Production Contract Guide Published

REGINA - May 5/03 - SNS -- The Agriculture Institute of Management in Saskatchewan (AIMS) recently published a guide to farm production contracts which is freely available for downloading from the organization's website -- www.sccd.sk.ca/aims.

"A Farmer's Guide to Production Contracts deals with the legal considerations involved in crop production and delivery contracts. It is extremely easy to read, and will give farmers an excellent base from which to evaluate all production or delivery contracts," says Brian Sim, soils and crops coordinator, Crop Development Branch, Saskatchewan Agriculture, Food and Rural Revitalization in Saskatoon.

The AIMS program manager, Brenda Stefanson of Saskatoon, says farmers and farm groups had been requesting information on contracting and now, with the booklet completed, their feedback on it has been enthusiastically positive. She also emphasizes the fact that, while the booklet was prepared by a Saskatoon law firm, its preparation included collaboration with SAFRR, the University of Saskatchewan, and six Saskatchewan crop-commodity groups.

As stated in the booklet, its purpose is "to answer some of the questions producers have when signing production contracts. It is not a substitute for proper professional advice, but it can help to establish what questions to ask." It also points out the three roles of contracts: to provide certainty, help avoid and settle disputes, and balance risks and rewards. As the booklet emphasizes in regards to the latter, "expect that an advantage in one area will mean getting less in another," a statement illustrated with a real-farm example.

Examples, in fact, predominate in this booklet, and are one of the reasons for its accessibility to lay readers. Legal words and phrases in sample contracts are explained, and the possible consequences of agreeing to them are pointed out. A Farmer's Guide to Production Contracts also offers a short section called "Dangerous clauses," which include evergreen clauses, hidden security interests, illegal terms and unreasonable sampling clauses.

"Farmers sign contracts all the time, which is why AIMS was pleased to contribute. A Farmer's Guide to Production Contracts is only the base; we want to go to the next level. So the collaborative group will continue to work together, with the goal of a second publication providing greater detail and dealing with more issues. We hope to make it available next winter," Stefanson says.

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