Farms.com
Iowa Attorney General Tom Miller leads 16 farm and ranch states in proposing new laws to protect producers who enter contracts to provide grain or livestock. The State Attorneys General have drafted new laws to protect contract growers and producers -- the growing number of farmers and ranchers who produce livestock or grain on contract with large contractor companies.
Miller said that contracting is a valuable tool for producers, but "we want to be sure farmers get a fair shake in a time when there is a strong trend toward consolidation and concentration in agriculture."
The model legislation has been endorsed by the attorneys general of sixteen farm and ranch states.
The legislation will:
* Require contracts to be in plain language and contain disclosure of material risks.
* Provide contract producers with a three-day right to review production contracts.
* Prohibit confidentiality clauses in contracts. This provision -- which is modeled after a law enacted last year in Iowa -- will help maintain the market transparency that historically has been available to farmers and ranchers through auctions and terminal and futures markets. "Farmers and ranchers should have the freedom to discuss their contracts with other farmers at the coffee shop, not to mention with their own lawyers and bankers," Miller said.
* Provide producers with a first-priority lien for payments due under a contract -- in case the contractor company should go out of business. Iowa approved such a measure in 1999.
* Protect producers from having contracts terminated capriciously or as a form of retribution if farmers already have made a sizeable capital investment required by the contracts.
* Make it an unfair practice for processors to retaliate or discriminate against producers who exercise rights including the right to join producer organizations.:
