Newco Front...Just because it's quiet doesn't mean that producers means other parties are deciding f

[TOM4CWB]

LarryW.

A 'Primary Elevator' is REQUIRED to buy using CGC grades and proceedures. They also must have approved facilities that meet standards for safe storage and handle of these grain products. A primary elevator as specified in the Canada Grain Act can use inventory as assets to the amount specified by the CGC. Grain Dealers Can't... BECAUSE of the very reasons you relate to. Feed Mills are NOT Primary Elevators... NOR are trucks... or farmers/feed lots bins that receive growers grain. These facilities are not generally 'Works for the General Advantage of Canada' which must grade and handle according to CGC Regulation.

IF you do NOT see a 'Primary Elevator License' and proper graded grain receipts Using Canada Grain Act grade names... there is NO security. Never was the intent of the present system... nor any future system.

Just like CIDC does not insure loans that are private; but coverage only comes though approved banks. Same in the Credit Union Financial Assurance systems.

Domestic sales of grain to domestic consumers... have NOT been covered by CGC bonding/security... for generations.

[oneoff]

"Domestic sales of grain to domestic consumers... have NOT been covered by CGC bonding/security... for generations"

If I interpret this analysis; it is being said that firms such as the way Newco was operating till last May; could not be bonded.

That is obviously not true; as the proof is that it cost a bonding company a couple million of their own money; and the CGC was mistakenly assuming that this company was fully compliant with bonding requirements for grain puchases from many more than 120 producers.

Someone is misinformed about the current bonding process. And it may very well be myself. Please enlighten persons such as myself. Thanks

[oneoff]

The Chief Commissioner of the CGC is quoted as saying “While we license primary, process, terminal and transfer elevators and grain dealers, we do not license companies such as feed lots. Deliveries made to unlicensed companies are not covered by our Payment Protection Program.”

Seems to me that "grain dealers" involves a much bigger class than "licenced primary elevators". And I think we all have an idea of the scopeof a feedlot or market hog enterprise would cover.

Similarly; any grain purchasing business (any kind whatsoever) or its customers; which is not licenced by the CGC; nor putting up its bond requirement is understandably not going to be able to expect to be covered in any way by CGC bonding.

Maybe just tell us what you think is included in the "feedlot" class that Hermansen refers to.

[TOM4CWB]

Oneoff,

The coverage times mentioned below and correct official CGC sales papers provide the basis for the CGC Security. Brokers often match a feed grain grower with a feed buyer... which then mean there is NO security if the buyer isn't CGC Licensed.

http://www.grainscanada.gc.ca/licensee-licence/licensed-agreees-eng.htm#w

This Shows who is covered. I see NO domestic feed lots or mills with CGC Security.

"Canadian Grain Commission concludes Payment Protection Program review for Newco Grain Ltd.

WINNIPEG, Nov. 23, 2012 /CNW/ - Producers who did not receive payment for grain sold to Newco Grain Ltd. have received compensation for their eligible claims through the Canadian Grain Commission's Payment Protection Program.

Newco Grain Ltd. was a licensed grain dealer located in Coaldale, Alberta, until May 11, 2012.

"When a licensed company is unable to pay producers, we work to ensure producers receive compensation," said Elwin Hermanson, Chief Commissioner of the Canadian Grain Commission. "While we license primary, process, terminal and transfer elevators and grain dealers, we do not license companies such as feed lots. Deliveries made to unlicensed companies are not covered by our Payment Protection Program."

Rules for compensation

The Canadian Grain Commission reminds producers that they must follow and meet certain rules for compensation under the Payment Protection Program. Producers are only covered by a licensed company's security for 90 days from the date they delivered their grain, or 30 days from the date they received a cash purchase ticket.

Compensation of 100% can not be guaranteed, and in the case of Newco Grain Ltd., eligible producers only received 95% of the amount they were owed.

