APAS survey focusing on drought and grain contracts

Sep 28, 2021

The organization plans to use the information to advocate for producers

By Diego Flammini
Staff Writer
Farms.com

A Saskatchewan farm organization is asking producers to provide information about how the drought is affecting their businesses.

Agricultural Producers Association of Saskatchewan (APAS) has launched an online survey to understand how the drought is affecting the relationships between farmers and grain buyers.

The anonymous nine-question survey asks farmers questions like if they have or expect to incur financial costs because of unfulfilled contracts.

“We’ve had several calls from our membership about contract buyouts from the grain companies,” Bill Prybylski, vice president of APAS, told Farms.com. “We want to find out how extensive the problem is across the province and some of the variations in contracts between these grain companies and what some of them are doing to help producers.”

Buyouts occur when a farmer is unable to fulfill a contract with a grain company.

The farmer would be responsible for the difference between what the original contract was made for and the value of the grain at the contract buyout date, plus any administrative fees.

These can result in significant payments.

“In some cases, farmers are paying several hundreds of thousands of dollars back to the grain companies,” Prybylski said.

APAS is hoping the responses from the survey will identify how grain companies and producers can find other avenues to settle grain delivery issues.

This includes engaging with grain companies too, Prybylski said.

“We’d like to help producers come up with a plan to manage the contracts and see if any companies have come up with any ideas like rolling the contract forward,” he said.

One challenge, however, is individual grain companies may have different rules about their contracts.

Standardized contracts would help reduce confusion among producers, Prybylski said.

“It’s something we’ve advocated for,” he said. “There’s a variety of contracts out there and a lot of producers assume they’re all the same. We’d like to see a standard contract from all the grain companies that lay out what the obligations are.”

Coming up with standardized contracts could be its own challenge.

This could require cooperation from provincial and federal representatives.

“I think the Canadian Grain Commission has a role to play and perhaps the provincial government as well, to help the industry going forward,” Prybylski said.

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