Changes to financial protection program

As a result of higher cattle prices, the Beef Farmers of Ontario membership expressed concerns about the compensation fund of the Beef Cattle Financial Protection Program and its ability to protect farmers in a default payment situation.
The purpose of the program, established in 1984, is to reduce the risk of producer loss in the event that a licensed buyer defaults on payment.
The mandatory fee—currently five cents per head—ensures that the fund established under the program has money to pay any valid claim(s) against it.
The current fund balance is $7.36 million.
The Livestock Financial Protection Board is responsible for adjudicating the validity of any claim(s) and determining how much a claimant is eligible to receive.
If deemed valid, the board will pay the claim to the claimant.
The board also is responsible for trying to recover any payments it makes to a claimant from the defaulting buyer.
To address the compensation fund concerns, BFO recommended that a study be commissioned by the Financial Protection Board.
An actuarial review of the fund was completed in September, which projected a gradual depletion of the fund over the next five years unless the fees are increased.
At the request of the Livestock Financial Protection Board, the Ontario Ministry of Agriculture, Food and Rural Affairs is proposing amendments to the regulation that sets out the fees payable to the Livestock Financial Protection Board—raising the fee from five cents per head to 10 cents per head.
BFO, the Ontario Livestock Auction Markets Association, and the Ontario Livestock Dealers Association are supportive of the increase.
The fee was 20 cents per head at inception and reduced to 10 cents per head on June 1, 1984.
The fee has been set at five cents per head since April 4, 1989.
Upcoming events
•Jan. 21–Rainy River Cattlemen’s Association annual general meeting, 7 p.m., Our Lady of the Way School, Stratton.