About the Canadian Grain Commission

The Canadian Grain Commission is the federal agency responsible for establishing and maintaining Canada's grain quality standards. Its programs result in shipments of grain that consistently meet specifications for quality, safety and quantity. The Canadian Grain Commission regulates the grain industry to protect producers' rights and ensure the integrity of grain transactions.

Related information
• Licensed companies
• Financial protection for grain deliveries

SOURCE: Canadian Grain Commission


http://www.newswire.ca/en/story/1077299/canadian-grain-commission-concludes-payment-protection-program-review-for-newco-grain-ltd

[oneoff]

Still trying to condense this down to a laymen`s language and two sentences.

Is it agreed that:

Whoever cuts the cheques for CGC described and graded grains are the one`s can who become bonded (for producer repayment purposes in the case of payment defaults. And further feedmills and (registered) seed growers are specifically exempted from the Act from those provisions. And that licencing and bonding could considered two seperate transactions.



Continuing the arguments further:

We are talking about CGC grades (eg. Canada No.1 Feed) and not feed grain. If your production is described as feed grain; is it not outside CGC juridiction; which would be an important distinction.

And as for brokers; we must be cognisant of the principles of ``estoppel`` which is defined by Wiki as

Estoppel in its broadest sense is a legal term referring to a series of legal and equitable[1] doctrines that preclude "a person from denying or asserting anything to the contrary of that which has, in contemplation of law, been established as the truth, either by the acts of judicial or legislative officers, or by his own deed, acts, or representations, either express or implied`.

I could refer everyone to a court proceeding where once a producer ``talks`` to a a broker; that one can not later argue that the broker does not have the full authority to act on your behalf.

Now while a broker may be engaged to shop your grain around; there is the possibly he is buying for their own account as an unlicenced and unbonded business.

Thus is a producers only remedy to stipulate that their grain must be sold to a licenced and bonded company where

AT BEST YOU MIGHT expect a 95 payout after months of wondering; and at worst you could still get pennies on the dollar.

No wonder the industry (and particularly the Federal Government)wants to change systems.

I put to you that the proposed solutions are red herrings designed to distact from the real solution which is to require any businessman to exchange immediate payment for received goods .

Sure in most cases that requires adequate reserves; financing; credit arrangements, secured loans and lines of credit. Now those are preferably handled as their own business arrangements and responsibility. But if those important terms are not looked after within the purchasers business; and deliberately not disclosed; then the producer is being used as the banker; without any consultation.
And thats what producers are up against and that`s what poorly finanaced business`s are avoiding talking about.


I think it could be a case that many grain purchasers would be forced into receivership or bankruptcy if they had to come up with

PROVIDING IMMEDIATE PAYMENT FOR EXCHANGED GOODS

But why would producers be keen to backstop every business without knowing the business details of any one of them. Further,
Is it not patently obvious that todays insurance premium is open ended; and an all sure agreement to pay whatever the insurance companies decides to raise those premiums to in the future.

[oneoff]

Tom... I'm not disputing much of the information you provide; but I do believe comments like


"IF you do NOT see a 'Primary Elevator License' and proper graded grain receipts Using Canada Grain Act grade names... there is NO security. Never was the intent of the present system... nor any future system"

This is indeed missing some key facts when jumping to the conclusion above. There are also grain dealers, transfer elevators and process elevators etc; and then those who conduct business involving various combinations of the above. All may be bonded and licenced and that is the itent of the present system although it might not always be so for very long.

If there is some thing to insure (other than feedlot and seed grain exemptions) or if for whatever reason you wished to be licenced (although even the CGC might wonder why); then I am told that you may apply away.

I you are "cutting the cheque" then you can be apply to be bonded. If there is nothing to bond; then obviously not.
That would apparently include those wearing multiple hats; and especially within the all encompassing CGC definition of a grain dealer which is

Grain dealer
"Grain dealer's licence to carry on business as a grain dealer. Grain dealer means a person, who for reward, on their own behalf or on behalf of another person, deals in or handles western grain"

[wmoebis]

Tom you said:
"A 'Primary Elevator' is REQUIRED to
buy using CGC grades and proceedures."

