Grain contracts guide

Grain Farmers of Ontario

This document is intended for general information and is not presented or intended as legal
advice.

Sample language is for guidance only and is provided as an example of common terms and
conditions currently or historically included in contracts.

Your contract may include additional clauses, or a requirement for declarations, not noted
within this guide. This may include, but not limited to, buyer provisions for sustainability
requirements, quality specifications, and end-user specifications (such as specific production
practices). Please make note of these additional clauses and discuss any requirements
with the buyer before time of signing.

ADDITIONAL RESOURCES
Grain Farmers of Ontario www.gfo.ca/marketing
Ontario Agri Business Association www.oaba.on.ca
Agricorp www.agricorp.com
Canada Grains Commission,
Grain Grading Guide www.grainscanada.gc.ca/en/grain-quality/official-grain-grading-guide/

ACKNOWLEDGEMENT
This Grain contracts guide is adapted, with permission, from A Practical Guide to Navigating Grain
Contracts, fourth edition, published by the Canadian Canola Growers Association (CCGA).

Grain Farmers of Ontario gratefully acknowledges the extensive effort involved in the original development
of this guide by the CCGA. The summary of common clauses contained within this guide are based
on contracts from Western Canada; however, similar clauses exist within Ontario grain contracts.

This guide has been modified to reflect regional differences in grain marketing practices and the
provincial regulations that provide safeguards and oversight to the Ontario grain industry.

v.2023-01 ä

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Table of contents

Understanding your grain contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Verbal contracts
Digital confirmation
Important first steps
Read and understand the entire contract

Variations in quantity and quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Implications of grade and volume differential
Be familiar with the grading process and quality parameters
Delivery declarations

Canada’s grain integrity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Delivery terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Be aware of the delivery terms
Prepare for an extended delivery period

Access to land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Defaults and contract cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Notify your grain company
Know your options
Understand the obligations and risks for not delivering against the contract
Determine the process to cancel a contract
Discuss how Acts of God or force majeure events will be treated

Set-offs and security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Recognize that contract defaults may affect other business transactions

Transfer of ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Farmer compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Canadian Grain Commission licensed facilities

Financial protection for farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Contract disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

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3
Understanding your grain contract
GRAIN CONTRACTS ARE essential to your While a standardized contract and common
farm’s marketing plan and the sale of your grain. language and terms could streamline the process,
it would also eliminate an element of competition
A contract is a legally enforceable agreement in the market. Grain companies compete for
committing the seller (e.g., farmer) to deliver a grain based on their contract provisions, and
set product and the buyer (e.g., grain buyer such farmers currently have the choice of selecting
as an elevator) to accept its delivery on or near contract terms that work best for their farm
a certain date for an agreed-upon price and and marketing plans.
quality, according to the outlined terms and
conditions. In short, a contract is an agreement VERBAL CONTRACTS
between two parties that a court can enforce. It is strongly encouraged that all contracts be
made in writing. However, in practice, verbal
Different contract types offer varying degrees agreements are often the basis for the essential
of risk protection, delivery certainty, and cash terms of a grain sale in Ontario. The elevator may
flow to farmers — each with different advantages consider this verbal agreement a contract.
and disadvantages. Depending on the type, a
farmer can lock in futures or basis, select a target
price, or schedule a deferred delivery.
WHAT IS A VALID
The terms and conditions governing the
contract are found in the fine print. These vary
substantially between grain elevators and
CONTRACT?
A valid contract is a binding
and enforceable agreement between two
i
processors, sometimes making a direct
or more parties. To be a valid contract,
comparison challenging.
there must be 1) offer and acceptance;
2) an intention to enter into the contract;
The associated terminology,
3) “consensus ad idem” or a “meeting of
often legal in origin, can cause
the minds” on the essential terms of the
confusion when reviewing
contract; 4) the essential terms of the
options and
contract; 5) certainty on the terms of the
understanding your
contract; and 6) consideration (monetary
contractual requirements.
payment or a promise to do something). ä

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4
While a verbal agreement can be valid and that the parties have not agreed on the terms
binding, it may be difficult for either party to (both essential and non-essential). Generally
remember exactly what was said, the terms speaking, and dependent on the factual
that were agreed to, and whether a contract circumstance in each case, a court could find
was even entered into in the first place. that only the essential terms form the basis of
the agreement and the non-essential terms do
There is a chance that a party could try to argue not apply.
that there is no contract if it works to their
financial advantage (i.e., if there is a dramatic To illustrate how this could be problematic, if
change in the market overnight). The farmer and/ a grain company has a liquidated damages
or grain buyer could try to take the position that provision in its standard form contract (non-
no contract was ever formed in the first place. essential terms) and this was not discussed in
the verbal agreement and no written contract
Should a dispute arise, lawyers have to review was signed, the farmer could argue that the
correspondence and gather witness statements farmer could argue they are not required to pay
to determine what was ultimately agreed to. If liquidated damages when they fail to deliver
the dispute goes to litigation, it could take the required grain. The argument is that there
years to resolve and the parties will end up was no “meeting of the minds” on this non-
spending an exorbitant amount of money on essential term.
legal fees.
Once you have a written agreement, make sure
Documents (e.g., written grain contract and you have a copy that is signed by all parties and
terms and conditions) are confirmation of what you have a copy of the fully executed agreement.
you have verbally agreed to deliver. It is important
to review these documents and raise any DIGITAL CONFIRMATION
questions or concerns within an established Farmers and grain buyers are now using
timeframe (typically 24 or 48 hours) if the technology such as email and text messages to
written terms do not align with what you thought make grain sales more efficient. It is important
you were agreeing to verbally. Your contract to note that confirmation with text or email is
will state that the terms are deemed accepted the digital equivalent of a signature on a paper
if not disputed within the noted timeframe. contract. Farmers should use caution in their
Farmers should put any disagreement with digital replies and ensure that their meaning
the terms in writing.

A contract will also outline the other terms and

conditions (non-essential terms) that both parties
are agreeing to. These terms may help you PRACTICE GOOD
mitigate your risk if things do not go as planned
(i.e., force majeure - a drought impacts quality
CONTRACT
MANAGEMENT
• Know where you keep your signed
i
and yield).
agreements.
If the grain buyer fails to provide a written • Do not lose your signed contracts.
agreement after the verbal agreement is made • Keep both a physical and digital copy
on the essential terms, this could put the grain if possible. ä
buyer at risk. The farmer may attempt to argue

