The Mississippi Senate Committee on Agriculture will hold a hearing at 3:00. The subject will be none other than Express Grain. Watch it below or at this link. JJ will live – blog the hearing.
Commissioner Andy Gipson addresses the committee. 10 of 16 committee members are present. The Commissioner said 11% of Mississippi's grain is delivered to state licensed grain houses. State can require up to $1 million bond. The company had the bond and submitted their financial statements as required by law. Express Grain operated as both a licensed warehouse and a licensed dealer.
$30-$40 million of grain has not been paid. Increasing the bond would be very expensive and drive many small elevators out of business. Other states have formed a grain elevator indemnity fund. Under such an arrangement, farmers pay a small fee per bushel. The fee goes into a fund that can be used to make farmers whole when such failures occur. 15 states created such programs. A Mississippi Farm Bureau representative said the organization supported the creation of a voluntary indemnity fund.
The Commissioner said our laws are "antiquated." Most of the farmers signed dealer contracts with the company. Such contracts give title to the grain to Express Grain while payment is often at a later date, depending on market conditions. Other farmers had warehouse contracts which provided storage at Express Grain but title remained with the farmer since no sale took place.
The Commissioner said Express Grain told him last week it was lining up investors to buy the operation.
The Senators questioned the Commissioner for some time. Chairman Sen. Chuck Younger said Express Grain was paying higher than the Chicago market rate. The Commissioner said the contracts are so one-sided that the grain elevator enforced the contracts on farmers if Express Grain will make money but tossing the contracts if it will lose money. Thus a farmer is compelled to deliver his grain even if he won't get paid.
10 comments:
Might possibly be the first meeting of the Senate Agriculture Committee, in maybe - well, maybe ever!
Is Commissioner Andy Griffith going to be there?
I notice on the list of creditors on the bankruptcy, the Department of Agriculture was given a check on June 23, 2021 in the amount $14,013.73 and another one for $890.58 on August 20, 2021 for a total of $14,904.31. Both checks were returned NSF. Why didn't the AG Department and Commissioner "White Hat" Gibson sound the alarm back before these farmers got screwed?????
The filing was not filed until September of 2021!
There is business transactions conducted between two parties all over this state thousands of times per day. Why do we need additional laws for the transactions between farmers and grain dealers?
As if the senate can do a damn thing about this. Look for a bunch of self serving press releases.
Umm, the time to do something was before this happened. Now it’s a civil matter between private parties who will all claim they acted within the law. If the senate finds a magical way to prevent this from happening again, the question is why didn’t they already do it?
@3:52, nice noticing, but did you get any more details, such as when the subject checks were actually received and processed by the state and when the state was notified that they were returned NSF?
Do you know if MDAC contacted Express Grain that their checks were returned? Or do you just assume that because they were returned NSF, then the Department should have immediately taken action to put them out of business? If that's the case, as is implied, then you obviously know nothing about what is actually allowed under any state regulatory authority regarding notice, forgetting the fact that having a check returned is not reason enough to start such a process.
But thanks for the information - I'm sure the Senate Committee can use that in their deliberations, that will have nothing to do regarding Express Grain's bankruptcy.
The dates of the checks were dated. The Ag Department was notified when the checks were returned NSF. This should have thrown up a red flag to Gipson. It would have gone up the chain of command quickly- enough for an investigation. That division that regulated knew, but did not go forward to investigate. That small amount, if brought to light might have saved a lot of Farmer’s their livelihood. The estimate is that about if the farmers go under. Gibson should resign for not looking into this back in June and July of this year! Let him get up and face the farmers that are going under. As being a farmer, I had a very respected official that Andy Gipson wasn’t a farmer. All he had was a cow with four tits. By the way, I understand that Gipson is still practicing law, even though he has a full time job as AG Commissioner.
Don’t worry. The Colemans are parading around the delta showing off their money. They are still living large.
@6:44, nice try, but I'll ask again. Just because the checks were dated whatever date doesn't mean that they were sent to the state that day or any day close. If EG were in financial trouble, it is very possible that they wrote, but held, the checks for a while - that's why I ask if you looked into when the checks were deposited, and returned NSF.
I don't know, but I would bet that the processing of checks to a department like MDAC is not actually done by MDAC but rather by DFA, since that's where invoices are sent and payments for agencies made. And once the checks were returned NSF that again would first go to DFA and then notification to MDAC.
More importantly, whenever they became aware that two checks (what they were paying I have no idea from your limited exposition) were returned NSF is not automatically a reason for an immediate shutdown of a business; in normal business and I would assume that it is even more so with government, they would first go back and reinvoice the company - something that would not happen in a short turn around.
Trying to blame this fiasco on MDAC or Gibson is kinda like Jackson's Mayor trying to blame the rampant crime on the fact that the Governor, using Capitol Police, hasn't arrested all the perps committing the crimes.
But your statements about Gipson appear to be correct, although I think he has two cows, maybe a couple of fruit trees on several acres of land. Maybe enough to legally be called a farmer but would take a good Philadelphia lawyer to make that stretch. And yes, I understand the same as you that he is still practicing law - but got an opinion that he could do so as Commissioner. Go figure. How those facts that make it clear that you don't like him and don't think he should be Commissioner relate to your original issue (two NSF checks enough to shut down a business thus costing Don Barrett a large potential lawsuit fee) is hard for me to follow. But I guess it made you happy, so be it.
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