My question is: Who is enforcing this
REQUIREMENT?
Walk into just about every elevator and
no one is fallowing procedure. Observe
them for a bit!
In many cases it depends on how much
grain you have for sale or how much you
owe the company as to what the price,
grade, protein and dockage will be.

[TOM4CWB]

wmoebis,

With delivering to 'Licensed Primary Elevator";

If there are problems with the proceedure used in grading or dockage assesments... the Canadian Grain Act has a dispute settlement system as you know.

If no one holds licensed operators accountable... then they will get away with it.

ASK to see standard grade samples... px samples are held for calibration purposes to cross check. Moisture is easily cross checked.

I have found in general; most operators work with us; to credit our account the benefit being questioned... if there is a credible issue.

Deliver to multiple elevator operators... this keeps folks honest in our experience.

Cheers.

[wmoebis]

I know we are way off topic here, but I think over all there is way more lost over the years on sample assessment than none payment.

Your right Tom. The CGC requirement is there, but it is left up to producers to make sure it is implemented.

The problem is, there are very few producers who have the knowledge or take the time to make sure that these procedures are followed.

If proper procedures are followed there is only 1 grade, dockage and protein% on each sample. It doesn't matter where that sample is graded Wpg, Provost, Maple Creek or Van. Why is there discrepancies just miles apart between 2 elevators? Especially on objective factors, dockage or protein, subjective factors I can see diff of opinion but there is still only one grade.

[dave4441]

It was a compliment hobby. Very, very few are
thinking as you are.

[oneoff]

Fine... we are all on the same page for licenced primary elevators.

But grain dealers and brokers and "feedlots" don't fall into that category.

What needs to be discussed in a lot more detail are the problems associated with those more locally based sectors; and I detect a whole lot more reluctance to speak out.

Maybe its because of a lot more personal relationship with those owners than with a Mayo or James for example.

But seemingly those relatively smaller operators just don't have really strong financial foundations.

[oneoff]

And another week has come and gone; and no new information for the unsecured creditors.

I suppose there is always next week and next year; small claims court is too far away; nobody knows the legal system well enough and Tony Merchant is too busy with cases that have some extra zero's on the amounts being sought.

[oneoff]

The open letter copied below was addreesed to the creditors of Newco Grain early this evening. It is this type of disclosure that should be given in circumstances where other people's money becomes at risk; because it is where other peoples business becomes the business of hundreds of others; directly and indirectly affected. Hopefully all the parties can both learn and benefit from open dialogue and some understanding. And I again repeat that smugness on the part of anyone in this day and age is also categorized by other more descritive terms that convey the intent more poignantly.


" To the creditors of Newco Grain Ltd. (NGL):

We are writing to you to give you a brief update as to the affairs here at NGL. In the past 6 months we have been in touch with you to the best of our ability by phone, but we cannot maintain that anymore. From now on we will communicate on a regular basis by email.

We at NGL are committed to repayment of our debts and appreciate your patience as we work through the problems that we are facing.

The situations we are in at the moment are as follows:

- One of NGL’s accounts receivable in the amount of approx $672k is 60% collectable by February 28, 2013, according to creditors proposal and the remaining balance scheduled for collection in equal monthly payments for the seven months leading up to September 30, 2013. This is in debt review so it is based on the fact that the client gets refinanced.

- Also for long term account receivable NGL is working to collect approx $367k over 8 years.

- The land that NGL owns has equity in the amount of approx $200k. At the moment we have an expression of interest on it. If this proposal goes forward this money will be distributed pro-rata to creditors.

- We are currently communicating with and in the process of retaining a third party to assist in formulating a formal proposal to deal with all outstanding amounts.

Again, thank-you for your patience and we will keep you updated.


Neil Slingerland

1-800-661-2312
neil@newcograin.com