GRAIN FARMERS OF ONTARIO

5
and intent is clear. Do not send any ambiguous IMPORTANT FIRST STEPS
statements or responses — including emojis — While grain companies use standard form
that could be left to interpretation. agreements, the farmer still has a right to
negotiate the terms. Before every contracting
season, ask for a copy of the grain company’s
standard form agreement, which includes all
terms and conditions. Compare grain companies’
CONTRACT AGREEMENT standard form agreements to determine which
IN THE DIGITAL AGE
In June 2023, a Saskatchewan
court released a decision stating that a
i company offers the best terms. Farmers should
become familiar with the terms and understand
what they mean. If this is confusing or causes
uncertainty, ask the grain company to clarify or
thumbs up emoji “ý” in a text response consider obtaining your own independent advice.
was an acceptable means of confirmation If there is an issue with any of the terms (including
to form a binding contract. The case deals the non-essential terms, such as default or force
with a dispute between Southwest Terminal majeure provisions), you should discuss these
Ltd. who was intending to purchase flax terms in more detail with the grain buyer.
from Achter Land and Cattle Ltd.. In March
2021, a representative for Southwest sent Take the time to read and understand your
out a general text to their producer contacts entire contract before signing.
• Ask for a complete copy of the contract
offering to buy flax at a set price. After that
including all terms and conditions before
text message, Achter and a representative
agreeing to the sale.
from Southwest had a call to further discuss • It can be a good idea to ask for Terms and
the purchase, a representative for Southwest Conditions even prior to contracting, especially
printed out the contract, signed it, took a if you have not worked with the grain buyer
photo, and texted it to Achter along with before. This can be a good question to ask
the message: “please confirm flax contract”. prior to selling in a new crop year as well.
Achter then texted back “ý”. Achter failed • If you are conducting a sale with an elevator
to deliver the flax and Southwest sued but delivering your grain elsewhere (i.e., an
Achter for damages. oilseed crusher), be aware that the delivery
point may have different quality specifications
than the elevator. Asking about this beforehand
In this circumstance, Southwest and Achter can be helpful especially if you have not
had established a pattern of offer and delivered to the third-party location before.
acceptance in their previous dealings. • Compare contracts from different buyers.
Southwest would send a picture of an Terms differ depending on the type of contract,
agreement by text and ask Achter to confirm company, and crop. Contracts exist that contain
the terms and Achter provided short protections for both farmers and buyers.
responses such as “looks good”, “yup” or • Standard terms within a contract will include
“ok”. The parties would then treat this as a tonnage price, grade, and commercial
contract and the grain would be delivered specifications (to meet end use requirements).
and paid for each time. The Court applied Commercial specifications are often quality
determinants required in addition to Canadian
the reasonable bystander test and found
Grain Commission standards for grading and
that a reasonable person would have found
will be noted in a separate clause within
that Achter’s emoji response was a proper
your grain contract.
acceptance to from a valid contract. ä • Review each contract you sign, as terms and
conditions may change. This is particularly

GRAIN MARKETING GUIDE

6
 ASK YOURSELF

important at the start of a new crop year or

Are there any terms that
require clarification? ä ?
when selling to a new buyer.
• Have the buyer and you initial any change the buyer, indicating that both parties agree to
made to contract language. their respective contractual requirements.
Language indicating that the seller has read
READ AND UNDERSTAND THE and understands the terms and conditions
ENTIRE CONTRACT effectively places responsibility on the farmer
Faced with the daily challenges of managing a and strengthens the grain company’s legal
farm, many farmers do not take the time to read position should a dispute arise.
the whole contract.
Terms and conditions differ depending on
It is vital to read and understand the entire
contract type, crop, and company. Terms can
contract, including its terms and conditions to
change without notice; therefore, regular review
fully understand your contractual obligations to
is recommended.
prevent any misunderstandings. Grain contracts
require a consenting signature by the seller and
A two-part contract can cause confusion if
the terms and conditions are signed in advance
and applied to subsequent contracts
DEAL WITH REPUTABLE executed during the crop year or in the next
BUYERS
Dealing with licensed grain
companies minimizes your payment risk.
i crop year. By signing the sales portion of the
contract, the farmer may be agreeing to
larger terms and conditions.
In Ontario, Agricorp’s Grain Financial
If you have unresolved concerns, clarify any
Protection Program protects producers
questions you have or seek a second opinion.
who sell grains and oilseeds to licensed Third-party advice or a legal opinion may be
dealers and producers or owners who store warranted.
grains and oilseeds at licensed elevators.
The program has both a licensing and Grain Farmers of Ontario does not provide legal
inspection component and a financial advice or interpretation of grain contracts. ä
protection component. Farmers should
exercise additional due diligence such as
researching the company beforehand and ASK YOURSELF
ensuring immediate payment.

A complete list of licensees is available at

Are the elements discussed
correctly written into the
contract (crop type and class, price,
?
www.agricorp.com/en-ca/Programs/GFPP/ quantity, quality, delivery window, and
Pages/CheckLicence.aspx. ä location)? ä

Sample Clause: Entire agreement clauses

“Each contract, including these Terms and Conditions, is the entire “The contract contains all of the terms of the contract between the
agreement between the Buyer and the Seller for the delivery of parties hereto and no representations of The Company or any
grain specified in the Contract, and replaces all prior discussions, agent of The Company shall be binding upon The Company unless
representations, agreements, and understandings. A Contract may the terms thereof are contained herein.”
not be amended unless the parties agree in writing.”

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN FARMERS OF ONTARIO

7
Variations in quantity and quality
IMPLICATIONS OF GRADE AND determine potential alternatives, and understand
VOLUME DIFFERENTIAL the financial consequences should you not be able
The grain’s title and interest typically remain to deliver or meet the specified quality parameters.
with the farmer until it has been delivered to Farmers should confirm if these details have
and accepted by the grain buyer. The farmer is changed prior to making their delivery. ä
fully responsible for any loss or damage to the
grain until this time. The premise behind this is
that the person in control of the grain is best
positioned to ensure it remains in proper condition. UNDERSTANDING YOUR
To this end, once ownership is transferred, the
farmer no longer has a right to the grain with
some contracts specifically noting that any
GRAIN QUALITY
Knowing your grain’s quality
prior to sale and delivery is
i
screenings, dockage, or foreign material are a core element of your marketing plan.
owned by the grain company. This knowledge helps you in your
Grain buyers are only obliged to accept the grade negotiations, provides confidence when
and quantity written into a contract. Acceptance asking for a second opinion, and helps
of a grade not specified in the contract is at maximize the value of your entire crop,
their sole discretion and subject to trade particularly if quality varies by field.
discounts and/or other penalties. While not The Canadian Grain Commission Harvest
always specified in the contract, the company’s Sample Program provides a free, unofficial
schedule of discounts may apply upon delivery, grade, as well as dockage, falling number
as specific penalties for grading can change
based on market conditions. in wheat, and oil and protein for oilseeds,
pulses, and cereals. Sign up at
Damages may also be assessed for deliveries www.grainscanada.gc.ca to receive a
of lesser quantities. (See section on defaults and sampling kit. Private testing labs can
contract cancellation.) also be an option for farmers seeking a
quick assessment of their grain quality.
Prior to making an agreement, it is important
to ask about how differences will be managed, Grain Farmers of Ontario’s wheat harvest
survey also posts weekly insights into
regional quality results throughout the
ASK THE BUYER
How will any discounts be
calculated? Is the schedule of
discounts available? ä
? harvest so you can compare your wheat
quality to regional averages. Reports can be
found at www.gfo.ca/market-development/
exporters/ontario-wheat-quality/. ä

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 ASK THE BUYER

BE FAMILIAR WITH THE GRADING

In addition to those outlined in
the Official Grain Grading Guide,
are there quality parameters required to
?
PROCESS AND QUALITY PARAMETERS fulfill the contract (i.e., moisture, falling
Grain grading is based on the Canadian Grain number, mycotoxins)?
Commission (CGC) Official Grain Grading Guide.
In addition to the Guide, additional quality Are recommendations in place to uphold
parameters (i.e., falling number, moisture, oil) Canada’s market access relating to crop
are increasingly applied and may be stipulated input products and varieties?
in the contract depending on the end-use
requirements and contract type. These fall How will a dispute over grade be handled? ä

outside CGC farmer protections and are not

subject to Commission oversight.

