The practice of deferring payment on delivered grain will be permanently allowed in Ontario starting July 1.
The province, which in December 2010 set up conditions to allow such deferrals only until July this year, will update regulations under its Grains Act and Farm Products Payments Act to permanently allow the practice and allow deferrals of any duration.
Starting July 1, a grain dealer will have to provide a producer requesting a deferred payment with written confirmation of the date on which the deferred payment arrangement was entered into; the date or dates on which payment is to be made; the amount of each payment; and the total amount of all payments.
Also starting July 1, all deferred payments under 180 days will be eligible for declining coverage under the insurance provisions of the province's Grain Financial Protection Program.
For example, a farmer who doesn't defer payment would get 100 per cent compensation from the program, while a farmer who defers for up to 45 days would get 50 per cent coverage.
Deferrals would be allowed for periods of 180 days or more, but no Grain Financial Protection compensation would be available in those cases.
The new regulations will also give Ontario elevators and grain dealers more time to pay for grain sold out of storage. Where they previously had until 2 p.m. the next trading day, they now have until 2 p.m. on the fifth trading day after a sale.
Producers on basis contracts will also be eligible for a lower minimum initial payment of 60 per cent, down from the current 75 per cent, a move meant to allow dealers to "better manage risks and volatility in the current marketplace."
"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," Grain Farmers of Ontario chairman Henry Van Ankum said in a release Thursday. "The government should be commended for how quickly we have resolved this issue."