Proposed legislation that gives the Canadian Grain Commission auth-ority to arbitrate grain delivery disputes between farmers and grain companies is being viewed with skepticism by grain growers.
Bill C-30, the Fair Rail for Grain Farmers Act, would give the grain commission the authority to rule on disputes involving farmers who are contracted to deliver grain during a specified time frame and grain companies that are unable to take delivery.
Contracted grain deliveries were deferred by several months this winter because elevators were filled to capacity and railways were moving less grain than expected.
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Bill C-30 was approved by the House of Commons standing committee on agriculture.
However, many producers say provisions in Bill C-30 that give the grain commission the authority to arbitrate disputes between farmers and grain companies will be of little or no consequence.
In many areas, grain growers have access to only a handful of elevator companies.
To seek arbitration in a dispute with a grain company would be a costly move in more ways than one, said grain growers attending a recent rail transportation meeting in Nipawin, Sask.
Picking a fight with a local grain buyer rarely works out in the grower’s favour, they added.
Growers who seek arbitration could find themselves on the outside looking in the next time they have grain to sell.
Jim Smolik, assistant chief commissioner with the grain commission, acknowledged that arbitrating disputes between growers and elevator companies is a sensitive issue, especially when grain companies have little control over how much grain is moving by rail.
Smolik said the commission is hoping that grain companies and farmers will be able to settle disputes stemming from plugged elevators and slow grain movements.
“We’re hoping that there’s good commercial arrangements out there so we don’t have to get involved in the middle of this,” he said.
Regulations that support Bill C-30 have yet to be determined, but it is widely expected that the grain commission will become involved in arbitrating disputes only if producers or grain companies request arbitration.
It is hoped that in most cases grain companies and farmers will negotiate contracts, honour the terms of those contracts and work together to settle delivery related disputes.
“If you have a contract for November (delivery) and you know that your elevator can’t actually take any grain because its 99 percent full … it will be up to you then if you want to bring it to the grain commission for a (resolution),” Smolik said.
“We just want to make sure that we’re only involved when there’s actually a request for us to become involved.”
Smolik said the enforcement of delivery contracts between farmers and grain companies will be closely tied to grain companies’ ability to negotiate service level agreements with railway companies.
If grain companies cannot negotiate service level agreements with railways and enforce the terms of service level agreements, then their inclination to honour the terms of delivery contracts with grain growers could be affected.
For this reason, much focus will be centred on grain companies’ ability to negotiate service level agreements with meaningful and enforceable monetary penalties, which would be levied against railway companies who fail to provide the level of rail ser-vice that was promised.
Either way, farmers in Nipawin said they are a small cog in a big wheel.
Because of that, their ability to enforce contracts and receive compensation for lost delivery opportunities will be compromised.
“Did you ever have a disagreement with an elevator man?” said one grower. “Because the next time you come (to sell grain), you’re mud.”