Contracts may also contain language to ensure who will determine the grade and what
that: the grain is safe for consumption and is implications a grade differential will have on
unadulterated; no moisture has been added; delivery and price. A good understanding of the
pesticides used are registered under Health Official Grain Grading Guide, testing protocols,
Canada’s Pest Control Products Act and applied and your rights as a farmer is beneficial.
according to label requirements; the variety used
is registered in Canada; and the grain does not If you do not agree with the assessment, ask
contain varieties or traits not approved in for a second opinion. In the event of a grading
Canada’s key export markets. dispute, farmers can refer to the Code of Practice
for trade in barley, canola, corn, oats and
Grading is the most common area of wheat in Ontario and the Agreement for the
disagreement between farmers and grain
companies. Farmers should fully understand

Sample Clause: Accepting grain

“Title to and risk of loss of any or all of the Crop will remain with “If Buyer accepts any Commodity not meeting contract grade or
the Seller until the Crop is delivered and accepted by the Company.” quality, destination discounts and premiums at time of delivery will
apply, unless otherwise specified in writing.”
“The Buyer, may at its sole and exclusive option, offer to accept
the grain having a Grade, Protein and other Specification outside “If the Grain grades lower than the Grade specified in the Contract,
the requirements specified in this Contract at a price determined then the Producer shall be in default of his obligations under this
by the Buyer in its sole discretion.” contract and the provisions respecting liquidated damages shall apply.”

Sample Clause: Available recourse and additional quality requirements

“If the Seller does not accept the Company’s determination of grade, other contaminants, and the Seller has not distributed the Grain on
the Company will submit a representative sample of the crop to the delivery in such as a way to make sampling of the Grain
Chief Grain Inspector, Canadian Grain Commission (“CGC”), whose non-representable.”
decision will be final and binding.”
“The Customer warrants that in growing the commodity sold to the
“If the Seller does not accept the Company’s determination of grade, Buyer hereunder, Customer has only used pesticides that: (i) are
the Company will submit a representative sample of the crop to lawfully registered under the Pest Control Products Act, (ii) are
(named) third party lab for independent assessment, whose decision approved for use in Major Export Markets, and (iii) were applied
will be final and binding.” in strict compliance with the procedures recommended by the
manufacturer of the pesticide, the Pest Management Regulatory Agency
“The Seller has not mispresented the Grain, nor the delivery of the and as permitted by relevant authorities in Major Export Markets.”
Grain to the Buyer in any way, the Seller has not added moisture or

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN FARMERS OF ONTARIO

9
 KNOW YOUR GRADE
Grade and dockage directly
affect a farmer’s bottom line.
Understanding the processes for
i you assert that the specifications and conditions
representative sampling, cleaning, and are met, and the grain buyer can hold you liable
assessing dockage, and grading will help for any breach intentional or unintentional for
you follow along and have confidence in any damages that occur. As with contracts, a
the outcome. signed declaration may apply for the duration
of the crop year or as updated or replaced by
Farmers should ask beforehand how any the grain company.
grading and dockage dispute will be handled
and your contract may address such Under the Canada-United States-Mexico
situations. ä Agreement (CUSMA), for crops subject to variety
registration, declaring the variety being delivered
is eligible for use in Canada is now a legal
Marketing of the Ontario Soybean Crop (see requirement. The Canada Grain Regulations
Appendix 3 and Appendix 4). These documents were changed to allow for U.S. grain to receive
provide a framework for farmers and customers to an official grade while maintaining our grain
resolve the dispute and access a second opinion. ä quality and safety system.

DELIVERY DECLARATIONS As of August 2021, to protect the variety

Declarations at delivery are common and form registration system, all deliveries of grains
part of your grain contract. They have evolved subject to variety registration to licensed grain
over the years from declaring wheat varieties buyers must be accompanied by a declaration
to include other grains and specifications such attesting that the variety grown is registered
as language stating that crop protection products in Canada (see Appendix 1). In Ontario, this
were used according to the registered label, or includes barley, oats, and wheat. Corn and
Plant Breeders’ Rights were respected. By signing, soybeans do not require this declaration.

Eligible varieties are registered by the Canadian

Food Inspection Agency as eligible for the crop
kind. Wheat, barley, and flaxseed must also be
assigned to a class by the Canadian Grain
Commission. For crops subject to variety
registration, an unregistered variety is only
eligible for the lowest grade in any class and may
be in default of your contract obligations. ä

Sample Clause: Delivery declaration

“If I, or anyone on my behalf, deliver(s) to the Grain Handling Company me to be in default of my contract and may cancel any contracts
and/or the Grain Buyer grain that does not comply with [declarations between myself and the Grain Buyer.”
required by Grain Handling Company], I acknowledge that I will be
liable to the Grain Buyer, and agree to indemnify and hold harmless “This Declaration is made and intended to apply to all deliveries of
Grain Handling Company and/or Grain Buyer from and against any grain made by me or on my behalf to the Grain Handling Company
and all loss, cost, damage, expense (including legal fees) or penalty from and including the date indicated below until the end of the
that it may incur by reason of my non-compliance with this Declaration. 2022 — 2023 crop year.”
I further acknowledge and agree that the Grain Buyer may consider

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN MARKETING GUIDE

10
 Canada’s grain integrity
WE ALL HAVE a role to play in maintaining the
integrity of Canadian grain and upholding our
FOLLOW THESE
reputation as a high-quality global supplier.
Practices on the farm must meet the regulatory
requirements of our export markets. Practices
ADDITIONAL PRACTICES
• Only use pesticides
registered for use and do not create
i
on an individual farm can impact and jeopardize
a market-access risk. Follow label
market access.
requirements to ensure safe application
and compliance with maximum residue
Under the Canada Grains Act, Canadian Grain
limits.
Commission (CGC) licensed elevators (including
• Use best management practices to
terminal elevators) are prohibited from receiving
address disease pressures.
or discharging grains that contain any injurious,
• Maintain the quality of stored grain.
noxious or troublesome insect or animal pest.
• Only deliver registered varieties for
This may be a particular concern with old crop
crops subject to variety registration
carryover that has been stored. To ensure grain
(barley, oats, and wheat). A declaration
deliveries are not subject to rejection, it is
of eligibility is legally required at
important bins are clean and grain protectants
primary and process elevators and a
are employed at harvest. If you suspect an
false declaration is considered an offense.
infestation in your grain and on-farm fumigation
is required, members can contact a pest
Visit www.gfo.ca/marketing/ for advice
management service.
on how to ensure your grains are
market ready. ä
The CGC regularly inspects terminal elevator
facilities to ensure proper sanitation standards.

Other Canadian legislation and regulations

govern pesticide use and maximum residue
limits, eligible varieties, and grain safety. ä

GRAIN FARMERS OF ONTARIO

11
Delivery terms
BE AWARE OF THE DELIVERY TERMS Farmers should be aware of the terms,
Each contract outlines delivery terms and sets understand how they impact delivery, and make
a delivery period and location. The original contingency plans should they change.
delivery period varies by grain buyer and contract Contracts allow for extended delivery periods,
but is generally a specific month. The delivery and some allow the grain company to change
requirements also vary between companies. In the delivery location. Be mindful that a fee
some contracts, the company will call for delivery, may be charged by the buyer if the grain is
while in others the farmer must schedule a not delivered when called for during the
delivery date within the contract period. Contracts delivery period or the delivery period may be
may also provide the grain buyer the option to extended indefinitely. ä
call for all the contracted grain at once or in parts
throughout the delivery period.

