Price Pooling Program: Frequently asked questions
Frequently asked questions
1. How do I apply as a marketing agency?
In order to apply for a price guarantee agreement, you must be an eligible marketing agency. The eligibility criteria for a marketing agency can be found in the Who Can Apply section. The application form can be downloaded from this Web site, or you can receive a hardcopy by mail, facsimile or e-mail by getting in touch with AAFC (see the Contact section).
2. Is there a cost to the marketing agency to use the program?
No, there are no user fees charged for the use of this program. However, the marketing agency must meet the program eligibility requirements.
3. How long does it take to receive the agreement?
The marketing agency's completed application must be received by AAFC at least eight weeks prior to the agreement being needed. This time period should be sufficient for the whole process (review and various departmental approvals) to take place.
4. Does the marketing agency have to get a new agreement for each crop year?
Yes. The agreement is valid only for the specified crop year. The marketing agency must make an application annually to participate in the Price Pooling Program.
5. Can the agreement be changed during the year?
There are situations where the marketing agency will request that the agreement be amended (that is, modify the product list or amend the maximum price guarantee levels). Any amendments to the price guarantee levels will have to undergo a similar review process to that of the initial application. AAFC tries, as much as possible, to meet the deadlines requested by the marketing agency.
6. How is the maximum price guarantee level determined?
In its application, the marketing agency requests a maximum price guarantee for each agricultural product being pooled based on its expected average wholesale price (EAWP) for a given period. Specialists from AAFC also determine an EAWP for the same period and the level of risk related to the marketing of the product taking into consideration factors such as production, demand, quality and price trends of the market. A review committee determines the risks related to the marketing agency's capability to implement the marketing plan being proposed, and to the agricultural product to be guaranteed. The maximum price guarantee is then determined by applying a risk factor to the EAWP of an agricultural product for a given period.
7. What agricultural products can be covered under the Price Pooling Program?
Any agricultural product that is produced in Canada and delivered to the pool can be covered under the Price Pooling Program. Agricultural products are defined as:
- An animal, a plant or an animal or plant product; or
- A product, including any food or drink that is wholly or partly derived from an animal or plant.
8. What are the obligations of a marketing agency?
The marketing agency is accountable to the Minister for the efficient administration of the program. It must comply with the Price Pooling Program agreement and procedures outlined in the administration guidelines.
In general the obligations of a marketing agency are to:
- Ensure that the crop delivered is of marketable quality, graded and tested on delivery and adequately stored by the marketing agency so as to remain of marketable quality until sold;
- Keep the agricultural product in storage insured;
- Pay to the producer for the agricultural product delivered to the agency an initial payment in accordance with the price guarantee agreement;
- Ensure that the agricultural product delivered was produced by the producer receiving the initial payment;
- Market the agricultural product at the best possible price obtainable over a reasonable time frame in all markets;
- Pool the proceeds of the sale of the agricultural product;
- Inform AAFC of any payment to producers above the maximum initial payments specified in the price guarantee agreement (such as interim or final payments);
- Distribute equal returns to the producers for agricultural products of like grades, varieties and types; and
- Return to the producers the proceeds of the sale of all of the agricultural product produced and delivered during the period specified in the agreement, after deducting the initial payment, the marketing agency's costs and any reserves.
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