Farmers have access to a variety of grain contracting tools that help manage price, delivery and production. With many options to choose from, farmers should shop around to find the contract that works best for their farm. Start by reading and understanding the terms and conditions, since they outline details on delivery, acceptance, payment, default and much more.
What can farmers do if their canola is not accepted in the contracted delivery period?
All contracts allow for extended delivery periods. You are obligated to deliver in both the initial and extended delivery period. If you are unable to deliver in the extended period, talk to your grain buyer about making changes to the terms, look for contracts with shorter extension periods, or arrange for alternate delivery.
Do grain companies compensate for grain not accepted during the delivery period?
As of August 1, 2014, all grain marketing contracts must contain provisions to compensate farmers for grain not accepted within the stipulated delivery terms, including the initial and extended period. The application and available compensation varies between companies and by signing the contract you agree to the terms.
What happens if I deliver less than the contracted amount? Do tolerances exist (i.e. 5% over or under)?
There isn't a magic number. Your grain buyer may be able to discuss alternate solutions and the sooner you speak to them the better your options may be. Buyers will consider several factors such as stocks position; the likelihood of sourcing the grain elsewhere; and the size of your contract.
Is there a process for arbitrating contract disputes?
There is no one system for recourse. For disputes over the compensation for grain not accepted during the delivery period, farmers can raise the issue directly with the Canadian Grain Commission who may appoint an arbitrator. Additional information about this question can be found in the September 2017 Issue of Canola Digest.
Want to learn more about grain contracts? Read CCGA's A Practical Guide to Navigate Grain Contracts. You can also call 1-866-745-2256 to request a free copy by mail.
Stay tuned to next week's CCGA Hub post, where we answer questions related to contract defaults in part two of this article.