September 26, 2016 by Canadian Underwriter
The federal government is investing more than $400,000 to support the Canadian Federation of Agriculture’s (CFA) efforts to introduce a new accounts receivable insurance tool for farmers.
CFA’s two-year pilot project addresses a gap in the agriculture sector for individual transaction accounts receivable insurance, notes a statement Friday from Agriculture and Agri-Food Canada.
Accounts receivable insurance protects a business from an unforeseeable non-payment of commercial debt.
The tool is meant to offer financial protection to farmers as they seek out new markets within Canada and abroad, the federal department reports in the statement.
“The intent is to develop private sector delivered, accounts receivable insurance for up to 20 agricultural commodities in Saskatchewan and Manitoba, with longer-term plans of expanding credit insurance across Canada to provide more certainty and ensure higher profitability,” the federal department reports.
Member of Parliament T.J. Harvey made the funding announcement, on behalf of federal agriculture and agri-food minister Lawrence MacAulay, Friday in New Brunswick.
“This investment will help give farmers the confidence of guaranteed payment, which encourages them to take advantage of new sales opportunities to gain higher returns for their commodities and increase their profitability,” Harvey says in the statement.
The CFA “is pleased to undertake this project to develop tools that will improve the understanding of potential risks in agriculture and support the development of insurance protection for farmers in cases where a buyer doesn’t pay their bill,” CFA president Ron Bonnett adds in the statement.
The project has been funded under the Growing Forward 2, AgriRisk Initiatives.
Serving as the foundation for government agricultural programs and services, Growing Forward 2 is a five-year (2013 to 2018) policy framework for Canada’s agricultural and agri-food sector, representing a $3 billion dollar investment by federal, provincial and territorial governments.