Senators consider protections for grain growers

Nebraska grain producers would receive additional protections when seeking payment from grain dealers under a bill heard by the Agriculture Committee Jan. 27.

Introduced by Wahoo Sen. Jerry Johnson, LB183 would reduce grain dealer obligations covered by the dealer’s security, which is money set aside to pay growers who are not paid immediately upon delivery of their product.

The bill would limit the dealer security to cover payment only to growers who sell directly to dealers. The bill would not prevent owners who are not growers from claiming past due payments or grain purchasers from filing claims stemming from dealers’ failure to deliver.

The bill also shortens from 30 to 15 days the time a grower may demand payment from the dealer, attempts payment negotiations with the dealer or notifies the Public Service Commission of an apparent loss. Additionally, the bill removes a requirement that all grain transportation vehicles be registered and issued grain dealer plates.

Johnson said the bill is designed to protect grain producers in cases where grain elevators become insolvent. Decreasing the time during which growers can demand payment from an elevator, he said, alerts the Public Service Commission sooner to potential financial problems.

The commission’s grain department is responsible for the licensing and enforcement of the Grain Dealer Act.

Jerry Vap, chairman of the commission, testified in support of the bill, saying it is important because the grain dealer security is the only recourse for growers when elevator businesses fail.

“We need to protect the producer who asked for but got no payment,” he said.

John Meuret, a Nebraska grain producer, spoke in opposition to the proposal. Although he agreed with most provisions in the bill, he said the dealer security should be used to repay all parties that do business with elevators, not just those selling directly to the dealers.

The committee took no immediate action on the bill.