Companies handling agriculture produce in Washington state may be required to post higher bonds if changes proposed by the Washington State Department of Agriculture are made.
This would better protect producers if the companies they do business with have financial problems or declare bankruptcy.
Warehouses, packers and other handlers would be required to post larger bonds to protect Washington producers. The proposed changes will be presented to the 2002 Washington state legislature.
A series of seven public meetings on the proposed changes will be held in Washington state from Vancouver to Richland from July 31 to Aug. 8.
According to a report in the Washington State Potato Commission newsletter, the formula for calculating the bond amount has not been changed for years and is insufficient to cover losses.
For example, it was pointed out, after recent failures of a seed plant and a potato processing plant, growers received compensation of only pennies per dollar lost.
If the changes are approved, a produce dealer in Washington doing $49 million in business will have to purchase a bond worth about $4 million, a big increase over the current $140,000.
Washington has a Commission Merchant Program that protects producers, buyers and sellers of ag products against illegal business practices.