The grain harvest is getting under way and the Public Service Commission strongly encourages farmers to ensure they are doing business with licensed and bonded warehouses and grain buyers.
Posted August 23, 2013
Licenses can be verified via the PSC’s web site at www.psc.nd.gov or by calling the PSC at (701)-328-2400.
According to Commissioner Randy Christmann, who holds the portfolio for grain warehouses and grain buyers, “A simple phone call to the PSC can help protect producers. Grain warehouses and grain buyers are required to be licensed and bonded and bond coverage does not exist if a buyer is not licensed.”
Grain sales fall into two categories, cash sales and credit-sale contracts.
Christmann said, “The main tool the Commission has for protecting cash sale farmers in cases of insolvency is our ability to become a trustee and liquidate grain. The bond provides some additional protection. If a producer sells grain to an unlicensed grain buyer and the buyer does not pay for the grain, court action by the producer may be the only recourse.”
There is also partial protection available to anyone that sells grain to a licensee via credit-sale contract. The PSC reminds anyone entering into a credit-sale contract that the contract must be signed to be valid and enforceable. An indemnity fund for credit-sale contracts provides protection at a rate of up to 80 percent of the unpaid contract, up to a maximum payment of $280,000 per customer.
As of August 1, there were 392 grain warehouses licensed by the PSC. The average capacity of licensed grain warehouses continues to increase. For the first time, the average capacity exceeds one million bushels with an average capacity of 1,015,366 bushels. The PSC also licenses roving grain buyers. As of August 1, there were 75 licensed roving grain buyers.
A reminder to sell grain to licensed grain warehouses and buyers is especially important when farmers are faced with adverse crop conditions. Christmann added, “The PSC encourages farmers to know their rights and responsibilities, keep accurate records, and know who they are doing business with.”