Recommended Producer Practices
The following is a list of recommended practices for producers that engage in farm produce transactions. These practices are only recommended to provide additional producer security, but do not guarantee security. If you have any questions please contact the Michigan Department of Agriculture & Rural Development (MDARD).
____ Has your grain been properly weighed and has a representative sample been taken of your grain and properly graded before dumping?
____ Did you receive an acknowledgement form (scale ticket) with a name and address of the grain dealer, commodity, date of transfer, and gross and net weight? Does the scale ticket prominently state "That unless parties agree to another disposition s within thirty days of the delivery to the grain dealer, the farm produce transaction is a price later agreement transaction." The ackowledgement may also be treated as a price later agreement if the form contains required language and the producer or their agent has signed the form. (You must keep these tickets! If a problem occurs, this may be your only proof of ownership.)
____ Do you understand that farm produce that has no dispostion within thirty days of delivery will automatically be a price later agreement with no producer signature requirement. The dealer is required to send the producer a price later agreement. Therefore, keep track of your scale tickets and the date of delivery.
____ Do you understand the type of marketing transaction you have chosen or have allowed to occur and who has title? Has the grain dealer provided you with a contract? Do you fully understand the terms of the contract?
____ Do you understand that a warehouse receipts(includes grain bank) and open storage ( farm produce in which no dispostion has occurred within thirty days of delivery) are the only farm produce transactions in which you retain title to the produce?
____ Does the warehouse receipt include storage location, receiving location, date of receipt, rate of storage, net weight, percentage of dockage and grade, and signature of grain dealer and an expiration date? Are their statements printed as to the negotiability of the receipt, ownership interest, and that receipt is subject to act?
____ Does the price later agreement (PLA) include class and grade of produce, serial number, date of receipt, quantity, charges for handling, if any, dealer's and producer's address and signature (producer's signature not required if no disposition within thirty days of delivery) and an expiration date? " Does the PLA include the statement that it is subject to PA 141 of 1939, as amended and rules promulgated thereunder.
____ Do you understand that you have a right under Michigan Uniform Commercial Code Law to obtain a securtiy interest in your farm produce which are under price later agreements. Contact the grain dealer or the department for financing statements.
(Remember that you must file a security agreement with the Secretary of State Office within twenty (20) days of delivery to perfect your security interest!)
____ Does the grain dealer have a valid license posted at time of delivery? Have you verified that the grain dealer is listed as licensed? Verify grain dealer licensing here. You may also contact the department at (517) 241-2865 for verification or information to assist the Department in licensing potential grain dealers.
____ Do you know when and how you will set the price on your grain and when you will be paid? The Michigan Grain Dealers Act provides protection for farm produce transactions prior to pricing. Once price has been established protection would be provided under the Uniform Commercial Code. Please note that financil risks do increase in farm produce transactions where the payments are deferred.
