LITTLE ROCK, AR – In the wake of an Arkansas grain dealer going belly up and rocking the Arkansas agriculture community, lawmakers consider a bill to require licenses for grain dealers operating in the state.
According to lawmakers, two laws already regulate some aspects of grain buying and selling through the federal and state warehouse laws. Sponsors of the say it would cover those who are not covered by those laws and have been essentially unregulated for years.
“It gives us a mechanism to identify those with financial problems,” State Senator Ronald Caldwell, R-Wynne, told the Senate Agriculture Committee on Tuesday.
According to Caldwell, the bill grew out of concerns over Turner Grain’s default on its dealer contracts with farmers across the state. It served as a blueprint, lawmakers say, for how an unregulated industry can cause far-reaching damage.
“We’ve been able to allow certain people to buy and sell grain who are unlicensed and are not on the radar screen,” Caldwell said. “We didn’t want to have a knee-jerk reaction, and we know 99 percent of the transactions going on are legal and in good faith. We’re trying to deal with that one percent that isn’t.”
Some members of the public voiced opposition to the bill, saying it would have unintended consequences or represented more regulation than was necessary.
But Caldwell disagreed, saying the bill requires dealers to be licensed by the state, offer financial documentation and open their books to an audit by the State Plant Board if needed as part of an investigation. The bill would also establish a hotline for farmers to call if their payments are more than 30 days late from an agreed upon pay date.
“This doesn’t give anyone a 30-day pay window,” Caldwell said. “A farmer can contract to be paid on delivery, paid 10 days after or join a pool and watch the market. This just establishes that if 30 days from that agreed date pass, the farmer has a right to call the state to file a complaint.”
Caldwell believes that a database, hotline and enforcement of the rules might help prevent instances like Turner Grain from happening in the future, or at least catch them more quickly when they do occur.
“If we had this during Turner Grain, we would’ve probably identified the problems three and a half years ago,” he said.
The bill passed on a voice vote out of committee. According to Caldwell, there may be additional legislative steps that need to be taken to address other issues with regulation. He said lawmakers were waiting to see what, if any, additions were needed after some further details came out in court regarding Turner Grain.
According to lawmakers, two laws already regulate some aspects of grain buying and selling through the federal and state warehouse laws. Sponsors of the say it would cover those who are not covered by those laws and have been essentially unregulated for years.
“It gives us a mechanism to identify those with financial problems,” State Senator Ronald Caldwell, R-Wynne, told the Senate Agriculture Committee on Tuesday.
According to Caldwell, the bill grew out of concerns over Turner Grain’s default on its dealer contracts with farmers across the state. It served as a blueprint, lawmakers say, for how an unregulated industry can cause far-reaching damage.
“We’ve been able to allow certain people to buy and sell grain who are unlicensed and are not on the radar screen,” Caldwell said. “We didn’t want to have a knee-jerk reaction, and we know 99 percent of the transactions going on are legal and in good faith. We’re trying to deal with that one percent that isn’t.”
Some members of the public voiced opposition to the bill, saying it would have unintended consequences or represented more regulation than was necessary.
But Caldwell disagreed, saying the bill requires dealers to be licensed by the state, offer financial documentation and open their books to an audit by the State Plant Board if needed as part of an investigation. The bill would also establish a hotline for farmers to call if their payments are more than 30 days late from an agreed upon pay date.
“This doesn’t give anyone a 30-day pay window,” Caldwell said. “A farmer can contract to be paid on delivery, paid 10 days after or join a pool and watch the market. This just establishes that if 30 days from that agreed date pass, the farmer has a right to call the state to file a complaint.”
Caldwell believes that a database, hotline and enforcement of the rules might help prevent instances like Turner Grain from happening in the future, or at least catch them more quickly when they do occur.
“If we had this during Turner Grain, we would’ve probably identified the problems three and a half years ago,” he said.
The bill passed on a voice vote out of committee. According to Caldwell, there may be additional legislative steps that need to be taken to address other issues with regulation. He said lawmakers were waiting to see what, if any, additions were needed after some further details came out in court regarding Turner Grain.
