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Apr 1

Time running out on licensing input

Posted on Apr 1 By: Lee Hart

The Canadian livestock feed industry has only a few days left to provide input into a proposal by the Canadian Grain Commission (CGC) to develop a licensing system for feed mills. Deadline is April 9.

Jim Smolik, CGC assistant chief commissioner, explained that the licensing proposal largely stems from the business failures in 2012 of two large hog producing operations in Manitoba and Saskatchewan. One company in receivership and the other under creditor protection left farmers on the hook for millions of dollars in unpaid feed grains delivered to the plants.

While Canadian grain companies are licensed and are backed by an insurance program that protects farmers in the event of a business failure, feed mills are not. Implementing a licensing system for feed mills would protect farmers from being short-changed if they deliver feed grains to a particular processor and don’t get paid.

“Listening to the industry, the federal agriculture minister asked the Canadian Grain Commission to develop a proposal for licensing feed mill operations, similar to what applies to grain companies,” said Smolik.

A key element of the licensing would be to require each feed mill to post a form of security sufficient enough to cover any unpaid inventory. As it stands, federal ag minister Gerry Ritz wants the licensing system developed. What’s still open for discussion are the details of the structure and application of the system.

Smolik said the proposal isn’t likely to apply to the smaller operators, ‘the mom and pop’ size feed mill, but more to the larger commercial feed mill operations. But the term “feed mill” cuts a wide swath. The CGC is hoping the stakeholder consultation will give a good indication of the size of operation that should be licensed.

Kelly Chambers, manager of the Feed Coalition based in Calgary explained that Coalition members are concerned about the size of operation that would require a licence.

The Coalition, initiated by Alberta Barley, Alberta Cattle Feeders’ Association, Alberta Pork, and Alberta Wheat Commission represents the crop and livestock sectors of the feed industry.

Chambers went on to explain that it’s significant for all sectors to make their views known before the deadline.

“It’s important to strike a balance between the insurance benefits and the additional costs to feed mill operators and producers,” said Chambers. “To have that balance the system needs input from the entire feed industry.”

Meanwhile the Animal Nutrition Association of Canada (ANAC) headquartered in Ottawa, said while the organization is finalizing its response, in general terms ANAC opposes the licensing proposal. Its specific point is whether requiring the whole industry to be licensed is an over-reaction to two specific problems.

All sectors of the feed industry are urged to review the full discussion paper on licensing feed mills available at the CGC website at: https://www.grainscanada.gc.ca.

Deadline for submissions is midnight April 9, 2015.

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