HOT SPRINGS -- Proposed legislation designed to protect farmers in case a grain buyer fails to pay for their crops worried some growers who attended the Arkansas Farm Bureau's 80th annual conference Thursday.
During one session, Arkansas Agriculture Secretary Butch Calhoun said the draft legislation his office had written to protect farmers could not satisfy everyone's needs.
The legislation would create a grain indemnity fund of $25 million that farmers could voluntarily pay into as an assessment on their crops. Those who pay into the fund would be eligible for payments if a grain buyer failed.
The legislation also would require grain buyers to be bonded, insured and licensed with the Arkansas Plant Board.
Some in attendance said it would be hard for farmers to stomach another assessment on their crops. Others said the assessment wouldn't result in enough monetary protection.
In an interview, Calhoun said he was working to strike a balance and stressed the legislation was in an early draft form. Another draft could come out "in the next few weeks" that would incorporate comments from many stakeholders, he said.
"We've got people out there with pickups, computers and telephones making deals on millions and millions of dollars worth of grain," he said. "All you've got is a piece of paper and they've got your grain and it's on a barge headed to New Orleans."
Ultimately, the problem needs to be addressed, he said. At a minimum, grain buyers should be licensed, bonded and insured, he said.
Calhoun's staff drafted the legislation after Turner Grain Merchandising Inc., a Brinkley-based company, filed for bankruptcy Oct. 23, citing liabilities of more than $24.8 million and $13.8 million in assets.
The $25 million cap was modeled on Turner Grain's failure, but Calhoun said there may be more liabilities related to the bankruptcy, especially at smaller farms that haven't complained.
"I think maybe we've just scratched the surface of what happened," he said.
During the same session, Terry Walker, director of the Plant Industry Division of the state Plant Board, said legislation proposed in the 1990s that might have averted the fallout from Turner Grain's failure didn't pass mainly because of resistance from various companies.
"There was enough resistance to it on the commercial side that it didn't go anywhere," he said. "If we can make this as agreeable as possible ... then that's a win."
In an earlier session, House Speaker-designate Jeremy Gillam, R-Judsonia, said the legislation needs to protect farmers but should not negatively affect those who had done nothing wrong.
"We're trying to make sure we don't take action that negatively impacts a whole bunch of folks while trying to solve the issue that some got wrapped up in," he said. "I think it's something we're going to be able to kind of reach that win-win scenario, but I think at this point right now, I think it's a little too early to kind of predict where that's going to fall."
In addition to grain laws, agriculture leaders debated the proposed state water plan. Edward Swaim, water division manager for the Arkansas Natural Resources Commission, said the commissioners could decide to adopt the plan as soon as Tuesday.
"One thing that there's a fear of now is future reliance on numbers that we developed that would somehow cause a regulation to come into place," he said.
Swaim said the commission was working to continually update the numbers, and no limits on water use had been proposed.
Farmers also are concerned about a proposal that would require a nutrient management plan for anyone spreading poultry litter or manure in Arkansas.
"Anything that makes farming more expensive or more difficult is a concern," Swaim said.
Business on 12/05/2014