• Amends the cherry marketing order (ATCP 141) to eliminate the requirement of an advisory referendum every 4 years (non-binding advisory referendum asks producers whether they wish to continue the cherry marketing order). A marketing order may be repealed at any time, with or without a non-binding advisory referendum, if the repeal is approved in a formal binding referendum of affected producers.
• Repeals the mint marketing order (ATCP 147).
• Amends the ginseng marketing order (ATCP 148):
• Eliminates the current annual producer assessment based on sales, and replaces it with an assessment based on acres in ginseng production.
• The ginseng marketing board must annually determine the assessment rate, which may not exceed $150 per acre in ginseng production. The ginseng board may require affected producers to report acreage in production.
• The ginseng board may verify reported acreage by aerial photography or other reliable means.
• The ginseng board must annually notify each producer of the assessment amount owed by that producer.
• DATCP no longer determines assessment amounts, but may audit the ginseng board's determination of assessment amounts.
• Eliminates the requirement of an advisory referendum every 5 years (advisory referendum asks producers whether they wish to continue the ginseng marketing order). A marketing order may be repealed at any time, with or without a non-binding advisory referendum, if the repeal is approved in a formal binding referendum of affected producers.
• Makes other minor changes to current rules.
The voting requirement for the amendments to the cherry, ginseng and mint marketing orders as provided in s.
96.08 (1) (b) 3., Stats., is that the applicable referendum most be approved by not less than 50% of the producers voting provided that 50% of the producers on the established list vote in the referendum. For each of the cherry, ginseng and mint marketing orders, the voting requirement identified in s.
96.08 (1) (b) 3., Stats., was used to adopt the original marketing order.
Business impact
Businesses Affected. In a general sense, this rule affects producers of all agricultural commodities that are covered by an agricultural marketing order or that may be covered in the future. This rule more specifically affects cherry, mint and ginseng producers. Many of the affected businesses are “small businesses." The effects of this rule are generally insignificant.
Agricultural producers; general. This rule gives DATCP more procedural flexibility related to the conduct of marketing order referenda and marketing board elections. Under this rule:
• DATCP may use electronic mail to conduct referenda and elections (DATCP is not required to use electronic mail).
• In a marketing board election (but not a marketing order referendum), DATCP may notify producers how to obtain ballots rather than actually mailing ballots to all producers.
DATCP may use these alternative procedures where appropriate. In appropriate circumstances, the alternative procedures may be at least as effective in encouraging producer participation, and may be substantially cheaper. Cost savings may be passed on to marketing boards and individual producers. Cost savings to individual producers will not be significant.
Mint Producers. This rule repeals the current mint marketing order, and eliminates the producer assessments associated with that order. There may be some cost savings to individual mint producers, but the savings will be insignificant. Currently, there are only 14 mint producers in Wisconsin.
Cherry Producers. This rule repeals a current marketing order provision that requires an advisory referendum of cherry producers every 4 years, to determine whether they support continuation of the marketing order. The repeal will save some costs for the marketing board and affected producers. The savings for individual producers will not be significant.
Ginseng Producers. This rule requires ginseng marketing order assessments based on acres in production, rather than sales. Sales assessments are difficult to collect, because most buyers are outside the United States. This rule will charge assessments based on reported acres in production (verified by aerial photography or other reliable means). Assessments based on acres in production will be more fair and reliable. Some individual assessments will go up, but others will go down. Overall assessments will increase, but there will not be a major financial impact on ginseng producers.
This rule repeals a current marketing order provision that requires an advisory referendum of ginseng producers every 5 years, to determine whether they support continuation of the marketing order. The repeal will save some costs for the marketing board and affected producers. The savings for individual producers will not be significant.
Federal regulation
The United States Department of Agriculture (USDA) administers an agricultural marketing order program, under which USDA has broad authority to regulate prices and production, as well as to charge assessments for market development, promotion, research and education. USDA has adopted marketing orders for some of the same commodities covered by Wisconsin marketing orders (including potatoes, corn, milk and soybeans). However, the state marketing orders do not directly duplicate or conflict with the federal marketing orders.
