For the license year beginning Sept. 1, 2018, both the basic assessment and the deferred payment assessment will be reduced:
Reduced Grain Dealer Assessments for 2018
The regulations pertaining to grain dealers under
Chap. 126, Wis.Stats., and
Chap. ATCP 99, Wis. Admin Code are intended to help protect grain producers from non-payment for grain received by grain dealers.
Wisconsin Grain Dealer License Application is required, if you procure producer grain or market producer grain as a producer agent. To “procure producer grain in this state” means any of the following:
A current list of grain dealers licensed by DATCP is
Grain includes the following:
corn, soybeans, wheat, oats, barley, canola, rye, buckwheat, grain sorghum (milo), flaxseed, sunflower seed, triticale, and mixed grain as defined in
A grain dealer does not include the following:
A person who merely brokers a contract between a grain producer and a grain dealer with out becoming a party to the contract, taking control of grain, or accepting payment on behalf of the grain producer.
A person who merely buys or sells grain on a board of trade or commodity exchange.
A person operating as an “Exempt Grain Dealer.”
An “Exempt Grain Dealer” means the following grain dealers are not required to hold a license under Chapter 126, Wis. Stats., but may volunteer to be licensed:
A grain dealer who pays cash on delivery for all producer grain. “Cash on delivery” means full cash payment for grain when the grain dealer takes custody or control of the grain. “Cash payment” means payment in currency, a cashier's check or a check that a bank issues and certifies, wire transfer or simultaneous barter. Please note that a company or personal check is not considered cash payment.
A grain dealer who buys producer grain solely for the grain dealer's own personal use as feed or seed and who spends less than $400,000 per license year for that grain.
Grain dealer licenses expire on August 31 of each year. No person may transfer or assign a license to another entity. Fees for a license obtained during a license year are not prorated.
If a grain dealer's original license application indicates that they purchased or estimate to purchase more than 200,000 bushels of producer grain, a reviewed or audited (by an independent certified public accountant) financial statement is required to be filed with the application. Thereafter, annual financial statements (reviewed or audited) are required every license year, if the purchase amount you indicate on your renewal application exceeds 200,000 bushels or any grain was procured using deferred payment contracts. An audited financial statement is required if the purchase amount on the application (original or renewal) exceeds 2,500,000 bushels. No financial statement is required as long as the purchase amount begins and remains below 200,000 bushels. The financial statement is used to determine the applicant's annual assessment rates (current ratio and debt-to-equity ratio) that are used to calculate the amount the licensee will pay to the Wisconsin Agricultural Producer Security Fund.
The Wisconsin Agricultural Producer Security Fund is a public trust administrated by the department and is used to secure payments to producers in the case of a default. The fund will provide partial payment to eligible producers in the event a licensed grain dealer is unable to pay for the procured grain. The fund is used only for the purpose of chapter 126, Wis. Stats.
A licensed grain dealer is required to contribute annually to the Wisconsin Agricultural Producer Security Fund. The amount to be paid is dependent on the dollar value of reported grain purchases (not bushels) and financial condition. The basic assessment (minimum) is also based the dollar value of reported grain purchases. A grain dealer will be assessed the following minimums:
$100 if the reported grain purchases is less than $500,000
$200 if the reported grain purchases is at least $500,000, but less than $3,000,000
$500 if the reported grain purchases is at least $3,000,000
There is no maximum amount. The grain dealer may choose to divide the assessed amount into quarterly payments or to pay the full amount at one time. First invoices are sent with the grain dealer license, each year, and the first payment (or total amount) is due October 1st.
A licensed grain dealer is required to maintain fire and extended coverage insurance (Certificate of Insurance) issued by an insurance company authorized to do business in this state. The policy must cover all grain in custody of the grain dealer, whether owned by the grain dealer or held for others, at full local market value.
Grain dealers are inspected by the department for compliance with chapter 126, Wis. Stats. and chapter ATCP 99 of the Wis. Adm. Code. Inspections include a review of all procurement records. Procurement records include, but are not limited to, past settlements, open purchase/sales contracts and accounts used for hedging activity.
Bonding or other types of security are not usually required to obtain or maintain a Wisconsin grain dealer license. However, if a first-time applicant (or an applicant that had previously held a license, but had not maintained it continuously and is reapplying), reports or estimates more than $500,000 in grain payments and files a financial statement that shows negative equity, security for the benefit of producers is required and participation in the Wisconsin Agricultural Producer Security Fund is not allowed. Security may also be required if a grain dealer uses deferred payment and their financial statement indicates a debt to equity ratio that is 4 to 1 or greater.
The department may only accept and approve the following types of security:
Commercial surety bond
Certificate of deposit or money market certificate
Irrevocable letter of credit
A grain dealer may reduce their fund contribution and financial statement filing requirements by filing a
grain dealer default claim waiver.
The filing of the default waiver allows a grain dealer to exclude, from fund contributions and financial statement requirements, the dealer’s obligations to a producer who meets all of the following criteria:
The producer owns more than 50% of the grain dealer, or persons who collectively own more than 50% of the producer, also collectively own more than 50% of the grain dealer.
The producer voluntarily and permanently waives the opportunity to file any default claim against the grain dealer in a recovery proceeding under ch. 126, Wis. Stats. The producer must file the voluntary waiver with DATCP in writing, on a form provided by DATCP.
Definitions that pertain to grain dealers.
Producer Security Section - Grain
(608) 224-4937 Fax
For more information about the
Agricultural Producer Security program, call our offices at (608) 224-4998.
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Grain Dealers and Warehouse Keepers page)