The Alberta Government has suspended a program of loans in Picture Butte Feeder Cooperative, the largest cattle financing cooperative in the province, after an inspection, alleged a series of poor management and financial regulation problems.
The suspension could mean “a significant and unprecedented interruption” for the members of the cooperative and their agricultural operations, according to a former official. The news comes since many Alberta farmers are already concerned about the financial impact of American tariffs.
The buttte food cooperative of the image, which was formed in 1991, is part of the province Loan Guarantee Program of the Food Association (FALG)that helps cattle producers to get easier access to loans. The cooperative is based on “Feedlot Alley”, located in the south of Alberta.
The FALG program has been in force in Alberta since the Great Depression, and intends to provide “relatively easy access to leverage of low interest backed by a government guarantee,” according to the province.
In January, Alberta’s Minister of Agriculture and Irrigation, RJ Sigurdson, signed an order that declared that the province would prohibit the cooperative from issuing more progress on its members under the program.
The statements of the province joined an affidavit for Tony Ankermann, vice president of the Cooperative, dated February 18.
They include that the cooperative supposedly accepted members of the ineophible feeder, used incomes of guaranteed loans for inappropriate purposes, provided more advances than the allowed and obstructed provincial inspections, among other violations.
In response to the order, the Cooperative requested the Court’s approval to appoint a restructuring officer, Álvarez & Marshal, to supervise its operations and work to lift the loan suspension.
Several members of the Board resigned after the order was issued, while the rest renounced the appointment of a restructuring officer, according to documents on the Alvarez & Marshal website.
“When looking for the appointment of a restructuring officer, PBCF’s intentions are to make the necessary changes within PBFC to ensure that PBFC is better positioned for continuous operational success in the future, ideally with the support of the ministry and lenders,” Ankermann wrote in the affidavit.
The consultants of Álvarez and Marsal are now acting as if they were the Board and the PBFC staff while handling commercial issues, according to a statement from Alberta Agriculture and Irrigation.
According to the information published on the Álvarez & Marshal website, PBFC owes a little more than $ 281 million to its lenders under the credit agreement, which says it is approximately the same amount that the PBFC gave to its members.
As of August 31, 2024, the PBFC had a total of 227 active and inactive members, according to Ankermann’s affidavit.
Provincial inspections
According to the information published on the Álvarez & Marshal website, a letter was delivered to the cooperative that declared the inspection and investigation section of Agriculture and Alberta irrigation carried out PBFC inspections between September 7, 2023 and May 15, 2024.
This inspection increased the alleged violations, which triggered the suspension of the cooperative loan program.
Those findings were played.
The PBFC had tried to seal Ankermann’s affidavit, writing that “it contains a copy of the report and the compliance memorandum, each of which refers to certain ministry findings that are subject to a significant dispute by certain parts.”
“The content of the report can also be the issue of other legal procedures of various parts, including PBFC,” says a bank report published on the Álvarez & Marshal website.
According to a declaration of agriculture and alberta irrigation, there is no formal process to dispute a ministerial order by virtue of the Law on the Guarantee of Food Associations. However, the affected parties could consider requesting a judicial review.
A spokesman for Sigurdson rejected an interview request, writing in a statement that “to protect the confidentiality of Albertans, agriculture and irrigation they have a policy not to make public registers public.”
“Twice a year, agriculture and irrigation inspect the food associations that participate in the loan guarantee program of the Feder Association to guarantee the fulfillment of its rules,” Darby Crouch wrote in an email.
The Alberta government agreed to guarantee 15 percent of the installation of PBFC loans, says the Awermann’s affidavit. He continues to say that the Government guaranteed to cover up to $ 60 million, but reduced it to $ 50.25 million on July 17, 2024.
Possible significant and unprecedented interruption ‘
Given the order, Ankermann’s affidavit establishes that PBFC currently cannot provide rapid and reliable access to financing for members. When looking for a restructuring officer, Ankermann warned of the impacts if the members cannot access funds or obtain financing elsewhere.
Given the ministerial order, the PBFC said that its members cannot currently access the financing that said it is “critical for the operations and livelihoods of many members.”
“Yes … PBFC cannot meet compliance requirements [laid out in the order]There will be a significant and unprecedented interruption for the members and their respective agricultural operations, “says the affidavit.
“This has the potential to create a domino effect throughout the image of the image of Butte, considering that PBFC is the largest food association of Alberta.”
It continues to declare that “rumors are extending throughout the community of the Butte community on order and PBFC” and that “urgent attention is required to provide stability and restore confidence in PBFC.”
Curtis Vander Heyden, vice president of the Alberta Association, a defense organization for beef producers, wrote in an email that there was currently “stress and concern” in two ways when it comes to the situation.
First, he understands that some members who have livestock funded by PBFC cannot advance to additional funds to cover feeding costs, he said. Second, he believes that others have safety deposits or approved funds tied and cannot use it to buy cattle.
“We want to make sure [the FALG program] It is still viable and available for producers, “Vander Heyden wrote in an email.
CBC News sent emails to all the most recent directors of the cooperative that appear in the documents of the Judicial Administration. Some declined to comment, while others have not yet responded.
George L’Eureux, spokesman for the Alberta Alert Association, the Umbed Organization to which food associations in Alberta belong, said the Provincial Board was working with all the parties involved to reach a timely resolution.
