The state House of Representatives rejected a Brown County lawmaker’s attempt Tuesday to put grain producers first in line when bond money is distributed after the financial failure of a grain buyer.
House members voted 52-18 against the legislation, which Rep. Dennis Feickert, D-Aberdeen, brought in the wake of the Anderson Seed failure at Redfield last year.
He said there were 29 claims totaling more than $2 million made against the $100,000 bond that the state Public Utilities Commission collected from Anderson Seed’s insurer. There were 22 producers who received just under 5 percent of what they lost.
“The goal is to better protect the producer. The highest risk is with the producer,” he said.
But Rep. Charlie Hoffman, R-Eureka, spoke against the bill, saying it was only the second such instance in 11 years and reforms in PUC laws that are moving through the Legislature this session will make the likelihood of a repeat less likely.
Hoffman said he has friends who lost many thousands of dollars “in the Anderson Seed fiasco” and told company officials, “Shame on you.” But, he added, payments were made for the other 99.573 percent of the $7 billion-plus of grain handled in South Dakota last year.
“We can’t alleviate every wrong, nor can we make every wrong right,” he said.
Feickert’s bill was opposed by lobbyists for cooperatives, seed and grain businesses and truckers, so they wouldn’t be placed behind producers.
Rep. Gary Cammack, R-Union Center, said bonds are intended to protect all parties doing business with a grain buyer, because they’re all taking the same risk.
“This process has worked very well for us for decades,” he said.
Rep. Lee Qualm, R-Platte, said it would be great as a producer to be first in line ahead of the others. But he said that would be “extremely unfair.”
“There’s a lot of people who have skin in this game,” Qualm said.