On May 5, the Senate Commerce Committee approved Senate Bills 899 and 900. The legislation would strengthen Michigan’s Grain Dealer’s Act and Farm Produce Insurance Act should a licensed grain dealer end up insolvent or bankrupt. The bills now await a full Senate vote.
Sponsored by Senators Jim Stamas (R-Midland) and Joe Hune (R-Whitmore Lake), the legislation is aimed at grower payment protection and security. Among other things, the legislation would raise the insurance fund cap from $5 million to $10 million, thus ensuring greater grower protection in case of economic turmoil. The increase was spurred by the Lapeer Grain failure, which reduced the Farm Produce Insurance Fund’s balance to below the $3 million minimum.
Due to the increase in licensed grain dealers’ involvement in farm produce transactions, the legislation would also remove the $1 million ceiling on net allowable assets of grain dealers. It would also reduce the time period for which a producer can file a claim from 24 to 18 months, and, for grain dealer licensing, require that certified public accountants (CPAs) issue documentation stating they recognize the Michigan Department of Agriculture and Rural Development relies on the CPA’s financial statement.