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Ga. Bonding Law Affects Farmers, Produce Dealers

  Anyone engaged in the business of buying Georgia agricultural products directly from a Georgia producer must be licensed and bonded by the Georgia Department of Agriculture, according to the state’s Dealer in Agricultural Products  law. This includes out-of-state buyers of Georgia commodities, as well as those within the state.  The only dealers who are exempt are those who certify that they buy exclusively in cash.

  In addition, dealers who purchase agricultural products now are required to pay for the commodities within 20 days following the delivery in the absence of a written contract.

  Both agricultural product dealers and farm producers also are required to jointly issue a certificate of receipt and quality to the producer or the producer’s agent.  The certificate of receipt and quality must include the following information:  name and address of the agricultural product dealer; name and address of the producer; delivery date and time of receipt; description of the product as to identity, quantity, quality, condition, and grade of the product; price per unit and terms of the transaction.

“Although the bonding program and its requirement for prompt payment are in place to help protect farmers and produce dealers, nothing takes the place of a properly-written contract when farmers and buyers are dealing with perishable products,” said Georgia Commissioner of Agriculture Tommy Irvin.

  Farmers are advised to require proof of bonding from buyers, even if they have dealt with the dealer in the past.  Without these precautions, there is little recourse at the state level to recover losses if a produce dealer goes bankrupt or otherwise defaults on his or her obligations.  Likewise, a produce dealer may have difficulty in substantiating the actual condition of the produce purchased if it is received in poor condition.

  The federal Perishable Agricultural Commodities Act offers additional protection to growers doing business with merchants, dealers and brokers handling fresh and frozen vegetables in interstate commerce.

  These companies or individuals are required to be licensed by the U.S. Department of Agriculture, which can define unfair practices and help resolve disputes between growers and interstate firms.

  For information on bonded dealers or licensing and bonding procedures, call your local state farmers’ market or the Georgia Department of Agriculture’s Licensing and Bonding Section at (404) 656-3725.