|
|
State Ag Department recovers $1.2 million from oilseed companyHELENA, Mont. (AP)--The state Agricultural Department was able to recover nearly $1.2 million that a struggling oilseed company owed farmers in Montana and North Dakota, but the agency is concerned that growers might not be so lucky if there's a next time. The department's effort--which concluded with a $135,413 payment in total to farmers on Aug. 24--was aided by the fact that Sustainable Systems LLC had a dealer bond, substantial cash on hand, stored commodities that the department could sell and incoming receipts from prior sale of its Montola-brand cooking oil. "This turned out really fortunate and we're tickled to death with that,'' Andy Gray, the commodity services bureau chief, said Sept. 30. "But if there is a next time we might not be so lucky, or the producers might not be so lucky.'' In a recent case in Missouri, 180 farmers lost an estimated $27 million, the agency said. To avoid a similar situation in Montana, state agricultural officials plan to meet with growers groups over the fall and winter to discuss the possibility of starting an indemnity fund or putting other safeguards in place. "The indemnity fund is just one option that some states are trying,'' Gray said. "We just want to go to all these grain farmer-type groups and see what ideas they have, or if there is a need for us to provide more protection to the grain farmers.'' Similar funds in other states assess two-tenths of 1 percent of the value of crops at the time they are sold. Idaho has established such a fund, with the goal of maintaining $10 million to $12 million to reimburse farmers if businesses fail without paying for crops. In the Sustainable Systems case, the company contracted for oilseed in 2008 at rates far greater than the market values last spring. The company was unable to obtain bank loans to pay for seed and remain operational, according to the annual report of Sustainable Systems' parent company Greenshift Corp. In April, the company signed a consent agreement allowing the department to sell crops, seed and processed cooking oil and distribute a $113,000 surety bond to pay producers. A similar process occurred in North Dakota, where farmers are still awaiting payment from a $130,000 surety bond. The company altogether owed nearly $1.2 million to 54 farmers in Montana and North Dakota. Farmers received a total payment of $611,770 in June and $339,000 in July, followed by the $135,413 payment last month. The department also recovered enough money to pay liquidation expenses, including $19,000 owed to Montana State University for proprietary seed varieties sold as part of the liquidation effort. This week, the department returned $65,225 in recovered funds to Greenshift. "We know that other businesses are owed money by Sustainable Systems,'' said Ron de Yong, director of the state Department of Agriculture. "Our duty under the commodity dealer law was to sell inventory and recover money to pay farmers.''
Copyright/Privacy
Copyright 1995-2011. High Plains Publishers, Inc. All rights reserved. Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email: webmaster@hpj.com |
|
