Protecting Contract Growers - South Dakota

THE STATE OF SOUTH DAKOTA

SEVENTY-SECOND SESSION
LEGISLATIVE ASSEMBLY, 1997
SENATE BILL NO.  202
INTRODUCED BY: SENATORS FREDERICK, HAINJE, HALVERSON, HUNHOFF, AND SYMENS AND REPRESENTATIVES CRISP, DIEDRICH, DUXBURY, HALEY, JORGENSEN, PUTNAM, SCHAUNAMAN, SPERRY, AND WEBER

1997 Bill Text SD S.B. 202

VERSION: Introduced

VERSION-DATE: January 29, 1997

SYNOPSIS: FOR AN ACT ENTITLED, An Act to regulate certain agricultural contracts.

TEXT: BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:

Section 1. Terms used in this Act mean:

(1) "Agricultural commodity," any material produced for use as food, feed, seed, or fiber and includes fiber crops, food crops, oilseeds, seeds, livestock, livestock products, poultry, poultry products, and other farm products or by-products;

(2) "Contractor," any person who, in the ordinary course of business, contracts with a producer to grow or raise agricultural commodities in this state; and

(3) "Producer," any person who produces an agricultural commodity in a quantity beyond the person's own family use and is able to transfer title to another or who provides management, labor, machinery, facilities, or any other production input for the production of an agricultural commodity.

Section 2. A contract for an agricultural commodity between a contractor and a producer shall contain language providing for resolution of contract disputes by mediation. Litigation of a contract dispute may not begin until mediation has failed. Either party to a contract may initiate mediation and the mediation process shall be completed within forty-five days, or the parties shall be released. The cost of mediation shall be shared equally between the parties. Any mediation or litigation to resolve contract disputes shall take place in South Dakota.

Section 3. If a contractor is the subsidiary of another corporation, limited liability company, limited partnership, limited liability partnership, partnership, or association, the parent corporation, limited liability company, limited partnership, limited liability partnership, partnership, or association is liable to a producer for the amount of any unpaid claim or contract performance claim if the contractor fails to pay or perform according to the terms of the contract.

Section 4. There is an implied promise of good faith as defined in Section 57A-1-201(19), by all parties to any agricultural contract. In any action to recover damages, if the court finds that there has been a violation of this provision, damages, court costs, and attorney fees may be awarded by the court.

Other Resources:

• See the Family Farm Rules Bulletin (#4) for more information on animal agricultural contracts!
• National Contract Growers Association
• Rural Advancement Foundation International
• When the Farmer Makes the Rules - by Brian Levy, The New Rules, Fall 2000
• The Plucking of the American Chicken Farmer, By Dan Fesperman and Kate Shatzkin, The Sun, Feb 28, 1999.