Six Canadian canola farmers have filed a class action lawsuit against Regina, Saskatchewan-based oilseed and grain commodities trader Input Capital Corp, accusing the firm of predatory lending.
According to the lawsuit, Input’s streaming canola contracts – in which the company paid up front for certain amounts of future production – were unfair and the plaintiffs asked the Regina Court of Queen’s Bench to find them illegal, reported The Western Producer on 10 May.
The plaintiffs accused Input of setting too high interest rates, not providing sufficient information to those entering into a contract with the firm, and of not sharing risk.
The text of the lawsuit claimed that Input’s contracts did not account for factors outside of the farmers’ control, such as weather, moisture or lack of moisture and equipment failure, that could affect production.
“Input assumed at the beginning of each streaming contract that the class member would produce the same amount every year without fail,” the court documents said.
“The anticipated returns that Input suggested for the multi-year streaming contracts were unachievable over the course of the contracts, given that issues outside the control of the class member were preventing crops from being farmed.”
“Instead of sharing the risk, Input demanded more and more security against … land, equipment and possessions. Further promises were made that were not honoured, like spring and [autumn] payments on a schedule, statements of deliveries, payments for trucking grain, cash to purchase fertiliser, payments for custom harvesters and inputs for the crop.”
Input told The Western Producer that it “completely denies” all of the “false allegations” and intended to vigorously defend against the class action.
The company insisted it had “hundreds” of satisfied clients and a reputation for honesty and fair dealing, wrote The Western Producer.
Input also had another ongoing court case with Macoun-based farmer Terry Gustafson, from whom the company took “truckloads of durum” to fulfil a contract, while Gustafson claimed his contract with the company only concerned canola.