Some Canadian Exotic Grains customers compensated

CNS Canada — A few producers who did not receive payment from Canadian Exotic Grains Ltd. have been compensated through the Canadian Grain Commission’s Safeguards for Grain Farmers Program, the commission said Tuesday.

Canadian Exotic Grain’s grain dealer license was revoked April 26 after the company was unable to pay producers. On June 4, Saskatchewan Pulse Growers posted on its website that it had been told by the CGC that Canadian Exotic Grains was no longer licensed.

A notice on the Deloitte Canada website stated that as of July 17, Canadian Exotic Grains had filed a notice of creditors of intention under the Bankruptcy and Insolvency Act.

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The Eston, Sask.-based specialty crops company, at a court hearing Aug. 8 in Saskatoon, was granted until Sept. 28 to file a proposal, amongst other relief.

The company, incorporated by area farmer Gary Schweitzer in 2009, grew and also marketed crops such as lentils, chickpeas and coriander. Schweitzer later retired, stepped out of the company’s day-to-day operations in 2014 and moved to Medicine Hat.

According to CEG’s application documents filed with Court of Queen’s Bench, the company’s revenues had “significantly declined” in recent years for reasons including poor crop years in 2016 and 2017, “uncollected receivables” and the inability to secure operating financing.

The uncollected receivables, CEG said, followed the 2013 bankruptcy of Quebec food processing firm CLIC International, whose assets were later bought by Saskatchewan pulse processor AGT.

CEG said a “key” employee and shareholder also quit around that time, which led the company to sell its landholdings and focus solely on grain marketing.

The CGC said Tuesday it investigated a number of non-payment claims against CEG, determining finding four producer claims eligible for compensation. Those producers were fully covered under the security CEG posted under the terms of its license.

Licensed companies have to provide a security to CGC to cover amounts owed to producers for grain deliveries; if a company is unable to pay for grain that has been delivered, the security is used to compensate producers.

A number of claims against CEG were deemed ineligible, however, because they were not submitted on time, the commission said.

To be eligible for compensation, producers had to submit their claims within 90 days of delivery or within 30 days from the date the cash purchase ticket or cheque were issued, whichever is less.

CEG’s secured creditors include Farm Credit Canada and the financing arm of equipment firm Agco. Other listed creditors with claims over $250 include a relatively small number of farmers. –– CNS Canada, with files from GFM Network staff

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