DELIVERY EXTENSIONS
Delivery flexibility provides
grain buyers the ability to
manage market and supply chain risk.
i
Designating an alternative location allows
companies that have the facilities to move
grain to market faster while upholding
their contract delivery commitments. The
ability to change the delivery month is
reflective of the larger marketplace and
is built into contracts to provide flexibility
for moving grain to port and/or to account
for barriers along the supply chain. ä

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12
 ASK THE BUYER

PREPARE FOR AN EXTENDED

What delivery terms apply to
the contract? ?
DELIVERY PERIOD Will full or partial deliveries be expected?
The option to extend the delivery period is a
common grain contract feature. If a grain buyer How far is the alternate location? ä
cannot accept the contracted grain, for whatever
reason, by the end of the original delivery
period, contract language provides the option
of extension. The terms and length vary by Depending on the contract, the delivery period
company ranging from 30 to 180 days with an may automatically be extended without the
average of 90. However, if the grain is not requirement to provide prior notice to the farmer.
accepted after the extension, some contracts
may further allow the delivery period to be As such, farmers should be prepared to deliver
extended while others provide the farmer the within both the original and extended delivery
option to cancel the contract or reschedule. period and be available should an additional
extension be required. If you are unable to
deliver past the initial period, talk to the grain
buyer about making changes, look for contracts
with shorter extensions, or arrange for alternate
delivery terms. ä

Sample Clause: Delivery terms

“Seller will deliver to Buyer the Product, in the Quantity specified “Buyer may schedule deliveries of the Commodity by Seller to suit
and meeting the other quality parameters set-out in this Contract, the availability of appropriate storage and cleaning facilities.”
upon demand by Buyer at any time during the Delivery Period,
and in any event, by no later than the last business day of the “The Buyer may call for all the Grain under a Contract to be delivered
Delivery Period.” on one Delivery Date, or any part of the Grain to be delivered on
different Delivery Dates, in the Delivery Period.”

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN FARMERS OF ONTARIO

13
ASK THE BUYER
How will I be notified of a
change in delivery location or
period?
?
What compensation exists should the
delivery location be changed, or the
period be extended?

What, if any, alternatives exist should the

delivery period be extended? ä

Sample Clause: Delivery changes - location and period

“If the buyer gives 24-hour notice to the Seller, the Buyer may change without penalty and to designate an alternative location for delivery,
the delivery point and shall then be liable for any resulting increases as agreed upon by the parties.”
in applicable delivery charges based on prevailing commercial
hauling rates; and if the Buyer gives at least 24-hour notice to the “Except as expressly stated herein, Buyer shall not be liable in any
Seller, the Buyer may, at its expense, arrange for pick-up of the Grain respect for failure or delay in the fulfillment or performance of
on the Seller’s land or at the place where it is stored.” this contract if hindered or prevented, directly or indirectly, by war,
national emergency, inadequate transportation facilities, inability
“If the Buyer is unable to take delivery of the Crop at the Crop to secure fuel or power, fire, flood, windstorm or other acts of God,
Delivery Location before the end of the Delivery Period, the Buyer strikes, lockouts or other labour disturbances, embargos, orders,
may, at its option, designate an alternate crop delivery location, or, or acts of any government or governmental agency or authority,
without notice, extend the Delivery Period by a period but not to accidents to machinery, or any cause of like or different kind beyond
exceed 180 days.” Buyer’s reasonable control. However, notwithstanding this provision,
the Buyer shall have an additional 90 days beyond the expiry of
“The Company will have the option, if the Company cannot take the Delivery Period to call for a delivery of the Commodity
delivery of any or all of the Crop within the Delivery Period, to without penalty.”
automatically extend the Delivery Period for a period of one month,

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN MARKETING GUIDE

14
 Access to land
RECOGNIZE THAT YOU may be granting the picking up grain. While a time frame or notice
grain buyer access to your land. Some contracts requirement is not always indicated, the use
grant the buyer the right to access the farmer’s of the term “reasonable” implies that logical
land for certain purposes. The reason is stated behaviour and sound judgement should be
in the contract and, while it differs by company, exercised by the buyer. ä
is largely for sampling and testing purposes or

Sample Clause: Access to land

“If the Customer is unable or otherwise fails to deliver, the Company “The Seller authorizes the Buyer and its representatives to enter the
at its option may take delivery on the Customer’s land, in which land or place where the Grain is planted or stored at any reasonable
case the Customer grants rights to ingress, access and egress, and times for the purpose of inspecting any seed or the Grain, taking
the cost of such delivery shall be based on prevailing commercial samples of the Grain or picking up the Grain.”
hauling rates and will be charged to the Customer.”

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN FARMERS OF ONTARIO

15
Defaults and contract cancellations
NOTIFY YOUR GRAIN COMPANY KNOW YOUR OPTIONS
Speak to your grain company as soon as you When facing a default, here are some solutions
are aware of a shortfall or production failure. to consider and discuss with the grain company:
In most contracts, the farmer is contractually • Negotiate a reduction in the administration
obligated to notify the grain company if they are fee and/or liquidated damages.
unable to deliver or believe they will fall short • Buy grain from a neighbour to deliver against
in meeting the quantity or quality agreed to in the contract.
the contract. • Assign, with permission, the contract to
another farmer.
Open, proactive communication is key to your • Assess how contract buyouts impact
relationship with the grain company and an AgriStability and/or crop insurance payments.
important component of effectively fulfilling • Roll delivery to the next crop year when
the contract obligations. Beyond that, there you expect to have more available
are likely other farmers facing a similar situation. production. ä
So being the first to come in and discuss your
options means there is a better chance of
negotiating a workable solution.

Sample Clause: Production shortfalls

“The Seller is absolutely and unconditionally required to sell and “Any notice given under this Contract must be in writing and may be
deliver the Grain of the Grade and Specifications as specified in given by personal delivery, prepaid registered mail, or facsimile
the Contract, whether the Grain is grown or not. The Seller shall transmission.”
notify the Buyer immediately if the Seller knows or believes that
the Seller will be unable to deliver all or part of the grain.”

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN MARKETING GUIDE

16
 ASK THE BUYER

UNDERSTAND THE OBLIGATIONS

How will liquidated damages be
calculated? ä ?
AND RISKS FOR NOT DELIVERING
AGAINST THE CONTRACT
It is important to understand your obligations grain at the bid price reported by the buyer.
and risks for not delivering against the contract, If applicable, an administration fee may be
because the liquidated damages and interest charged.
can be significant.
In rare cases, the contract may contain language
Contracts possess a liquidated damage clause that requires the grain buyer to pay liquidated
if the farmer is found in default (i.e., grain not damages to the farmer should the company
delivered or of lesser grade and quantity). The default. These are linked to the price differential
terms and conditions lay out what the damages between the contracted and replacement price,
will be and how they will be calculated. The so depending on the market may not make
amount must be a “genuine pre-estimate” of sense to exercise. ä
the cost to the company to terminate the contract.
They vary substantially between contract types
and by company. Depending on the contract,
the formula is normally the difference between
the contract price and the replacement cost,
plus an administration fee and any additional
losses the company may incur. Additionally,
most companies charge interest (similar to credit
card interest) on the amount owing.

If your contract does not stipulate the process for

collecting damages, ask the company in advance
how damage will be assessed. Remember any USING THE FUTURES
communication should be in writing.

