The source of funding for the Study is provided by Agriculture and Agri-Food Canada. The non-profit sponsor of the Study is the Canadian Federation of Agriculture. The Study will be undertaken in collaboration with Commodity Producer organizations, commodity brokers and other interested parties and stakeholders who will devote time to the goals of the Study
All agricultural sectors in Canada are invited to participate in the two-year study. Currently, twelve organizations have agreed to participate. Click here for the list and further discussion. The Study seeks to secure the participation of no more than twenty Commodity Producer organizations
The study will be conducted online through this website and by email and will use advanced website and database management techniques developed by the University of Saskatchewan.
Changes in the role of government and deregulation of the agricultural commodity sector have led to the potential for Producers to be at risk in sales transactions both domestically and abroad. Access to higher premium markets by Producers has been limited by the lack of access to financial data on buyers. This study is undertaken to analyze the agricultural sector awareness of credit risk, tools available to offset that risk and provide a low-cost method of protection sales. Some financial risk mitigation tools have historically been available to large agricultural concerns and government but have been less effectively available to Producers.
1Goals of the Study
The goal of the study is twofold. The first major goal is to undertake significant research in the agricultural sector to understand Producer access to information about various issues related to buy/sell “commercial behaviors” between buyer and seller, understanding of credit risk and means to mitigate such credit risk.
The second major goal is to explore the development of a credit insurance based program that will permit Producers to insure all or a portion of their domestic and export accounts receivable against buyer non-payment due to insolvency or slow pay. Payment assurance will be sought for domestic as well as export credit transactions. Education of farmers for the use of credit insurance as a risk mitigant as well as security for increased borrowing capacity for working capital lines of credit will be explored.
Accounts receivable insurance, also known as credit insurance, has been used by government and industry in Canadian agriculture for a very long time. It was used by the now defunct Canadian Wheat Board to offset risk export and is currently used by the Canadian Grain Commission to insure its domestic risk posed by Licensee default.
GCNA, our participating private credit insurer, has recently been approved to participate in the CGC credit insurance program.
The primary method of collecting data will be carried out principally through Producer Commodity Organizations, Commodity Brokers and other interested stakeholders. The Study will extensively utilize surveys posted online at this website. "Surveys will be sent out to you approximately once per month." Surveys will take no more than a few minutes to complete.
The Study will also send out surveys to Producer Commodity Organizations and other interested stakeholders with respect to agricultural sector business practices, structure of agricultural sector and other non-Producer issues.
The Study will also seek to obtain input from other Stakeholders with interest in providing assistance in understanding issues confronting the agricultural sector.
The technology backbone underpinning this methodology has been developed by the University of Saskatchewan.
3The University of Saskatchewan Software Development
The University of Saskatchewan Graduate School of Computer Sciences has agreed to lead the development of two databases along with associated websites.
The technology development initiative for CFACRMP is led and supervised by Dr. Ralph Deters. For more information about Dr. Ralph Deters and the University of Saskatchewan Graduate School of Computer Sciences, CLICK HERE
Two University of Saskatchewan graduate students lead software and website development.
Mayra Samaniego leads development of the Research Database and related CFACRMP.com website. For more information on this aspect of the Study, CLICK HERE
The Research Database is the backbone for all research undertaken as part of the Study.
Steven Xue leads development of the Commercial Database and related website. For more information on this aspect of the Study, CLICK HERE
The Commercial Database, referred to in the Work Plan as the Transactional Database System, or TDS, will be the backbone of the Credit Insurance based commercial system operated for the benefit of all Canadian agricultural Producers and associated Stakeholders.
In addition to a transactional system, the Study will also examine related practices for differing stakeholders in the vertical chain from inputs, to farming, to harvest, to sales of commodities through various sales and marketing channels.