Farmer frustration mounts over delivery contracts

Producers urged to seek compensation if delivery period extended beyond 90 days

Magnifying glass looking at contract.

The national body for canola producers says it will press major grain buyers to address grower concerns with marketing contracts.

“If grain companies are hearing it from (producers) as well as the association, hopefully they can start to make a change in this area that really frustrates farmers,” said Cheryl Mayer, director of policy development for the Canadian Canola Growers Association.

Her association has received an increasing number of calls from producers who are unhappy with grain-marketing contracts. The number of complaints has increased sharply as the clogged rail system has caused “the most frustration for farmers” who are finding delivery dates in their contracts mean little, she said.

“(Producers are) just not able to deliver grain regardless of what their contract says,” said Mayer. “Many of them are being extended beyond even their extended delivery period.”

The Canola Growers is in the process of setting up meetings with grain companies to press for reforms, particularly when it comes to delivery promises. Under those contracts, grain companies have the right to push back delivery periods by up to 90 days if they’re not able to accept delivery, she said. But farmers typically aren’t compensated for their carrying costs.

“Compensation is not the norm,” she said. “Farmers are not paid any compensation or interest on this. They’re just not able to deliver their grain.”

From the Grainews website: CN, CP would accept ‘reciprocal penalties’ in service agreements: Sask.

And while grain companies can cancel contracts if producers aren’t able to deliver their grain when called by their elevators, producers can’t do likewise if the situation is reversed.

“What farmers find frustrating about the extended delivery period is that it’s very one sided,” said Mayer.

Producers are urged to carefully read every contract — but a University of Manitoba study conducted last summer found only 17 per cent of survey respondents read their entire grain contract.

“If you’re not reading (your contract) every year, you may not realize that there has been a change in the terms and conditions,” she said.

Once a contract is signed, producers have little recourse to make changes after the fact.

“If you have signed the contract, that confirms that you have read, understood, and agree to all the terms in that contract,” said Mayer. “The responsibility is really on the producer to fulfil their obligations.”

Mayer recommends producers calculate their carrying charges for a 90-day period and speak to their grain company about their concerns.

“What farmers can do is ask to have something written into their contract that would see them being paid… some kind of compensation if they’re not able to deliver in the delivery period,” she said.

And should the grain company agree, get it in writing, she added.

“Handshakes are risky.”

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