Review terms from the various grain buyers to

MARKET FOR PRICE
RISK
When you sign a contract, the company
i
determine which is best for you. A conversation you contract with either sells the futures
may be warranted on how the company or the cash commodity. If you come up
calculates the price portion of the formula and short on your obligations, so will the
what steps can be taken to mitigate the damages. company. If the market has risen since
Additionally, a default may adversely affect you signed the contract, there will be a
future business relationships with the grain cost to the grain company to either replace
buyer or any dealings with their crop inputs the grain it expected to get from you or
business if that affiliation exists. buy itself out of its futures position. The
liquidated damages incorporated in the
Replacement costs can be based on the cost to contract are partly designed to cover this
replace the commodity at the delivery point or cost. Alternatively, a farmer can also
an alternative location, the cost to buy out a participate in the futures market to manage
hedged position, the cost to replace the grain in price and contract risk. ä
the marketplace, the cost of any higher current
market price and the value of the undelivered

GRAIN FARMERS OF ONTARIO

17
Sample Clause: Liquidated damages
“If Seller fails to deliver any or all of the Product, or perform any interest on all amounts calculated at a rate of 3% (the “Interest
of its other obligations in this Contract, Buyer will give notice to Rate” from the date of the Default to the date of payment unless
Seller and Seller will pay to Buyer on demand damages to compensate otherwise agreed to by the Parties).”
Buyer for its loss, equal to: (a) the difference between the Price
for the Product and the cost to Buyer (based on current market “The Company will give notice to the Seller and the Seller will pay
price), if higher, of buying replacement grain of equivalent quality; to the Company on demand: (a) liquidated damages (which are
and (b) all other losses, damages, costs and expenses (including agreed to be a genuine pre-estimate of actual damages and not a
without limitation legal fees) suffered or incurred by Buyer as a penalty) equal to the difference between the Price for the Crop and
result of or in any way resulting from Seller’s default. Seller and the amount, if higher, of either of (i) all costs incurred by Company
Buyer agree that liquidated damages determined in this manner in buying out its hedged position for the Crop on the commodity
are reasonable and are a genuine pre-estimate of the actual exchange or (ii) the cost of buying replacement or similar grain
damages Buyer will incur as a result of the default by Seller, and in the marketplace; (b) all other losses, damages, costs and expenses
that such damages are not a penalty.” (including legal fees on a solicitor and client basis) suffered or
incurred by the Company as a result of or in any way arising from
“Buyer, when so notified or upon such determination, shall by the the Seller’s failure; and (c) if the Seller does not pay the foregoing
close of the next business day elect either to: (a) agree with Seller charges by the last business day of the month following the date
to extend the time for delivery, or (b) after having given notice to of the Company’s notice/invoice to the Seller, interest on the
Seller to complete the contract buy-in for Seller’s account the outstanding balance calculated at the rate of 1.75% per month,
defaulted portion of the contract, or (c) after having given notice compounded monthly (23.15% per annum), to the date of payment.”
to Seller to complete the contract, cancel the defaulted portion of
the contract at the difference between the contracted price and the “In the event of a default, The Buyer at its options may: (1) terminate
replacement cost, plus an administration fee of $10 per metric tonne.” the agreement without further obligation; (2) purchase a substitution
for the goods on the open market for Seller’s Account, and Seller
“The Defaulting Party shall pay to the other party without delay: will pay Buyer any loss and incidental expenses resulting there from;
(i) liquidated damages (which damages are agreed to be a genuine (3) require seller to pay the difference between the agreement price
pre-estimate of actual damages and not a penalty) equal to the and the market price on the date of termination; and/or (4) terminate
excess of loss of cost or value under s. 7( c) [buy or sell its hedged any or all other contracts in existence between Buyer and Seller
position, buy grain similar to the undelivered Grain or sell the Grain whether or not seller may otherwise be in default thereunder.
in the marketplace, or value the undelivered Grain at the bid price Notwithstanding the foregoing, Buyer may pursue any remedy
reported by the Buyer] compared to the price for the undelivered allowed by law, and buyer will be entitled to collect from Seller
grain; (ii) legal fees incurred as a result of the Default; (iii) where reasonable attorney’s fees and costs incurred by Buyer in connection
the Seller is the Defaulting Party, an administration fee equal to with the enforcement of this contract.”
$15 per net metric tonnes of undelivered Grain; and (iv) simple

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN MARKETING GUIDE

18
 ASK THE BUYER

DETERMINE THE PROCESS TO

What is the process to
terminate a contract? ?
CANCEL A CONTRACT Will a contract default impact other
Once signed, the outlined terms are binding and, business dealings or open contracts? ä
in most cases, the contract cannot be cancelled
without buying it out. Delivery contracts can
be terminated at any time providing you are
willing to pay the damages and the buyer
agrees to the termination. It is important to are followed (should they exist). Once the grain
note that the ability to do so applies to both buyer is duly notified, the company’s requirement
parties, and common law governs how both to mitigate their damages begins (i.e., source
parties are treated. other grain or wind down a hedge). Note this
generally means that they can not make or
Some contracts contain terms specific to allow the situation to become worse. ä
cancellation. Their use is limited to specific
circumstances, such as the company’s inability
to accept delivery within the initial and extended
delivery periods or related to locking in price.
Familiarize yourself with any cancellation clauses
in the contract to understand when either party
is considered at default and the grain company’s
process to terminate a contract.

Before deciding to cancel a contract, it is

important to fully assess your production
situation and make the decisions that best work
RELATIONSHIPS ARE KEY
for your farm. Be careful in cancelling a contract
as cancellation may impact other open contracts
that exist with the company or its affiliates.
Grain marketing is rooted in
relationships. Maintain good
relationships and open communication
i
with your grain company representative
A contract should be cancelled in writing. The
before and throughout the life of the
notice should be clear, detailed, and
contract. A good relationship is key when
unambiguous, creating a record and date for
negotiating reasonable changes to contract
which damages are to be calculated. Care
terms or potential alternatives should an
should be taken to ensure that any
issue arise. ä
notification procedures set forth in a contract

Sample Clause: Cancellation

“If Buyer has not demanded delivery of the commodity and the Buyer “In the event of a default, The Buyer at its options may … terminate
is unable to receive the commodity at the end of the 90 Day any or all other contracts in existence between Buyer and Seller or
Extended Delivery, the Seller shall have the option of (i) terminating the seller may otherwise be in default thereunder.”
the contract and paying (receiving) any increase (decrease) between
the contract price and Buyer’s current bid, or (ii) delivering at a
later time at the contract price at a date to be agreed upon by the
Seller and the Buyer.”

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN FARMERS OF ONTARIO

19
 ASK THE BUYER
How are Acts of God or
instances of Force Majeure
treated? ä
?
DISCUSS HOW ACTS OF GOD OR FORCE
MAJEURE EVENTS WILL BE TREATED
Act of God or force majeure clauses that benefit Shop around to determine your options. Act of
the farmer are rare in delivery contracts. The God or force majeure clauses may be available
farmer is primarily responsible to deliver against at a premium, upon consent of the grain buyer,
the contract or to pay damages regardless of or with specialty crops and production contracts.
weather-related circumstances. When language When included, pay special attention to the
is included, it generally benefits the grain buyer circumstances and process to invoke such a
and allows them to suspend or cancel the clause and who ultimately decides if a
contract in the event of circumstances outside catastrophic event has occurred. ä
their control.

