Farmers frustrated over delivery contracts that aren’t honoured

Farmers not compensated and still under contract when grain companies go past 90-day extension limit on delivery contracts

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.”

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.

From the Manitoba Co-operator website: CN, CP would accept ‘reciprocal penalties’ in service agreements: Sask.

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.”

About the author

Reporter

Jennifer Blair

Jennifer Blair is a Red Deer-based reporter with a post-secondary education in professional writing and nearly 10 years of experience in corporate communications, policy development, and journalism. She's spent half of her career telling stories about an industry she loves for an audience she admires--the farmers who work every day to build a better agriculture industry in Alberta.

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