Officials Uncertain '91 Bill Would Have Helped in Turner Grain Case

by Lee Hogan  on Wednesday, Sep. 3, 2014 12:08 pm  

Arkansas Secretary of Agriculture Butch Calhoun and State Plant Board Director Darryl Little each told Arkansas Business they are not sure a grain dealer bill that started in the Arkansas Legislature in 1991 would have helped stop the Turner Grain fallout, had it become law. (Photo by Shutterstock)

Even if the 78th Arkansas General Assembly had passed a law in 1991 regulating grain dealers, some agriculture officials believe it wouldn’t have prevented the losses threatened by the collapse of Turner Grain Merchandising Inc. of Brinkley.

The bill, sponsored by former Democratic state Sen. Lu Hardin, would have granted the Arkansas State Plant Board oversight of grain dealers operating in Arkansas. It would have required dealers to obtain a license and maintain a minimum net worth. And it would have allowed the board to audit grain dealers' financial resources and their "ability to pay for grain purchased by them."

The bill, which passed unanimously in the Senate but died after reaching a House committee, has been noted by state agriculture officials in recent weeks as Arkansas farmers have grappled with millions of dollars in potential losses caused by Turner Grain’s failure to fulfill grain contracts.

Now, officials involved in Arkansas agriculture are focusing on researching and drafting a law that could regulate grain dealers in Arkansas and protect farmers. It's widely expected that the Legislature will take up the issue during its next general session, which begins in January. 

Arkansas Secretary of Agriculture Butch Calhoun said he’s talked to several lawmakers about a proposed bill. But both Calhoun and State Plant Board Director Darryl Little reiterated that attention to detail is important in this process.

"We don't need a quick, knee-jerk fix," Little said. "We need to study it."

Steve Eddington, vice president of public relations for the Arkansas Farm Bureau, said the nonprofit organization has been approached by several lawmakers about a bill and is researching other states' grain dealer laws.

But he was unable to characterize the role the bureau might play in the ongoing discussions.

"Our policy positions are defined by our membership," Eddington said in an email Tuesday to Arkansas Business. "I have every expectation that expanded policy on this subject will be introduced and discussed before and around our state convention, which is the first week in December. Our board defines our legislative priorities after policy is set each year."

Along with the Agriculture Department and its State Plant Board, Little said the Attorney General's office and the National Agriculture Law Center at the University of Arkansas in Fayetteville have offered help as regulators weigh their options.

Possible Regulations

Little said his staff's research indicates that about 35 states have some kind law regulating grain dealers.



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