Sample Clause: Crop failure

“The Seller shall be fully liable for any failure to deliver the Grain “Neither party shall be liable for delay in performance or failure
or any other default or failure to perform its obligations under a to perform when such delay or failure is due to unforeseen cause
Contract due to any cause whatsoever, whether beyond the Seller’s beyond its reasonable control and without its fault or negligence,
control or not.” including but not limited to acts of god or the public enemy,
governmental action or whatever variety, fires, floods, earthquakes,
“It is understood that the Company will permit cancellations or epidemics, quarantine restrictions, riots, insurrections, freight
other amendments to the Contract only in exceptional cases such embargoes, plant breakdown, rail car shortages, and unusually
as crop failure, and only on such terms as may be agreed to by severe weather.”
the Company.”

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN MARKETING GUIDE

20
 Set-offs and security
RECOGNIZE THAT CONTRACT credit on the crop input side of their business
DEFAULTS MAY AFFECT OTHER or Farm Credit Canada Performing Financing
BUSINESS TRANSACTIONS accounts (if applicable). Alternatively, a collection
Contracts typically contain “set-off” clauses to agency may be used to recoup any damages
authorize the grain buyer to deduct from any owing. Language may also extend to crop
money which the company may owe the seller insurance payments.
at any point in the future. This could also apply
to any affiliated businesses. A set-off allows the Ultimately, the farmer is responsible for paying
company to subtract the amount from another the damages. By signing the contract, you agree
business transaction, such as any money owing to the “Set-off” or alternate collection methods. ä
from a separate grain receipt, cash advance, any

Sample Clause: Set-offs

“Seller authorizes Buyer to set-off and deduct, from amounts owed “The Seller authorizes the Company to set-off and deduct, from
to Seller under this Contract, any amounts owed by Seller to (a) amounts owed to the Seller under this Contract, any amounts owed
Buyer, and/or (b) any of Buyer’s subsidiaries or affiliates, including by the Seller under this contract or otherwise to (a) the Company,
without limitation any amounts owned by Seller due to Seller’s and/or (b) any of the Company’s subsidiaries and affiliates. All amounts
failure to deliver the Product pursuant to this Contract.” to be paid now or later by the Seller to the company must be paid
by the Seller in full without set-off, counterclaim or deduction of
“The Seller assigns to the Buyer all amounts that may become due any kind.”
to the Buyer from production contracts, grain settlements, cash
purchase tickets, cash advances, revenue, crop or feed insurance “Without limiting any other remedies available to the Buyer, this
proceeds, government payment programs or other sources arising Contract is subject to Buyer’s right to set off against any amount
in respect of the Grain. … The Buyer may enforce its rights by any payable to Seller, all amounts owing by the Seller to Buyer, including,
legal means, including by set-off.” without limitation, all amounts owing in respect of any crop inputs
provided by the Buyer and interest at 1.5% per month.”

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN FARMERS OF ONTARIO

21
Transfer of ownership
IT IS COMMON for contracts to contain a clause or the farmer passes away, the contract
that extends the contract obligations to any requirements live on. Furthermore, if the
partners, farming corporations, administrators, contract is signed by a partnership, all partners
heirs, executives, or legal representatives. are liable for any amount owning under a breach
Essentially, if a farm is sold or goes bankrupt, of contract. ä

Sample Clause: Extension of obligation

“This Contract will be binding on and enure to the benefit of the “If the Seller is more than one person, the obligations and liabilities
parties and their respective successors and permitted assigns.” of those persons under each Contract shall be joint and several. …
The Contract shall be binding on the parties and their executors,
administrators, successors or permitted assigns.”

This document is intended for general information and is not presented or intended as legal advice. Sample language is for guidance
only and is provided as an example of common terms and conditions currently or historically included in contracts.

GRAIN MARKETING GUIDE

22
 Farmer compensation
CANADIAN GRAIN COMMISSION is to be paid upon delivery of the outstanding
LICENSED FACILITIES amount or on another date as agreed to by the
There are specific clauses for compensation grain company and the farmer. Compensation
for facilities (e.g., terminals) licensed by the needs to only apply after the initial and extended
Canadian Grain Commission (CGC). delivery periods have ended.

For CGC-licensed facilities, Canada Grain If your contract with a CGC-licensed buyer does
Regulations require all delivery contracts not include compensation, or your buyer refuses
offered by buyers licensed by the Canada Grain to include the required terms, contact the
Commission to include a provision to compensate Canadian Grain Commission. In the event of a
farmers for grain not accepted within the dispute regarding the application or payment
stipulated delivery period. of the penalty, try to first resolve the issue
directly and, if not successful, contact the
The requirement, stemming from the 2014 Fair Commission. Upon written request, the CGC may
Rail for Grain Farmers Act, was introduced to arbitrate or refer the dispute to an arbitrator.
address farmers’ concerns with grain buyers not
accepting their grain according to contract Producer compensation is not a standard
delivery terms. The penalty applies to the crop clause included in Ontario grain contracts at
type and grade indicated in the contract and non-CGC licensed facilities. ä

LICENSED GRAIN
BUYERS
A list of Ontario grain buyers
licensed by the CGC can be found at
i
www.grainscanada.gc.ca/en/licences/lice
nsed-grain-companies/. ä

GRAIN FARMERS OF ONTARIO

23
Financial protection for farmers
THE GRAIN FINANCIAL Protection Program the date specified in a deferred payment.
(GFPP), administered by Agricorp, protects • For basis contracts: Issue a minimum of 60
producers who sell grains and oilseeds to per cent of the market price within required
licensed dealers, and producers or owners who timelines, as per payment arrangement (e.g.,
store grains and oilseeds at licensed elevators deferred, upon delivery, or out of storage).
in Ontario. Producers who sell canola, grain • For deferred payment arrangements:
corn, soybeans, or wheat are assessed a GFPP Provide farmer or owner with written
premium as part of the check-off fee paid at confirmation of any deferred payment
delivery. There is currently no GFPP available arrangements within five trading days of
for the sale of barley and oats. the arrangement date.

Producer responsibilities: For stored crops, farmers should only store

• Sell crops only to licensed dealers. Licenses at licensed elevator operators, ensure a
can be checked on Agricorp’s website at weigh ticket is received for each delivery,
www.agricorp.com/en-ca/Programs/GFPP/ ensure a grain storage receipt signed by the
Pages/CheckLicence.aspx elevator operator showing expiry date,
• Cash your cheques within five banking days charges and other arrangements is received
of the date the cheque is made payable or within 45 trading days of delivery, or within
accept electronic payment if auto deposit five trading days of a request.
is not enabled on your account.
• Notify the chief inspector immediately by If a licensed dealer or elevator does not meet
calling Agricorp at 1-888-247-4999 if your their payment or storage obligations, farmers
dealer fails to meet the required payment or owners may submit a claim to the Grain
timelines. Financial Protection Board to cover a portion
of their loss.
All dealers and elevator operators must make
payments to farmers and owners within Maximum coverage levels vary according to the
specified timelines: length of the deferred payment arrangement.
• Sales upon delivery issued within 10 trading See Appendix 2 for details.
days or by the date specified in a deferred
payment arrangement. Agricorp appoints a chief inspector to issue
• Sales out of storage issued by 2 p.m. on grain licences in Ontario and perform dealer
the fifth trading day after the sale or by and elevator inspections. This is to ensure

GRAIN MARKETING GUIDE

24
that dealers and elevator operators are in
compliance with legislation, that farmers
receive payments for sold crops in a timely
manner, and that farmers and owners
receive their stored crops when requested.

