Senator Torrey Westrom (R-Elbow Lake) chief-authored legislation to strengthen financial protections for farmers and cooperative grain elevator members in Minnesota following recent incidents of fraud.
The fraud protection proposals were included within the agriculture omnibus budget bill passed by the Senate Agriculture, Rural Development, and Housing Finance Committee on Wednesday, April 3.
The fraud protections are the result of efforts made during a prior Senate Agriculture Committee hearing this session that focused on the topic, as well as recommendations made by the Minnesota Department of Agriculture’s (MDA) Grain Advisory Group, a gathering of stakeholders that identify ways to mitigate negative impacts on producers when grain buyers go out of business.
“As we saw with the elevator closure in Porter, and now Ashby, the negative consequences impact the entire community,” says Senator Westrom, Chair of the Senate Agriculture, Rural Development, and Housing Finance Committee. “These proposed protections will help strengthen farmers’ confidence in the financial security of a grain buyer, while also bringing more stability for the farmers and consumers. For these farmers, grain is cash. And, just like you or I would depend on a bank to keep our money safe, farmers must be assured their grain is stored safely at the elevator.”
After passing the Senate Agriculture Committee, the bill now heads to the Senate Finance Committee for their consideration. Following expected passage there, it should head to the Senate floor in the coming weeks. Additional highlights of Senator Westrom’s legislation include:
- Requiring all grain buyers to have at least one yearly inspection – present law requires annual inspections for only grain storage licenses, not all grain buyer licenses
- Additional inspections can be required at the discretion of the MDA commissioner
- Inspections must include measurement of all grain owned and maintained by the grain buyer, including off-site storage, which is a direct response to the Ashby incident
- Requires grain buyers to have their financial statements at least examined by a Certified Public Accountant (CPA)
- If a grain buyer purchases $5 million or more annually, they are then required to have a full financial audit by a CPA
- New requirement that all grain cooperative board members must sign off on financial statements
- MDA must annually provide cooperative board members with documents that explain their legal fiduciary obligations as board members