Scope statements
Agriculture, Trade and Consumer Protection
Subject
Agricultural producer security. Objective of the rule. Update existing rules to reflect current conditions under the agricultural producer security program. Among other things, this rule would correct potentially misleading disclosures related to the amount of security provided to certain producers.
Policy analysis
Wisconsin's Agricultural Producer Security Law (ch.
126, Wis. Stats.) helps protect agricultural producers against catastrophic defaults by grain dealers, grain warehouse keepers, milk contractors and vegetable contractors (collectively known as “contractors"). Contractors must be licensed by DATCP, and most contractors must pay assessments into Wisconsin's producer security trust fund (“fund"). If a contributing contractor defaults in payments to producers, DATCP can draw on the fund to reimburse producers for at least part of their loss.
The current version of the law was created in 2002 and amended in 2003. DATCP has adopted rules to implement the law. However, subsequent experience has revealed some problems that must be addressed. A key problem is the lack of backup security for the fund.
The producer security law directs DATCP to obtain backup security (commercial surety bonds or other security) to supplement the fund. The backup security was intended to cover very large contractor defaults that might exceed the capacity of the fund. But changes in insurance and financial markets have made it impossible to obtain the required backup security at a price that is remotely affordable. Hence there is no backup security in place. Statutory changes are needed to address this problem.
The current fund balance is adequate to cover the vast majority of contractor defaults. However, a small number of contractors are so large that their default would exceed the capacity of the fund (often by a very large amount). Some of these contractors have filed individual security to supplement fund coverage, but others have not. DATCP cannot require contractors to file individual security (statutory changes would be needed). But if a contractor filed security under prior law, DATCP can require the contractor to maintain that security. Contractors may also file voluntary security.
Under current DATCP rules, a contractor must give each producer an annual written notice explaining the producer's security coverage. Current rules specify the exact text of the disclosure. But in certain cases, for reasons explained above, the current disclosure may lead producers (those who sell to certain very large contractors) to believe they have more security coverage than is actually available. This rule will correct the current disclosures, to make them more accurate.
DATCP will also consider the following rule changes:
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Changes to clarify which vegetable contract obligations are, or are not, covered by the producer security law.
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Minor rule changes to enhance or clarify current rules.
Relevant federal legislation
There is no federal program to secure milk contractor payments to producers. However, there are federal programs relating to grain warehouses and vegetable contractors. Federal program coverage differs from Wisconsin program coverage, so there is little if any duplication.
Grain warehouses
The United States Department of Agriculture (USDA) administers a producer security program for federally licensed grain warehouses. Federally licensed warehouses are exempt from state grain warehouse licensing and security requirements. State-licensed warehouses are likewise exempt from federal licensing and security requirements.
The federal program focuses on grain storage. Unlike the Wisconsin program, the federal program provides little or no protection related to grain dealing (buying grain from producers, with or without storage). However, USDA is proposing to regulate grain dealing (“merchandising") by federally licensed grain warehouse keepers. If that proposal becomes law, federally licensed warehouse keepers who engage in grain dealing would likely be exempt from state grain dealer licensing. DATCP rules might need to recognize that exemption, if it occurs.
Vegetable contractors
The Perishable Agricultural Commodities Act (PACA) regulates contractors who buy unprocessed, fresh market vegetables from producers. The federal program creates a priority lien, for the benefit of unpaid vegetable producers, on a contractor's vegetable inventory, sales proceeds and accounts receivable.
Wisconsin's vegetable security program applies to processing vegetables, so there is little overlap with PACA (which applies to fresh market vegetables). However, this rule may help clarify the relationship between the Wisconsin producer security law and PACA.
Entities affected
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Contractors. This rule will have little or no effect on 95% of the dairy, grain and vegetable contractors licensed in Wisconsin. However, certain large contractors may need to disclose to producers that their payments to producers are not fully secured (unless the contractors file voluntary security). This rule may also exempt certain transactions from coverage under the Wisconsin producer security program.
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Producers. This rule will have little or no effect on most agricultural producers. However, some producers (those who sell to certain large contractors) will receive more accurate security disclosures from their contractor, which could affect their decision to continue selling to that contractor. This rule may also exempt certain transactions from coverage under the Wisconsin producer security program.
Policy Alternatives
There are few, if any, policy alternatives related to contractor disclosures to producers. The current disclosure of security coverage is misleading in some cases, and must be corrected. DATCP cannot continue to require a misleading disclosure.
