Vegetable Contractors

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A vegetable contractor is ​anyone that contracts with a vegetable producer or producer agent to procure ​​ processing vegetables grown in Wisconsin, or anyone that contracts with a vegetable producer to market (as a producer agent) processing vegetables grown in Wisconsin. Most vegetable contractors are required to obtain a vegetable contractor license from the Wisconsin Depa​rtment of Agriculture, Trade and Consumer Protection (DATCP)​​ and comply with Wis. Stat. ch. 126 and Wis. Admin. Code ch. ATCP 101.

The following vegetable contractors are exempt from licensing [refer to Wis. Stats. § 126.56(2)]:

  • A vegetable contractor that procures vegetables primarily for unprocessed, fresh market use and is licensed under the federal Perishable Agricultural Commodities Act, 7 USC 499a to 499t.
  • A restaurant or retail food establishment that procures processing vegetables solely for retail sale at the restaurant or retail food establishment.​​​
  • A vegetable contractor that spends less than $15,000 per license year to procure processing vegetables from producers and producer agents.

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​Licensing

All vegetable contractor licenses expire January 31 of each year. Licenses may not be transferred or assigned, and fees for a license issued after the license year are not prorated.

Vegetable contractors are also required to file a financial statement if the license application indicates more than $500,000 of processing vegetable contracted to be procured, or estimated to be procured, from producers or producer agents. Financial statements must be filed each year along with, or prior to submitting, the license application. The f​inancial statement must be either reviewed or audited by an Independent Certified Public Accountant (CPA) based on the following thresholds:

  • If the license application indicates vegetables contracted to be procured from producers and producer agents of more than $5​00,000 but less than or equal to $7,500,000, either a CPA reviewed or audited financial statement may be filed​.​

  • If the application indicates vegetables contracted to be procured from producers and producer agents of more than $7,500,000, an audited financial statement must be filed

Additional Licensing Requirements

  • As part of each vegetable procurement contract (written or unwritten), notify producers and producer agents whether the vegetable contractor is a participant in the Agricultural Producer Security Fund and the manner in which it participates. The specific disclosures​ can be found in Wis. Admin. Code §​ ATCP 101.26(2).​​​​

  • Before offering a deferred payment contract, comply with the deferred payment contract terms specified in Wis. Stat. § 126.63(5).

  • Maintain all vegetable procurement contracts and a current record of all vegetable contract obligations, payments, and unpaid balances for a minimum of six years. These records must be made available to DATCP for inspection and copying upon request​.

  • If a vegetable contractor is handling sweet corn, snap beans, or peas:
    • Enter into written contracts with producers, addressing requirements specified in Wis. Admin. Code § ATCP 101.02.
    • Meet the requirements related to unharvested and abandoned acreage.

​​​Fund Assessments and S​ecurity

In most cases, vegetable contractors are required to participate in the Agricultural Producer Security Fund (Fund). For vegetable contractors that are required to both participate in the Fund and file a financial statement, the vegetable contractor's current ratio and debt-to-equity ratio are used to determine Fund assessment rates. The Vegetable Contractor Assessment Calculator can be used to estimate your amounts.

Under certain circumstances, a vegetable contractor may reduce its fund contribution and financial statement filing requirements by filing a vegetable contractor ​​​default claim w​​aiver​. [Refer to Wis. Stat. § 126.70(1)(b).]​

In some cases, vegetable contractors may voluntarily, or be required to, file s​ecur​ity in addition to participating in the Fund. Security may be in the form of cash, a sur​ety bond, or a letter ​of c​red​it.​

Vegetable contractors that file a reviewed or audited financial statement showing negative equity when first licensed are automatically disqualified from participating in the Fund.  A Disqualified contractor must file and maintain security with DATCP in lieu of participating in the Fund. The amount of security required to be filed must be at least 75% of the largest amount of unpaid contract obligations to vegetable producers and producer agents as determined by statute.​

Licensed vegetable contractors that only purchase potatoes for processing may elect not to participate in the Fund but must meet certain conditions. Refer to ​Wis. Stat. § 126.595. Additionally, licensed vegetable contractors that pay cash on delivery​ are not required to participate in the Fund.​


File a Default Claim

If you are a producer​ that has not been paid for vegetables​, file a default claim (refer to ​instr​uctions).


For more information about the Agricultural Producer Security program, call our offices at (608) 224-4998 or Scott Manthey at (608) 224-4966.​​