NFU and Wheat Growers need adjustments to contracts
The National Farmers Union and the Western Canadian Wheat Growers Association don’t agree on a lot. But the 2 teams do agree on one factor; grain manufacturing contracts should be fastened.
“We had a lawyer look into these contracts, as an organization,” mentioned Kenton Possberg, a wheat growers director in Saskatchewan.
“What he came back with, was that these contracts were extremely one-sided. To the point that they’re 95 percent in favour of the grain company…. If there is going to be a year to try and get these issues resolved, it’s got to be this year.”
This fall, lots of of western Canadian farmers have been unable to fulfill their manufacturing contracts for canola, oats and different crops, as a result of warmth and drought slashed yields in half or worse.
Many growers are going through big penalties of $100,000 or increased, for failing to meet their contracts. Some farmers have been capable of resolve the difficulty with grain corporations, however many others couldn’t. Many at the moment are coping with the monetary crunch of poor yields, excessive enter prices and substantial contract penalties.
In response, the NFU is urging the federal authorities to make use of the Canada Grain Act and create rules “that would require all grain contracts to include an Act of God clause,” the group mentioned in a launch.
“There is no question that many farmers are short grain through no fault of their own… By enticing farmers to sign contracts that don’t include an Act of God clause, companies transfer all the risk to farmers,” mentioned Dean Harder, of Lowe Farm, Man.
Mandating such language in grain contracts wouldn’t be a easy or speedy course of.
Until that occurs, corporations needs to be required to roll over contracts if there was a crop failure, “allowing farmers to deliver grain owing at the contract price the following year,” the NFU added.
Other farm teams have additionally taken a place on grain contracts, to cut back the monetary threat to producers:
The Agricultural Producers Association of Saskatchewan (APAS) and 6 commodity teams within the province have despatched a letter to the Western Grain Elevator Association asking grain corporations to forgo contract penalties this 12 months. As properly, APAS president Todd Lewis has mentioned {that a} standardized contract is required, with “seven or eight main features (in) every contract.”
Lynn Jacobson, Alberta Federation of Agriculture president, mentioned “AFA policy has been that we need a ‘Standardized Grain Production Contract’ that is fair to producers and grain companies.”
In Manitoba, the Keystone Agricultural Producers has determined that producer training on grain contracts and advertising and marketing is one of the simplest ways to alleviate threat.
The Western Producer contacted the Grain Growers of Canada for its place on grain contracts, however representatives didn’t reply by press time.
Unlike the NFU, the Western Canadian Wheat Growers Association doesn’t have a selected proposal to resolve the grain contract dilemma. But it’s uncommon for the NFU and Wheat Growers to be on the identical aspect of a grain advertising and marketing situation.
The NFU stays an ardent supporter of the Canadian Wheat Board and the Wheat Growers lobbied, for years, to get rid of the CWB.
Nonetheless, the established order is not acceptable for grain contracts, Possberg mentioned.
Over the years, Wheat Grower representatives have met with grain firm managers, to try to type out points round grain grading, value reductions and contracts.
Those talks weren’t productive.
“We’ve been trying to work with the grain companies, this whole time, and we really haven’t gotten anywhere,” mentioned Possberg, who farms close to Humboldt, Sask.
“We have no ability to negotiate the contract. It’s a take it or leave it.”
At this level, Possberg is fearful a few “knee jerk reaction” to the grain contract situation. Farmers want to think about the implications of one thing like a standardized contract.
Grain corporations may very well be strongly against such an concept, as a result of providing higher phrases is nearly like a buyer loyalty program.
“The contracts are competitive,” mentioned Wade Sobkowich, government director of the Western Grain Elevator Association. He added that corporations view it as “giving them advantage, (in) attracting grain from farmers.”
Flexible contracts, extra beneficial language and competitors between corporations is sweet for producers. But that precept falls aside, if there isn’t sufficient competitors in sure components of the Prairies, Possberg mentioned.
“In any local area, some people only have one company that’s close enough…. Some people have two.”
Besides its request for a common Act of God clause, the NFU additionally needs adjustments to Agri-Stability, so farmers can enroll late for this system.
“Since the cost of having to buy-out shortfalls can be included in a producer’s AgriStability expenses, the NFU also urges the governments of Alberta and Saskatchewan to follow (British Columbia’s) and Manitoba’s example and allow late enrolment…. While a short-term fix, it could keep more farmers in business.”
For extra content material associated to drought administration go to The Dry Times, the place you could find a group of tales from our household of publications in addition to hyperlinks to exterior sources to assist your choices by means of these tough instances.
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