Arkansas' U.S. senators, John Boozman and Mark Pryor, on Tuesday filed a bill called the Farmer Flexibility Act of 2014 that could protect farmers who have sold their grain but did not get payment before the buyer filed for bankruptcy.
Payments on principal and interest on all U.S. Department of Agriculture loans would be held in abeyance till 180 days after the disposition of a bankruptcy case, under the bill.
Amy Schlesing, spokesman for Pryor, a Democrat who is facing a challenge in November from Tom Cotton, a Republican member of the House, said that problems with Turner Grain Merchandising in Brinkley, which has failed to pay farmers and others who have sued the firm in several cases, highlighted the vulnerability of farmers.
Any provision under the U.S. Bankruptcy Code would be covered under the bill. Dale Bartlett, a partner in Turner Grain, filed for protection under Chapter 12 of the code. That chapter is designed to help save a farm from liquidation. The bill would apply to any bankrupt buyer of farm commodities.
The USDA previously gave farmers affected by Turner Grain an extra 90 days on paying their crop loans. Arkansas agricultural officials have said that defaults on Turner Grain payments could reach tens of millions of dollars.
The Farmer Flexibility Act would amend the 2014 farm bill. The House is scheduled to leave Oct. 2 and not return until after the Nov. 2 election. The Senate is expected to begin its fall break no later than Sept. 26.
"I've been working with USDA to provide breathing room for our grain producers, and the agency has been responsive to these needs. This bill provides additional relief to protect our grain farmers and mitigate damage to our economy," Pryor said in a news release. "Our grain farmers work too hard to face financial ruin at no fault of their own."
Boozman said in the release that "given that this is the peak season for harvesting, these farmers are taking a major financial hit because of someone else's mistakes. The bill we are introducing is a good faith effort to help affected farmers and give them time to recover."
Randy Veach, Arkansas Farm Bureau president, said: "Arkansas has limited state laws pertaining to grain merchandising, allowing this unfortunate and unprecedented financial tangle."
The state does not require licensing of grain dealers, such as Turner Grain, or require that they post performance bonds.
In a related matter, the USDA is still weighing what to do with the license of Agribusiness Properties LLC, a sister company of Turner Grain. It was suspended on Aug. 14 when USDA agents found no the grain in the Agribusiness elevators, even though there were certificates on the premises saying the grain was there, said Kent Politsch, chief of public affairs for the USDA's Farm Service Agency.
Politsch said Tuesday that the USDA could extend the temporary suspension for another 30 days or revoke it altogether.
Addressing the matter of loans to farmers, Politsch said that a particular USDA loan, for marketing, is especially sensitive for farmers.
Marketing assistance loans must be paid back in nine months from the time they are taken out till the harvest is brought in, Politsch said. But if a farmer has not been paid by then, he is in a bind, which is a major reason for the proposed legislation. Marketing loans allow farmers to buy time for a more-favorable market prices.
Business on 09/17/2014