Complaints of non-payment/non-compliance
must be made to the Chief Inspector by the
farmer within 30 days of the infraction.
You can reach the Chief Inspector at
1-888-247-4999. ä

GRAIN FARMERS OF ONTARIO

25
Contract disputes
THE BEST DEFENSE is to establish a positive practice for dispute resolution for producer
business relationship with the grain company deliveries to country or terminal elevators.
and fully understand the buyer and seller This Code applies to trade in barley, canola,
obligations to avoid any dispute. corn, oats, and wheat in Ontario. See Appendix 3
for the complete wording of the Code of Practice.
Grain Farmers of Ontario has developed a Code
of Practice with the Ontario Agri Business Soybeans are covered under the 2022
Association and the Ontario Canola Growers Agreement for the Marketing of the Ontario
Association as a recommendation of best Soybean Crop (see Appendix 4). ä

GRAIN MARKETING GUIDE

26
Appendix 1
DECLARATION OF ELIGIBILITY FOR DELIVERY OF GRAIN

DECLARATION OF ELIGIBILITY FOR DELIVERY OF GRAIN

NAME: ______________________________________________________________________________________

ADDRESS: ___________________________________________________________________________________

I AM THE UNDERSIGNED PRODUCER AND/OR SELLER, AND DO SOLEMNLY DECLARE THAT, unless otherwise
specified by me, the grain to be delivered, or sold by me, or on my behalf is of a variety eligible for the kind of grain and
class (if applicable) declared by me in my dealings with the recipient of this declaration.

This Declaration is made and intended to apply to all deliveries of grain made by me or on my behalf from and including
the date indicated below until the end of the 2021-2022 crop year, or until this Declaration is replaced or withdrawn by my
written notice to the recipient of the grain delivery.

NOTES:

1. This declaration applies to the following grains prescribed under the Canada Grain Act: barley, beans, buckwheat,
canary seed, canola, chick peas, corn, fababeans, flaxseed, lentils, mixed grain, mustard seed, oats, peas, rapeseed,
rye, safflower seed, soybeans, sunflower seed, triticale and wheat. (https://laws-lois.justice.gc.ca/eng/regulations/
C.R.C.,_c._889/ ).
2. Varieties of grain not registered under the Seeds Act for sale in or importation into Canada are only eligible for the
lowest grade in any class (http://www.inspection.gc.ca/active/netapp/regvar/regvar_lookupe.aspx), unless exempted by
Commission Order (https://grainscanada.gc.ca/en/industry/orders/index.html).
3. Varieties of grain not designated to a class under the Canada Grain Act are only eligible for the lowest grade in any
class (https://www.grainscanada.gc.ca/en/grain-quality/variety-lists/), unless exempted by Commission Order
(https://grainscanada.gc.ca/en/industry/orders/index.html).

DATED this _____________day of __________________, __________

________________________________________ ________________________________________
Signature of Declarant Signature of Witness

________________________________________ ________________________________________
Declarant Name Printed Witness Name Printed

________________________________________
Witness Address Printed

GRAIN FARMERS OF ONTARIO

27
Appendix 2
GRAIN FINANCIAL PROTECTION PROGRAM PRODUCER GUIDE

Grain Financial Protection Program

PRODUCER GUIDE

Program overview How it works

The Grain Financial Protection Program protects The following charts outline your responsibilities and
producers who sell grains and oilseeds to licensed those of your dealer or elevator operator.
dealers, and producers or owners who store grains
and oilseeds at licensed elevators. Producers selling crops
All dealers and elevator operators must be licensed
and make payments to producers and owners within Your responsibilities:
specioed timelines. t Sell crops only to licensed dealers.
t Cash your cheques within ove banking days of the
Licensing and inspections for dealers date the cheque is made payable.
and elevators t Notify the chief inspector immediately by calling
Anyone who purchases canola, grain corn, soybeans Agricorp at 1-888-247-4999 if the dealer fails to meet
or wheat from a producer, for any purpose other than the required payment timelines (see below).
personal use, must have a grain dealer licence. Any person
who operates an elevator and stores grain other than You can expect your dealer to:
their own must have a grain elevator operator licence. t Hold and post a valid grain dealer licence in their
Agricorp appoints a chief inspector to issue these establishment.
licences. Agricorp also performs dealer and elevator t Deduct your checkof fees and remit them to the
inspections. These inspections ensure that dealers and appropriate commodity organizations each month.
elevator operators are in compliance with legislation,
that producers receive payments for sold crops in a t Make payments to you within required payment
timely manner and that producers and owners receive timelines (see below).
their stored crops when requested.
This licensing and inspection process is funded by the
Ontario Ministry of Agriculture, Food and Rural Afairs, Payment timelines
by producers through their checkof fees, and by dealers
and elevator operators through their licensing fees. Sales upon delivery
Issued within 10 trading days or by the date specioed
Financial protection for producers in a deferred payment arrangement.
and owners
Producers or owners who sell canola, grain corn, Sales out of storage
soybeans or wheat to licensed dealers, or who store Issued by 2 p.m. on the ofth trading day after the
these crops with licensed elevators, are onancially sale or by the date specioed in a deferred payment
protected if a licensed dealer or elevator does not meet arrangement.
their payment or storage obligations. A share of the
checkof fees that producers pay when they sell their Basis contracts
crops to licensed dealers is put into a fund managed
A minimum of 60 per cent of the market price issued
by the Grain Financial Protection Board. Producers
or owners may submit a claim to the board to cover within required timelines, as per payment arrangement
a portion of their loss. (e.g., deferred, upon delivery or out of storage).

Deferred payment arrangements

Efective July 1, 2015, dealers and elevator operators
Written conormation of any deferred payment
will begin collecting check of fees for oats and
arrangement received from the dealer within ove
barley. These are collected on behalf of the Grain trading days of the arrangement date.
Farmers of Ontario only. There are no onancial
protection funds available to oat and barley growers.

GRAIN MARKETING GUIDE

28
 Producers and owners storing crops Making a claim
Your responsibilities: If your dealer or elevator operator does not meet
t Store crops only at licensed elevator operators. their payment or storage obligations, notify the
t Ensure that you receive weigh tickets for each delivery. chief inspector immediately by calling Agricorp
t Ensure that you receive a grain storage receipt within at 1-888-247-4999. Failure to notify Agricorp
45 trading days of delivery, or within ove trading days promptly could afect your claim eligibility.
of request.
t Ensure that your grain storage receipt is signed by the The following chart shows the maximum coverage for
elevator operator and that it shows the expiry date, producers or owners of canola, grain corn, soybeans or
charges and any other arrangements you made with wheat, according to the length of a deferred payment
the elevator operator. arrangement, if applicable.
t Notify the chief inspector immediately by calling
Agricorp at 1-888-247-4999 if the elevator operator Coverage levels by length of deferred
fails to meet storage obligations. payment arrangement

You can expect your elevator operator to: Maximum

t Hold and post a valid grain elevator operator licence Length of deferral* coverage on
in their establishment. approved claims
t Issue a weigh ticket for each load of grain when you No deferral 95%
deliver the crop.
t Issue grain storage receipts within 45 trading 1 to 45 calendar days 50%
days of orst delivery, or within ove trading days of
46 to 90 calendar days 40%
request. Receipts must be signed by an authorized
representative and show the expiry date, charges 91 to 135 calendar days 30%
and any other arrangements you made.
t Release the grain to you upon request. 136 to 180 calendar days 20%

Over 180 calendar days 0

* Refers to length of deferral after the tenth trading day following
Always deal with licensed dealers and elevator sales on delivery, or after 2 p.m. on the ofth trading day
operators. All licences must be posted. A list of following sales from storage.
licensed grain dealers and elevators is available
on agricorp.com, or you can contact Agricorp
at 1-888-247-4999.

