A new Georgia law will help make sure fruit and vegetable growers get fair dealings from brokers.
Unlike row crops that can be stored, there is a small window of opportunity for specialty crops like fruits, vegetables to be harvested, packed, shipped and bought by a consumer. Brokers are key players in helping growers get these crops sold and to consumers. In the vast majority of cases, farmers have benefitted, but that’s not always the case.
“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 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.