Surrounding state regulation
Surrounding states have marketing orders for some, but not all, of the commodities covered by Wisconsin marketing orders. For example, Illinois, Iowa, Minnesota and Michigan have marketing orders for corn. Illinois and Iowa also have marketing orders for soybeans, milk and other commodities. Nearly all United States ginseng is grown in Wisconsin, so no other states have ginseng marketing orders.
Fiscal Estimate
The proposed rules will not have a significant fiscal impact on DATCP and will have no fiscal effect on local government.
Notice of Hearings
Agriculture, Trade and Consumer Protection
The State of Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) announces that it will hold public hearings on a proposed amendment to chapters ATCP 99, 100, and 101, Wis. Adm. Code, relating to the Agricultural Producer Security.
DATCP will hold three public hearings at the times and places shown below. DATCP invites the public to attend the hearings and comment on the proposed rule. Following the public hearings, the hearing record will remain open until Wednesday, October 31, 2008 for additional written comments.
Hearing impaired persons may request an interpreter for these hearings. Please make reservations for a hearing interpreter by August 6, 2007, by writing to Kevin LeRoy, Division of Trade and Consumer Protection, P.O. Box 8911, Madison, WI 53708-8911, telephone (608) 224-4928. Alternatively, you may contact the DATCP TDD at (608) 224-5058. Handicap access is available at the hearings.
Submission of Comments and Copy of Rule
You may obtain a free copy of this rule by contacting the Wisconsin Department of Agriculture, Trade and Consumer Protection, Division of Trade and Consumer Protection, 2811 Agriculture Drive, P.O. Box 8911, Madison, WI 53708. You can also obtain a copy by calling (608) 224-4928 or emailing
kevin.leroy@wisconsin.gov. Copies will also be available at the hearings. To view the proposed rule online, go to:
To provide comments or concerns relating to small business, please contact DATCP's small business regulatory coordinator Keeley Moll at the address above, by emailing to
Keeley.Moll@datcp.state.wi.us or by telephone at (608) 224-5039.
Hearing Dates and Locations
Thursday, August 16, 2007, 2:00 p.m.
DATCP Northwest Regional Office
3610 Oakwood Hills Pkwy
Eau Claire, WI 54701-7754
Tuesday, August 21, 2007, 2:00 p.m.
DATCP Northeast Regional Office
Room 152A
200 N Jefferson St.
Green Bay, WI 54301
Wednesday, August 22, 2007, 10:00 a.m.
Department of Agriculture, Trade and Consumer Protection
2811 Agriculture Dr.
Board Room (CR-106)
Madison, WI 53718-6777
Analysis Prepared by the Department of Agriculture, Trade and Consumer Protection
Wisconsin's agricultural producer security program helps protect agricultural producers against catastrophic financial defaults by grain dealers, grain warehouse keepers, milk contractors and vegetable contractors (collectively referred to as “contractors").
Contractors must be licensed by the Department of Agriculture, Trade and Consumer Protection (“DATCP") and pay license fees. Most contractors must also pay assessments to an agricultural producer security fund (“fund"). In the event of a contractor default, DATCP may compensate producers from the fund.
This rule changes current grain dealer, grain warehouse keeper and vegetable contractor license fees. This rule changes current fund assessments for grain dealers (deferred payment assessment) and grain warehouse keepers, and changes required minimum fund assessments for grain dealers, grain warehouse keepers, milk contractors and vegetable contractors. This rule does not make any other significant changes in current contractor regulations.
Statutory authority
Statutes interpreted
Agency authority
DATCP has broad authority, under s.
93.07(1), Stats., to adopt rules needed to implement laws under its jurisdiction. DATCP also has authority, under ss.
126.81 and
126.88, Stats., to establish license fees and fund assessments under the agricultural producer security program. Chapter
126, Stats., establishes license fees and fund assessments, but authorizes DATCP to change those license fees and fund assessments by rule.
