Produce Marketing Association and the Fruit and Vegetable Dispute Resolution Corporation.
Under PACA, a $100 fee allows American produce growers to start a process to recover outstanding payments from buyers. Canadian produce farmers used to have preferential treatment – which made PACA available to Canadian growers.
The United States revoked that preferential status in 2014 because similar protection was not being offered to American growers exporting to Canada. That action means any Canadian grower looking to recoup outstanding payments from American buyers must put up a bond of twice their claim before they can proceed. It’s a bond many farmers can’t afford.
For example, a producer trying to recoup $80,000 in outstanding payments from an American buyer would now be required to post a $U.S160,000 bond to try and recover the payment owed.
New regulations included under the proposed Safe Foods for Canadian Act are “expected to address the vast majority of payment issues faced by fresh produce sellers from solvent buyers,” Bains and MacAulay insisted in their letter.
“Once implemented, it should provide comparable outcomes to those in the U.S. in terms of non-payment from solvent buyers,” they said.
Canada’s produce industry disputes that.
The FPA said the U.S. Department of Agriculture “has stated on numerous occasions that comparability cannot be achieved in the absence of an insolvency tool.”
Mark Eyking, a former Liberal agriculture critic and produce farmer from Nova Scotia, promised the Liberals would restore Canadian access during the 2015 election.
“When farmers work hard to grow products, process them and send them to a customer, they expect to be paid. Liberals will support our producers and grow the sector by restoring access to PACA,” he said in an Oct. 7 news release that accused the Conservatives of ignoring produce growers.
Meanwhile, the House standing committee studied the PACA issue in 2016 – which led the committee to write both MacAulay and Bains to urge them to address the issue.
“The Conference Board of Canada has estimated that the annual losses to GDP as a result of the PACA rule could go as high as $38.4 million, along with the permanent loss of 464 jobs and $17.7 million in labour income,” the committee warned in its initial letter in June 2016.
“The lack of adequate protection in Canada is also problematic,” Finnigan wrote, telling the ministers the losses felt by the produce industry averaged between $18 million and $25 million per year.
The correspondence from the committee went unanswered for more than a year, despite Finnigan sending two follow-up letters.
MacAulay and Bains disagree with those figures, telling MPs the number of outstanding PACA claims is equivalent to 0.06 per cent of Canadian produce exports – or $1.6 million – to the United States.
In 2016, Canadian horticultural trade to the United States was valued at $2.7 billion.
NDP Trade Critic Tracey Ramsey has been pushing for Ottawa to resolve the PACA issue since 2016. The Ontario MP, whose riding is home to a number of greenhouse growers, tabled a motion in the House of Commons in March 2016 calling on the Liberals to act.
Ramsey has also authored a private members bill aimed at resolving the PACA problem. At this point, the legislation is unlikely to make its way through the House before the next federal election in 2019.
“It’s just been bundled and botched a million times over,” she told iPolitics when asked about the Liberals’ handling of the file. “It’s clear that this is not a priority for the government, even though it was included in their election platform and it’s something that’s still included on some Liberals websites.”
“We all know that once it has shipped, the damage is done. If you’re a bad participant in that, you’re not going to know it until after the product’s gone there and you’ve lost it,” Ramsey added.
“This is something that is being widely called for, would really support farmers – which this government claims to be behind. And yet, again, we see them ignoring evidence and pushing forward with something that is not rooted in facts.”
In December 2017, the House finance committee recommended the Liberals address the produce payment protection issue in their recent pre-budget report for the upcoming 2018 budget.
Canada’s agriculture industry has been challenged by the Trudeau government to grow their exports to $75 billion by 2025.