‘Producer First’ bill passes first hurdle

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Farm Forum

PIERRE – A House committee voted on Feb. 14 in favor of putting farmers first in line to receive payments from a grain buyer’s bond if the company goes under. The House Agriculture and Natural Resources Committee voted 8-5 to pass House Bill 1228, a measure introduced in response to the financial collapse of Minnesota-based Anderson Seed Company’s grain facility in Redfield. Five Republicans and three Democrats voted to pass the bill to the House floor. The five nay votes came from Republicans.

“It’s great to see that there is bipartisan support for a common-sense bill that puts producers first in line to be repaid if there is another unfortunate incident like we saw with Anderson Seed Company,” said South Dakota Farmers Union President Doug Sombke, whose group testified in favor of the measure.

The Redfield facility shut down last February, owing an estimated $2.6 million to farmers who had delivered grain to the facility and never got paid. The company had a $100,000 bond, an insurance policy required by law in case of financial insolvency. Farmers who delivered grain and never got paid can make claims on that $100,000 bond, which is less than 4 percent of the total amount owed to producers. Since the company shut down its Redfield facility, 29 claimants have sought money from the bond. Of those, 22 are producers, one is a colony, one a dairy and the other five are non-producers. Those non-producers have requested 40 percent of the bond. This bill would put farmers who produced the grain ahead of non-producers for payments from grain bonds.

“We look forward to continuing this important discussion with members of the House,” Sombke said. “This bill would provide much-needed protection to farmers.”

The bill now moves to the full House for a vote.