Q: When grain is delivered to an elevator company, who owns the dockage? I recently entered into a contract that provided that the grain company will own all screenings and foreign materials removed from the commodity. What if the grain company doesn’t remove the screenings? Does this mean this is my property?
A: The Canada Grain Act and regulations under it are the primary rules dealing with grading and marketing of grain. It requires that a licensed elevator operator compute the dockage to the nearest 0.1 percentage.
There is nothing in the legislation or regulations dealing with ownership of dockage or screenings. In my view, and that of a spokesperson for the grain commission, ownership of dockage would be a matter of contract between the elevator company and the producer.
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Unless clearly agreed otherwise, in my view, the sale of grain assumes screenings even though an amount is deducted for dockage.
A commission spokesperson said, “producers may request cleaning at the primary location, but primary elevators are not required to clean grain, or keep and maintain cleaning equipment.
By definition, a principal function of terminal elevators is cleaning of grain. My understanding is they sell screenings for livestock feed, and there is certainly nothing in the act to direct them otherwise. The handling system as established by the act generally assumes that grain will not be cleaned until it is received into a terminal elevator. Of recent years, the large high throughput elevators at primary locations have been cleaning grain to export standards, but they are not required to do so.”
In my interpretation of the law, there would be nothing preventing a producer and elevator company from agreeing that the dockage would be returned to the producer. However, I suspect that given the inequality of bargaining power between the grain company and the producer, a producer wanting his dockage would probably have to pay a substantial handling and processing fee.
I have found this to be a fascinating question. In my 17 years as columnist no one has asked me about ownership of dockage. I would especially welcome any thoughts or comments on this subject. Is this a concern to producers? Are there practices that you are aware of dealing with dockage and screenings? If this is a subject of interest to readers, I will write a follow-up column.
Don Purich is a former practising lawyer who is now involved in publishing, teaching and writing about legal issues. His columns are intended as general advice only. Individuals are encouraged to seek other opinions and/or personal counsel when dealing with legal matters.
