Free on Board Farm Transaction Policy for Primary and Process Elevators
Terminology
- Free on Board (also known as FOB) is defined as the allocation of rights and duties between a buyer and a seller to pay for transportation of goods and the risk of damage to goods during transportation. Free on Board does not automatically coincide with ownership title transfer from one contractual party to another.
- A Free on Board farm transaction is one where a licensed primary or licensed process elevator arranges for grain to be picked up on a producer’s farm.
Policy elements
This policy applies where a licensed primary or licensed process elevator operator arranges to pick up grain at a producer’s farm for transport to and delivery into the licensed elevator.
- Grain that is bound for a licensee’s own primary elevator or process elevator, regardless of the terms of the grain delivery contract, is a primary or process elevator transaction.
- Licensed primary and licensed process elevators do not require a grain dealer licence for the purpose of picking up grain on farm for transport directly to the facility operated by the licensee.
- Regardless of whether grain is delivered directly into a licensed primary elevator by a producer or picked up on farm by the elevator operator, as per subsection 61(1) of the Canada Grain Act, the elevator operator shall, at the prescribed time and in the prescribed manner, issue an elevator receipt or cash purchase ticket stating the grain name, grade, and dockage, and immediately provide it to the producer.
- Regardless of whether grain is delivered directly into a licensed process elevator by a producer or picked up on farm by the elevator operator, as per subsection 78(2) of the Canada Grain Act, the elevator operator shall, at the prescribed time and in the prescribed manner, issue a grain receipt or cash purchase ticket stating the grain name, grade, and dockage, and immediately provide it to the producer.
Effective July 13, 2023