What you need from the bonding system is a level playing field for the industry. Right now, I'm sure there are still people in the industry who are unbonded and operating outside the law, as we did for a number of years. There are people who are bonded, like the larger grain companies. I have no idea if the larger grain companies need to have the maximum extent of their grain in a bond. At one time, they did not. That's a question your committee would have to look at. So for the industry players, under the current system, the level playing field is not there.
The recommendations made in August, including the changes that allow us to apply to EDC to be bonded, have improved our ability. It ties up less capital, though it is an onerous process. We report monthly. Within our reporting timeframe, we are expected to be within the levels of our bond. This inhibits our ability to expand our business during peak periods. If we can't come up with more money for the bond, we are limited to it. I know the bonding this year will limit my trade.
I question whether a risk management system for farmers that inhibits business is something you would like to see as Canadian policy. The current bond requirement is fairly onerous. It's very simple to do $7 million worth of business. It's a low margin but a high-volume business.
You want something effective: a level playing field that is efficient and simple to administer and that isn't subject to a regular audit. There's reference in this report to making the CGC accountable and liable to be sued. I would challenge that, because it would be very difficult, unless you're living in that office every day, to know exactly when somebody is over or under their bond.
So I think it's an impossible task you're giving the CGC, and any policy that requires the impossible is not good. We have been part of a committee that was a proponent for many years of the Ontario Corn Growers' Association model. It exists. This is one of the differences between western and eastern agriculture.
The Ontario Corn Growers' model is a system of insurance. You deliver to me, I fill out a form, and I buy temporary insurance until you're paid for. It's been a while since I've reviewed this model. Unfortunately, we had to give up on it because of the current round of CGC that enforced the mandatory requirements we're under now, which I disagree with.
So the Ontario Corn Growers' model is temporary insurance. There was a fee that was charged and it was accumulated. As I understand it, the money held has now gotten so large that the fees have gone down. Keep it simple: KISS. Also, it's bankable. When the farmer delivers, he knows he's going to get whatever was decided: 70%, 80%, 90%, 60%, 50%. When he delivers, he knows what the percentage is.
That's a problem. The report says that the Canadian Grain Commission, in their advertising, went to great lengths to deal with licensed and bonded people. I told I don't know how many grain commissioners that the system just didn't work. So when Naber Seed happened, it wasn't anything new to anybody in the industry. Everyone knew it was possible.
Needless to say, it's not bankable to the farmers, and the CGC cannot police it. So basically I'm in favour of the Ontario Corn Growers' model or something else. Another possibility: there is ''buyer beware'', but I would support risk management that's simple and effective.
The other beauty of this is that it could be extended to other commodities. There are many organic grains not covered, feed grains. It's simple.
So with regard to the part of the report that recommends taking time to find a better system, that's where I would go.