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Deferred payments now permanently allowed under the grains act

GUELPH, ON (May 17, 2012) – Discussions between the provincial government, grain handlers and Ontario’s farmers have concluded and deferred payments will now be permanently allowed under the Grains Act beginning July 1, 2012.

Grain Farmers of Ontario and the Ontario Agri Business Association have been working with the Ontario Ministry of Agriculture, Food and Rural Affairs and Agricorp for more than a year and a half to resolve the issue of deferring payments on grain.  As a result, two regulations related to deferred payments, basis contracts and payments for grain sold out of storage have been updated, approved by the provincial legislative committee and filed with the Registrar of Regulations in Ontario.

“This has been a rewarding process to go through.  A problem was identified by farmers and the grain handling industry and we all pulled together including representatives from government to find a long term solution that will benefit everyone,” says Henry Van Ankum, Chair of Grain Farmers of Ontario.  “The government should be commended for how quickly we have resolved this issue.”

The specific changes to take place on July 1, 2012 are:

  1. Deferred Payments will be allowed permanently in the Grains Act 
  2. All deferred payments under 180 days are eligible for declining coverage under the insurance provisions of the Grain Financial Protection Program.  The dealer will simply be required to provide the producer requesting the deferred payment with written confirmation of: a) The date on which the deferred payment arrangement was entered into; b) The date or dates on which payment is to be made; c) The amount of each payment and the total amount of all payments.
  3. The initial payment for Basis Contracts has changed from 75% to 60%
  4. Elevators/dealers will have five (5) trading days to pay for Grain Sold Out of Storage which has changed the terms of payment from 2:00 p.m. the next trading day to 2:00 p.m. on the fifth trading day

Deferred payments have become a significant item in the marketing tool box and are used by an increasing number of farmers across Ontario.  For more information on the changes to the Grains Act, refer to the published regulations in The Ontario Gazette from May 19, 2012 or view the amending O.Reg. 260/97 (general) under the Grains Act at http://bit.ly/Kw5Bs4 and the new regulation O.Reg. 70/12 (payments from funds for grain producers) made under the Farm Products Payments Act at http://bit.ly/L3253P.  

Grain Farmers of Ontario

Grain Farmers of Ontario is the province’s largest commodity organization, representing Ontario’s 28,000 corn, soybean and wheat farmers. The crops they grow cover 6 million acres of farm land across the province, generate over $2.5 billion in farm gate receipts, result in over $9 billion in economic output and are responsible for over 40,000 jobs in the province.

Contact:

Barry Senft, CEO - 1-800-265-0550; bsenft@gfo.ca

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Corn CBOT March 3.65 ↑ 01 cents
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Cash Grain prices as of the close, February 21, are as follows: SWW @ $205.96 ($5.61/bu), HRW @ $203.63/MT ($5.54/bu), HRS @ $231.13/MT ($6.29/bu), SRW @ $201.30/MT ($5.48/bu).

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