Archived - Producer payment security

Potential opportunities for improvement

• Increased predictability – The current program lacks some predictability in that it does not guarantee a defined coverage level. Security instruments are specific to the licensees that provided them and may not offer the amount required in cases of misreporting or rapidly changing liabilities.
• Cost efficiency – At the sectoral level, the risk of payment failure is likely significantly over-insured. As the entire pool of security is not accessible, even low risk licensees must ensure full security coverage for each individual liability.
• Competitiveness – The current program can act as a barrier to entry and thereby restrict competition for producers’ grain and can tie up working capital.
• Administrative burden – The ongoing costs and effort associated with maintaining security coverage, administration and compliance, both for licensees and the Canadian Grain Commission.