CWB contracts | The board also allows producers to change grade and protein levels
BRANDON — Hundreds of farmers have used act of God clauses and thousands have requested grade and protein changes within CWB pools this crop year, says CWB’s vice-president for grain procurement.
“It’s really significant,” Gord Flaten told reporters after a presentation at Manitoba Ag Days.
“Even in a year like this where in general … quality was good, even in a year like this it’s not possible for a farmer to predict perfectly what their grain and especially their protein is.”
Act of God clauses and the ability to request grade and protein changes are crucial marketing advantages that CWB contracts have over most grain company contracts. The board has hoped they will attract farmers to the re-born organization.
Read Also
Genetic resistance for anthracnose is on the way
anthracnose resistant lentil varieites are on the way according to Ana Vargas, University of Saskatchewan lentil and chickpea breeder. She also shared some management methods for the anthracnose in lentils.
Only a few crops offer act of God protections, mainly because protecting farmers from acts of God such as hail and harvest-time rain means buyers aren’t protected, especially if they have already forward sold the grain they contracted.
Act of God clauses impose a risk and often a cost on those who provide them, but the CWB’s pools are uniquely able to manage the risk.
The CWB pools include thousands of farmers, so the number of act of God clause requests and grade deviations in years like 2012-13 don’t have a big impact.
Flaten said the board wants farmers to inform it of problems meeting contracts as soon as they can.
CWB wants to know right away if a crop has been hailed out or wind damaged so it can adjust its sales volume outlook.
Crops that have been degraded by weather or have different protein levels than the farmer expected also need to be disclosed quickly so that CWB can adjust its sales program.
Farmers will probably not be penalized if they act fast enough, which is the situation this year.
“Because we’re not selling the whole pool when you sign your contract with us, we’re selling it all the way through the year, if you tell us soon enough that you don’t have the grade you contracted and then ask for it to be changed, chances are that we can do that with no cost to the pool,” said Flaten.
“That’s the principle: as long as it doesn’t cost the pool and therefore other farmers to change your grade, then we can do it for free.”
However, a farmer who shows up at an elevator to deliver CWB-contracted grain that has been called but which doesn’t match the contract specifications might face a penalty.
“There’s a good chance there’s a cost if you wait until then,” said Flaten.
