REGINA - The Saskatchewan Association of Rural Municipalities remains concerned about the ongoing drought crisis and the effects felt by Saskatchewan producers.
A release issued Monday stated, “The volume of grain is down, so a lot of farmers simply don't have the grain to meet their commitments on their contracted but undelivered grain. Farmers are now faced with trying to buy back forward priced contracts, which includes penalties and administration fees, on this grain.”
SARM is calling on grain companies to work with farmers to reduce penalties and eliminate administration fees on the contracted but undelivered grain for this year.
“We need the grain companies to work with farmers on this issue,” said SARM President Ray Orb. “A lot of farmers simply don't have the grain this year due to the drought and with no 'Act of God' clause in some of the contracts, prices have continued to climb and the cost to buy out those contracts is now substantially higher.”
The administrative fee is meant to deter growers from trying to get out of a contract when they actually have the physical grain in order to capture a slightly higher price, stated the release. The costs depend on the commodity and the type of contract a farmer has and is variable across the board.
“It is imperative that we stand united in supporting our farmers and SARM remains committed to ensuring a resolve to this issue,” said Orb. “We are urging the Western Grain Elevator Association and its members to work with farmers struggling to pay penalties and administration fees on contracted but undelivered grain.”
