Opinions and insights from Roythornes' agriculture team
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If nothing else, there looks like being a bumper crop of contract disputes this year. The difficulties with harvest have been reported on widely (see the BBC's bank holiday coverage) and the quality - particularly of wheat - is variable.
Many grain contracts require the grower to deliver an agreed tonnage at a specific quality even if that means buying product in from elsewhere in the UK to make up any shortfall. Failure to do so will generally mean the buyer going out into the market to find replacement supplies and claiming the additional cost from the grower. With wheat prices rising, that could be an expensive business.
We've commented on how to deal with disputes, or potential disputes, in the Farmers Guardian. The full FG article is here.
Whatever you do, once you've established what your contract - and any arbitration rules - say, follow them to the letter on timings, on where you send notices, on how you respond to claims. That way you won't end up being on the back foot because of purely procedural lapses; the arbitration or negotiation will be about the substance of the claim. It still may not be pretty, but at least you won't have added to everybody's costs (including your own) unnecessarily.
There's some room for negotiation, particularly if the end use of the grain doesn't need specific weights to be at the level set out in the contract. Relationships count for something, but make sure that any deal reached over the 'phone is confirmed in writing.
Get in touch with our experts as soon as possible. We will assess your options and look at how best to minimise your losses or challenge claims.