A new Georgia law will reduce the risks farmers face in doing business with brokers.
Georgia’s fruit, pecan and vegetable crops had a farm gate value of almost $1.5 billion in 2012 according to the UGA College of Agricultural and Environmental Sciences. Unlike row crops that can be stored, there is a small window of opportunity for most of these specialty crops to be harvested, packed, shipped and bought by a consumer.
This is why most fruit and vegetable producers use a broker to market their crops. Brokers play a vital role in getting crops to the consumer from finding markets for crops, to arranging delivery and even supplying some of the input materials needed for production. In the vast majority of cases farmers have benefitted, but in some cases farmers have experienced difficulty getting paid under brokerage arrangements.
“Last year in the 2013 crop year, over $4 million was reported in crops not paid for,” said Jack Spruill, Georgia Department of Agriculture marketing division director. “Farmers shouldn’t have that kind of exposure.”
Georgia House Bill 268 took effect this year. HB 268 was authored by Rep. Buddy Harden (R-District 148) and was supported by Georgia Farm Bureau during the 2013 legislative session. HB 268 strengthens the existing “Dealer in Agricultural Products” law to provide an additional layer of protection for Georgia farmers. This law updates and clarifies existing laws. Any broker doing business in Georgia, must comply with the law. This applies to fruits, vegetables, cotton and pecans. Dairy products, tobacco, grains and eggs are excluded.
There are two main functions of HB 268. The first is a requirement that anyone who buys a product, and does not pay in full with cash, must register annually with the Georgia Department of Agriculture (GDA) and pay a small licensing fee each year. The fees for this annual license start as low as $50. Under the previous law, a broker could get a lifetime license once with no further review. This gave the GDA no recourse as they work to protect the farmer.
The law also provides clear amounts for how much a broker has to be bonded. The minimum bonded amount is $10,000 and the maximum is $230,000, except in the case of pecans, which has a maximum of $500,000.
The “Dealer in Agricultural Products” law does not cover disputes regarding discrepancies in altered prices due to a change in grade. Spruill suggested that farmers should have the Georgia Federal State Inspection Service provide quality assurance before the commodity is shipped.
Farmers who do business with brokers should ask if they are licensed with the GDA prior to entering any contracts.
“If you are dealing with someone who isn’t licensed, the Georgia Department of Agriculture can legally offer no assistance,” Spruill said.
Contact the Georgia Department of Agriculture Bonding Division and manager Johnny Hurst with any questions regarding how to become licensed or to determine if a particular broker is licensed. The website is http://agr.georgia.gov/bonding.aspx and the phone number is 404-656-3725.
Founded in 1937, Georgia Farm Bureau is the state’s largest general farm organization and has 158 county offices. Its volunteer members actively participate in local, state and national activities that promote agriculture awareness to their non-farming neighbors. GFB also has 20 agricultural commodity advisory committees that give the organization input on issues pertinent to the major crops and livestock grown in Georgia.
Source: Georgia Fruit & Vegetable Growers Association
