Financial protection needed in face of bankruptcies

In February 2021, Country Fresh, its U.S. subsidiaries and its Canadian entities Sun Rich Fresh Foods filed for bankruptcy. Sun Rich Fresh Foods, based in Brampton, Ontario, cuts and prepares made-to-order fresh fruit.

Canadian horticultural leaders are warning about current and looming bankruptcies in both Canada and the United States. 

 

Prolonged shutdowns, lost sales, and increased costs have already increased the value of U.S. non-payment complaints under the Perishable Agricultural Commodities Act (PACA) in 2020 by more than 50 per cent over the year before. As the pandemic continues, the economic damage caused by COVID-19 is becoming more acute. 

 

For example, in February 2021, Country Fresh, its U.S. subsidiaries and its Canadian entities Sun Rich Fresh Foods filed for bankruptcy. And the list of restaurants permanently closing their doors is growing on both sides of the border. 

 

The timing may finally be right for new federal enabling legislation to provide financial protection for Canada’s produce growers and sellers.  

 

The February 17 House of Commons Finance Committee pre-budget consultation report recommends the federal government implement legislation similar to the U.S. Perishable Agricultural Commodities Act (PACA) to support needed liquidity and protect produce sellers during bankruptcy. 

 

PACA ensures that produce sellers in the U.S. are paid if a buyer becomes insolvent. Until 2014, it also protected Canadian growers selling into the U.S., but that special status was revoked because of the absence of similar Canadian legislation for U.S. exporters.  

 

“We are starting to see restaurants and foodservice businesses being forced into financial protection or even shut down permanently. This is something that will impact all fruit and vegetable growers,” says Jocelyn St-Denis, executive director of the Association des producteurs maraîchers du Quebec. “This is no longer simply a problem for those growers who supply export markets, and as the economic impacts of COVID-19 continue, we must ensure farmers are paid for what they grow and sell.” 

 

That’s why the Ontario Fruit and Vegetable Growers’ Association is encouraging growers and others in the industry to let the federal government know how critical the legislation is. That includes Agriculture Minister Marie-Claude Bibeau and François-Philippe Champagne, Minister of Innovation, Science and Industry, and local MPs. 

 

For the complete story, go to page 7, March issue of The Grower: https://bit.ly/2NHrCNr

 

Source: March 2021 issue, The Grower, Authored by Lilian Schaer

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Publish date: 
Monday, March 1, 2021

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