Production, marketing, and technology-use contracts are increasingly common but are they fair to farmers or tilted in companies’ favour?
Lots of farmers don’t like them but are production, marketing, and technology-use contracts unfair to farmers?
“We still hear from our members that the contracts are typically quite one-sided,” said Doug Faller, policy manager with the Agricultural Producers of Saskatchewan.
“Now with the changes to the wheat board and so on, the need for addressing this issue simply grew because we can now add barley and wheat to the list of contracts being signed by farmers.”
To get a better handle on the situation, University of Manitoba agricultural economist Jared Carlberg and a research associate are surveying farmers. But they’re having trouble getting producers to participate — with only 280 farmers responding after more than 1,000 farmers were mailed the survey. The is now using an online survey (available at www.surveymonkey.com/s/ZKNZNV6>) and hoping more farmers will participate.
The early results suggest only a minority of farmers don’t like the contracts they sign. Just 24 per cent either strongly disagreed, disagreed or somewhat disagreed with the statement “I am treated fairly by a marketing contract.” Just over half disagreed with the statement that said their rights were protected by Technical Use Agreements.
“I don’t think the takeaway from our findings is that farmers should be happy with their contracts,” Carlberg said. “The takeaway should be there are significant areas where farmers might prefer to have changes.”
In recent years, farmers have complained about contracts that allow grain companies to inspect their bins, and Faller said rules governing deliveries can be a source of friction.
“Producers are typically required to deliver within a window, but there’s no obligation on the buyer’s side to accept in the same window,” Faller said.
Other complaints include linking input purchases to future grain sales, and the lack of an “Act of God’ clause.
Wheat contracts typically specify a certain grade and protein level, but don’t usually spell out the discount if farmer can’t meet those specifications, Faller said.
If farmers give “a clear indication” that they’re unhappy with the contracts they’re signing, his organization is willing to fight for improvements, he said.