Financial Protection for Produce Sellers - RCC Action Plan Update

1. RCC Action Plan Item: Financial Protection for Produce SellersWebinar presentation December 2013 Agriculture and Agri-Food Canada (AAFC) Susie.Miller@AGR.GC.CA United States Department of Agriculture (USDA)Charles.Parrott@ams.usda.gov

2. Content • The way forward • Overview of the initiative • Progress update since 2012 • Key Issues in single dispute resolution body discussions • Ongoing alignment work • Next steps

3. An initial 29 item RCC Action Plan was announced in December 2011. We are now entering the final months of the initial Action Plan. In recent Canada Gazette and Federal Register consultations, PCO/OIRA received stakeholder submissions representing 160 organizations. Canada and the US are committed to another phase of work and are considering input received with Departments. Canada and the US will develop an outline of a forward plan for regulatory cooperation by the Spring, building on progress to date and lessons learned through the implementation of the initial Action Plan. Both governments plan to engage stakeholders in the development of the next phase of work. 1. RCC – The Way Forward

4. 2. Overview of the initiative • The Canada-United States (U.S.) RCC Action Plan released on December 7, 2011, proposed that Agriculture and Agri-Food Canada (AAFC) and the U.S. Agricultural Marketing Service (AMS) “will establish comparable approaches to achieve the common goal of protecting Canadian and U.S. fruit and vegetable suppliers from buyers that default on their payment obligations.” • USDA and AAFC have held numerous stakeholder consultations. • On April 2, 2013, Government of Canada announced its consideration of single licensing dispute resolution provisions (such as membership, contract requirements, etc.) for the Canadian fresh produce industry, as a partial response. • In addition, Canadian industry led four Canada-U.S. stakeholder meetings over the past six months to examine a range of tools that could provide financial protection to fresh produce sellers operating in Canada.

5. 3. Progress update since 2012 • As part of the Canadian Food Inspection Agency (CFIA) broad consultations on the regulatory framework for the Safe Food for Canadians Act (SFCA), CFIA included the following questions: • Do you support the proposed approach of industry providing arbitration of fair trade practices for fresh fruit and vegetable dealers? • Under what conditions should an entity be selected to carry on this function? • Do you support the identification of the Dispute Resolution Corporation as the entity for this function? • In addition, AAFC with the CFIA, are consulting with Canadian and U.S. stakeholders over January and February, 2014 on elements of a single dispute resolution body (eg., membership, contract requirements, arbitration process and financial security requirements) that would ensure its effectiveness as a risk mitigation tool. • The GoC is also continuing to investigate other potential risk mitigation measures that could, in instances of buyer insolvency, increase sellers’ success in receiving payment.

6. 4. Key issues in single dispute resolution body discussions • The single dispute resolution body approach is a critical step towards achieving comparable approaches and outcomes between Canada and the U.S. in terms of financial protection for sellers of fresh produce. • Currently, dealers of fresh produce operating in Canada interprovincially and/or internationally must be licensed by the CFIA or be a member of the Fruit and Vegetable Dispute Resolution Corporation (DRC). • In the new approach: The Minister of AAFC would reserve the right to require licenses for purposes of food safety to all sellers of food – including fresh produce. The Minister would also require all sellers of fresh produce to be members of a single, third party dispute resolution body.

7. 4. Key issues in single dispute resolution body discussions The objective of the discussions are to gather feedback from the Canadian and U.S. fresh produce industry on the proposed specific elements of a single dispute resolution body so that we can ensure the best possible Canadian dispute resolution body. The discussion document is to seek feedback and does not represent the official position of the GoC or industry. It is a compilation of ideas and approaches that have been gathered with stakeholders, analysis of the current dual arbitration body approach and practices for other Canadian agriculture commodities. The results of these discussions will inform the development of SFCA regulations.

8. 5. Ongoing alignment work • AAFC will make available to stakeholders the results of analysis currently underway on credit insurance as a tool. • The GoC will be holding consultations on the Bankruptcy and Insolvency Act in 2014. • Additional analyses and consultations will be ongoing and collaboration will continue between AAFC and USDA.

9. 6. Next steps • Participation is encouraged in stakeholder discussions on specific elements of a single dispute resolution body. • To view discussion schedule, document and process for providing your comments, please visit: http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-product sector/horticulture/horticulture-canadian-industry/financial-protection-to-produce-sellers/?id=1344610708232 or e-mail:RCC-FETP@AGR.GC.CA or RCC-BTB@one.usda.gov.