Lawmakers seek new limits on grain dealers
JEFFERSON CITY, Mo. (AP)--Some state lawmakers have proposed tougher regulation of grain sales in response to the insolvency of an Audrain County trucking company that officials estimate could result in losses approaching $15 million.
The revised estimate comes from Rep. Steve Hobbs, R-Mexico, whose rural district includes many customers of T.J. Gieseker Farms and Trucking of Martinsburg. In February, state regulators suspended the grain shipping company's license and froze its assets after a routine audit revealed that it owed more than $1.3 million in unpaid grain royalties.
Chris Klenklen, grain regulatory services administrator for the Missouri Department of Agriculture, on March 3 confirmed Hobbs' estimate and suggested that farmer losses could be even higher.
"That (figure) may be on the more conservative side," he said, noting that more than 300 northeast Missouri farmers packed a public meeting in Martinsburg recently to discuss the case.
A pair of bills introduced by Hobbs on March 3 would increase the minimum bonding requirements for licensed grain dealers from $20,000 to $50,000 and set criminal penalties for unlicensed grain dealers.
House Speaker Ron Richard, a Joplin Republican, also announced creation of an agricultural task force to examine the problem.
The task force members have not been chosen, but the group's assignment includes determining whether Missouri needs an indemnity fund for farmers who might lose money in speculative commodity markets.
Several other states have such funds, but Missouri legislators have rejected such proposals in the past, said Rep. Brian Munzlinger, R-Williamstown, a co-sponsor of the two bills.
"For the sake of Missouri farmers who are doing their best to weather the tough economic times, we have to make certain they aren't also in danger of being the victims of fraud and negligence," Richard said in a written statement.
Attorney General Chris Koster and local prosecutors have opened a criminal investigation into the missing money.
Cathy Gieseker, the company's sole employee, has not returned telephone calls seeking comment. Relatives and acquaintances say she has been hospitalized for an undisclosed illness.
Farmers interviewed at the public meeting by The Associated Press said that Gieseker was a futures trading broker who transported crops from grain farmers in northeast Missouri to Archer Daniels Midland and other corporate buyers in St. Louis, Louisiana, Mo., Mexico, Mo. and Quincy, Ill.
The deals were usually sealed with a handshake, not a written contract, with Gieseker promising high prices she was later unable to deliver, according to farmers, as well as Hobbs and Klenklen.
Recent fluctuations in the corn and wheat markets have created "volatile" prices beyond Martinsburg, said Hobbs, who is also a farmer.
State regulators also are investigating the closure of a grain elevator in the northern Missouri town of Gallatin that went out of business with its own financial shortfalls, said Rep. Casey Guernsey, R-Bethany, who co-sponsored the two bills introduced March 3.