By working together as a business alliance, farmers will now have access to a unique credit insurance program that will provide security when selling their products, and cash flow opportunities to farmers that they did not have before.
“MarketPower Assurance” was jointly created by Farmers of North America (FNA), Atradius Credit Insurance NV, and Pangaea Global Risk Management, and this program is a new unique and exciting option available to Canadian farmers that previously was only available to large grain companies.
The program has two key features: one is protection against non-payment; and the second is the ability to borrow against that secured payable while the grain is still in the bin.
The program is not just for wheat, but for any grain, and eventually all farm production. The program will be available exclusively through FNA, and is part of FNA’s ongoing commitment to increasing value for farmers.
As the world of marketing changes for grain farmers in Western Canada, there will be new opportunities for farmers to sell their grain to wider range of buyers. But with those new and unfamiliar buyers, there comes risk of not being paid. With the Market Power Assurance program, farmers are protected against non-payment by a customer for grain once it has been delivered. Not only that, but program participants will have access to a pre-screened buyer pool.
“Individual farmers have not had the ability to get credit insurance because the industry was not interested in issuing thousands of individual insurance policies to farmers across Canada”, says Doug Roff, National Sales Director for Atradius. “This new program will provide this ability”.
While the program provides security of payment, it also has the benefit of giving farmers the ability to borrow against that now-secured payment. This gives farmers a range of new borrowing options. Banks will lend up to 90% of the value of receivables when they are insured, often at lower rates than farmers typically pay.
Bob Friesen, CEO of FNA-STAG, says the program will have a huge impact for farmers as they start using it. “With the uncertainty in the grains industry right now, this is going to help reduce one more concern, and help farmers feel more confident selling to a new buyer, selling to a buyer they are unsure of, and leveraging their
grain while it is still in the bin.”
The program will also make it more attractive for buyers to work with participating farmers. The program eliminates the need for buyers to use expensive forms of security like bonding and letters of credit. This will freeup the buyer’s working capital and may make participating farmers more attractive to work with.
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Farmers of North America Strategic Agriculture Institute (FNA-STAG) is a not-for-profit organization with the
single mission of “Improving Farm Profitability.”
For more information contact:
Bob Friesen, CEO: (613) 230-2222 / (613) 852-9711