Under current law, DATCP must modify fund assessments whenever fund balances fall outside a specified range. The fund balance attributed to the grain warehouse keeper sector currently falls below the required minimum of $200,000. Therefore, DATCP must modify fund assessments for grain warehouse keepers. DATCP is authorized, but not required, to modify fund assessments for other contractors.
Background
DATCP administers the agricultural producer security program under ch.
126, Stats. DATCP has adopted rules to implement the program. The rules are contained in chs.
ATCP 99-
101, Wis. Adm. Code. Under current law:
• Licensed contractors must pay license fees to fund DATCP administration of the agricultural producer security program. Administration includes grain warehouse inspections, review of contractor financial statements, license administration and response to contractor financial defaults and law violations.
• Most contractors (“contributing contractors") must pay fund assessments to finance the agricultural producer security fund. The fund is held in trust, for the benefit of producers. If a contractor defaults on payments to agricultural producers, DATCP may reimburse producers from the fund. Fund assessments are like insurance premiums, and are based on contractor size, financial condition and risk practices.
Prior to 2003, DATCP administrative costs were paid by a combination of general tax revenue (“GPR") and contractor license fees. However, the 2003-2004 Biennial Budget Act eliminated virtually all GPR funding for program administration. That made it necessary to transfer staff from GPR funding to license fee funding. Partly as a result of that change, current license fee funding is no longer adequate to cover administrative costs. There has been a gradual growth in administrative costs, due to factors (such as statewide union contracts for accountants and auditors) that are outside DATCP control.
Funding shortfalls are especially severe in the grain dealer and grain warehouse keeper programs. Administrative costs now annually exceed license fee revenues by over $200,000 in each of those programs, and each program has a negative cash balance of more than $350,000. In the vegetable contractor program, administrative costs now annually exceed license fee revenues by over $20,000, and the program has a negative cash balance (January 1, 2007) of more than $50,000.
Deficits in the grain and vegetable administration accounts are currently being covered by milk contractor license fee revenues and by fund assessment revenues that would normally go to the producer security fund. That unfairly affects milk contractors and reduces fund coverage for all producers (grain, milk and vegetable).
This rule increases annual license fees for grain dealers, grain warehouse keepers and vegetable contractors, to remedy current inequities and provide minimally adequate funding for program administration. This rule also adjusts fund assessments, especially for grain warehouse keepers (for whom an adjustment is required by law).
Notwithstanding this rule, the total of all contractor payments under the producer security (license fees plus fund assessments) will actually decline over the next few years, because of fee credits and declining formula rates that are built into the producer security law itself. This rule will slow, but not reverse, that overall decline. This rule will not have any significant impact on contractors' overall business costs.
Rule contents
Grain Dealer License Fees
Current Fees. Under current law, a grain dealer must pay the following annual license fees and surcharges:
• A license processing fee of $25.
• One of the following fees:
• $500 if the grain dealer purchased at least $500,000 worth of producer grain in this state during the grain dealer's last completed fiscal year.
• $200 if the grain dealer purchased at least $50,000 but less than $500,000 worth of producer grain in this state in the grain dealer's last completed fiscal year.
• $50 if the grain dealer purchased less than $50,000 worth of producer grain in this state in the grain dealer's last completed fiscal year.
• A $225 fee per business location in excess of one location (but only if the grain dealer purchased $500,000 worth of producer grain in this state during the grain dealer's last completed fiscal year).
• A $45 fee per truck, in excess of one truck, that the grain dealer uses to haul grain in this state.
• A $425 surcharge if the grain dealer submits a required financial statement that is not an audited financial statement.
• A $500 surcharge if the grain dealer operated without a license at any time during the preceding year.
• A $100 surcharge if the grain dealer, during the preceding year, failed to file a required financial statement by the required filing deadline.
• A $100 surcharge if the grain dealer failed to file a license renewal application by the license expiration date of August 31.
Proposed fees. This rule changes the calculation of grain dealer license fees. Under this rule, a grain dealer must pay the following fees and surcharges:
• A license processing fee of $25 (same as current law).
