Proposed bill would protect farmers if grain brokers fail

A Berks County lawmaker is continuing efforts to provide financial protection for grain farmers.

State Senator Judy Schwank, a Democrat from Ruscombmanor Township, introduced legislation last week that would create a safety net for farmers who sell grain through a broker in the event that broker goes bankrupt. .

This is not his first attempt to obtain these protections.

Schwank, minority chair of the Agriculture and Rural Affairs Committee, has worked for five years with her colleague Elder Vogel, a Beaver County Republican, to get legislation passed. The inspiration for the legislation came from two Berks County farmers who lost thousands of dollars when the broker they worked with went out of business.

Pennsylvania has no regulations providing compensation coverage for farmers if a grain buyer goes bankrupt.

“The lack of protection given to Pennsylvania grain growers puts them at significant risk and makes other farmers think twice about doing business here,” Schwank said in a press release announcing the introduction of the proposal. . “This bill will ensure that other farmers do not have to endure these economic hardships and hurt their livelihoods when they have fulfilled their end of the bargain.

“Other states protect their farmers. It’s time for Pennsylvania to do the same.

The legislation, Senate Bill 1032, would create a fund called the Agricultural Commodity Indemnity Fund that would be used to reimburse farmers if their grain handler went bankrupt. ACIF will be funded by a one-half cent per bushel levy paid by farmers who sell or store grain with licensed grain handlers, and an annual grain handler license fee. The fee will be removed when the fund reaches $10 million, and the rating will not be reinstated unless the fund drops to $8 million.

“The creation of ACIF will provide safety to Pennsylvania farmers who do business with grain traders by preventing potentially devastating effects if the company they did business with becomes insolvent,” Vogel said in the press release. . “Furthermore, it will favor local licensed grain handlers in areas of the Commonwealth that border states with such a fund already in place.”

Several other states offer similar protections. The legislation proposed by Schwank and Vogel is based on laws passed in other states and has the support of the Pennsylvania Farm Bureau.