Contact us
1-888-247-4999
Fax: 519-826-4118
TTY: 1-877-275-1380
Accessible formats available
agricorp.com
contact@agricorp.com
(Monday to Friday, 7 a.m. to 5 p.m.)
Version française disponible

The Grain Financial Protection Program is created under the legislative authority of the Grains Act, R.S.O. 1990, c. G.10, as amended and
the Farm Products Payments Act, R.S.O. 1990, c. F.10, as amended, as well as the regulations made thereunder. These can be found on
www.e-laws.gov.on.ca. Where there is any connict between this document and the provisions speciocally set out in the legislation, the
legislation takes precedence. Errors and omissions excepted.

2019-07-08

GRAIN FARMERS OF ONTARIO

29
Appendix 3
CODE OF PRACTICE FOR TRADE IN BARLEY, CANOLA, CORN, OATS, AND
WHEAT IN ONTARIO.

Code of Practice

for trade in barley, canola, corn, oats, and wheat in Ontario

Producer deliveries to country or terminal elevators

This code was developed by Grain Farmers of Ontario, the Ontario Agri Business Association,

and the Ontario Canola Growers Association as a recommendation of best practice for

dispute resolution.

1 The holder of a license as an elevator operator and/or dealer agrees to abide by the Code of Practice

for trade in barley, canola, corn, oats, and wheat (the “identified commodities”) in Ontario;

2 The Code of Practice must be posted at each licensed operation in such a location that a producer

or producer’s agent will be able to read the Code of Practice prior to unloading of the identified

commodities. Additionally, it is recommended that the operation publishes this document online

where relevant.

All of the identified commodities shall be inspected on the basis of the grades

established under the Canada Grain Act. NOTE

NO
NOTE
TE

For other quality commercial

Every elevator and operator shall have the necessary equipment, calibration charts specifications outside of CGC grade

and trained personnel to ensure results are consistent with the standards set by standards (e.g. falling number and DON),

the Canadian Grain Commission (CGC). Such equipment must be calibrated/ agreed contract terms will prevail. If

checked at least annually. testing is conducted by the elevator

operator at the time of delivery and the

Any person delivering the identified commodities on behalf of a producer is deemed delivery agent wishes to initiate a

to be the agent of that producer and is authorized to act on their behalf. dispute, a sample can be sent to a third

party for assessment and the dispute

Upon request, the producer or agent shall be advised of the grade, dockage, condition,
resolution process followed.
and moisture assigned to the load prior to unloading. All grade disputes shall be

initiated within 24 hours of delivery.

The parties should utilize all reasonable

efforts to resolve the dispute promptly

A sample shall be taken at the time of delivery and retained for a period of 24 hours.
and in good faith. Failing any of the
When a sample is taken, all parties shall accept the sample as fair and representative
above, the parties may agree to submit
of the load from which it is taken. If a dispute is initiated, the sample shall be sent
the dispute to mediation and if that is
to an agreed upon third-party independent lab or the CGC for analysis. The sample
unsuccessful within a prescribed time,
submitted to the inspection service shall be no less than 1 kilogram in weight.
the parties may agree to proceed

further to arbitration.
All testing and inspection results for the purposes of assessing/assigning grade,

dockage, condition, and/or moisture shall be accepted as final. In accordance with

Soybeans are covered under the 2022
the agreement (Grain Farmers of Ontario; Ontario Agri Business Association; Ontario
Agreement for the Marketing of the
Canola Growers), costs for forwarding representative samples to the third-party
Ontario Soybean Crop.
assessor shall be shared equally between the producer and elevator operator.

However, fees associated with the testing and inspection of samples shall be the

responsibility of the party found to be in error.

GRAIN MARKETING GUIDE

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Appendix 4
AGREEMENT FOR THE MARKETING OF THE ONTARIO SOYBEAN CROP

2022 Agreement

for the marketing of the Ontario soybean crop

In 2016, OABA, Grain Farmers of Ontario and the two major soybean processors negotiated a new

Soybean Marketing Agreement which allows for market forces to dictate costs associated with drying

and handling of soybeans. The Agreement reads as follows:

1. (1) Under the terms of this agreement, cleaning and handling charges, as well as soybean drying charges/moisture

discounts will be agreed upon by the dealer and the producer through competitive market forces, similar to the corn

and wheat markets.

(2) These terms and conditions should be confirmed prior to producer delivery.

(3) Settlements and payment protocol shall follow in accordance to the Grains Act (Ontario Regulation 260/97) and

the Farm Products Payments Act (Ontario Regulation 70/12).

2. (1) Where there is an agreement between a soybean producer and a licensed buyer, terms may be established which

differ from those stated within this agreement.

(2) In order to meet the specialized needs of a diverse and demanding marketplace for Ontario soybeans, all parties

recognize and agree that the specifications in such producer/buyer agreements will take precedence over the

Ontario Soybean Marketing Agreement except as otherwise required by the Regulations under the Grains Act or

the Farm Products Payments Act

3. (1) In the event there is a dispute as to the grade or moisture content of any load of soybeans, the matters in dispute

shall be referred to an inspector for the Canadian Grain Commission or to such other person as is mutually agreed

between the parties in dispute.

(2) The decision of the inspector under subsection (1) shall be binding on the parties in dispute.

(3) The inspector in making a test shall examine a minimum 1 kg. sample agreed upon by the parties involved and taken

from the load of soybeans delivered and retained in a moisture-proof container bearing a label on which is stated

the name and address of the party delivering the soybeans.

(4) A further sample of the load of soybeans in dispute shall also be kept in a moisture-proof sealed container pending

the inspector’s decision.

(5) Costs for forwarding representative samples to the inspector under subsection (1) shall be shared equally between

the parties to the dispute.

(6) Fees assessed by the inspector under subsection (1) for testing and inspecting such samples for the purpose of

assessing and assigning grade, dockage, condition and/or moisture shall be the responsibility of the party in error.

4. When soybeans are delivered to a dealer’s elevator or place of business, a receipt for each load of soybeans shall be

given by the dealer to the grower, or the party delivering the load of soybeans in the absence of the grower in accordance

with Ontario Regulation 260/97 made under the Grains Act.

5. This agreement comes into effect on September 1, 2016 with an initial term that will expire on the 31st day of August,

2017. Prior to expiry, this Agreement shall automatically renew for successive additional terms of one year, unless any

of the local board, the processors of soybeans or the Grain Section Committee of the Ontario Agri Business Association

provide written notice to the other parties and to the Commission not later than the 31st day of January in the year of

expiry and request that the Agreement to be opened for negotiation, in which case the provisions of O.Reg 485/09

shall apply.

GRAIN FARMERS OF ONTARIO

31
 Grain Farmers of Ontario
679 Southgate Drive Guelph, ON N1G 4S2
Tel: 1-800-265-0550
www.gfo.ca