DATCP may or may not exempt certain transactions from coverage under the Wisconsin producer security law, after reviewing federal coverage and consulting with affected producers and contractors. DATCP reviews all proposed rules with the Agricultural Producer Security Council, a statutory advisory council that includes producer and contractor representatives.
Statutory alternatives
Rulemaking will be needed, with or without legislation. However, DATCP may also propose legislation to address the current lack of backup security for the producer security fund. DATCP assumes that backup security will not be available in the foreseeable future. One approach would be to require contractors to file individual security if (1) they fail to meet minimum financial ratios and (2) their obligations to producers exceed the capacity of the fund. The amount of security would be based on the degree to which the contractor's obligations exceed the capacity of the fund. DATCP will review possible draft legislation with the Agricultural Producer Security Council and the DATCP Board.
Staff time required
DATCP estimates that it will use approximately 0.8 FTE staff to develop this rule. This includes time required for investigation and analysis, rule drafting, preparing related documents, coordinating advisory committee meetings, holding public hearings, and communicating with affected persons and groups. DATCP will use existing staff to develop this rule.
Natural Resources
Subject
During 1995 a team of DNR, federal, and tribal biologists and administrators developed a list of priorities for statewide fisheries research. At that time, the top research priority was walleye exploitation and development of safe-harvest models for sustainable walleye harvest by both anglers and the tribes.
Policy analysis
Management issue: Long-term effects of angling and spearing exploitation on walleye populations can be modeled using existing data on these fisheries in northern Wisconsin lakes in concert with stock-recruit and age-structured population models. Of principal concern are the long-term effects of exploitation on walleye reproduction, when the scopes for compensation in growth rate, age at maturity, and fecundity have been pushed to their limits. A fish population that experiences exploitation in excess of its ability to compensate, known as recruitment over-fishing, will undergo long-term decline or collapse in the absence of restrictions on its fisheries. Such a pattern of over-fishing has led to the collapse of many of the world's most valuable fisheries.
Safe harvest limits for shared walleye fishery in Northern Wisconsin is based on assumption that maximum sustainable annual exploitation rate is 35% of adult population. This figure was based on the long-term data set from Escanaba but never subjected to verification from a study with replication and controls. Basing a large important program on the best possible information was viewed as good management.
Objective of the rule. Design a study evaluating walleye population levels subject to different levels of exploitation with several lakes at each target level, originally 0, ~20, 35, 50 percent. Currently, research has focused on lakes with 0, 10, 20, and 35% exploitation. The regulation change that is proposed will expand the study to include two 50 % exploitation lakes. The two lakes identified for 50 % exploitation are Sherman Lake (Vilas Co.) and Bass-Patterson Lake (Washburn CO). Both lakes are relatively small (around 200 acres) with good naturally reproducing populations of walleye. Both lakes are part of the GLIFWC's long-term lake monitoring program. As such each lake has at least 10 years of long-term population data available.
Project administration: Cooperative project with DNR Fish Research and GLIFWC.
Current Exploitation Study (1998 to Present): USDA-Forest Service and WDNR Fish Research Section is currently conducting an exploitation project on four lakes to describe the effects of light (0-5%), moderate (10-25%), and heavy (=35%) rates of exploitation on walleye populations. One component of that study is to develop and calibrate walleye population models for the purpose of predicting the maximum sustainable exploitation rate. We propose to incorporate biological and fishery data on walleye populations from various lakes in northern Wisconsin into stock-recruitment and age-structured population models, from which to model long-term effects of various exploitation rates on population age-structure, size-structure, and sustainability. In order to develop a complete model to test the 35% exploitation questions lakes with a higher exploitation rate need to be incorporated in the study.
Specific Objectives of Exploitation Study Include:
1.
Develop density-dependent models of walleye maturity and fecundity for Wisconsin Ceded Territory Lakes from the ongoing studies in Big Crooked Lake, Wolf, Plum and Escanaba Lake, Vilas County, Wisconsin.
2.
Using the above data in combination with data from the current proposal, estimate maximum level of spearing and angling exploitation that can be sustained by walleye in northern Wisconsin lakes.
3.
Simulate long-term effects of a range of spearing and angling exploitation rates on walleye population age structure, size structure, and age at maturity, and fecundity.
Consequence of No Action
Failure to change the harvest regime on Sherman and Bass-Patterson will limit the utility of the current research effort to assess factors that may regulate walleye survival and recruitment in lakes in northern Wisconsin. While the current data collection efforts provide interesting information, the proposed manipulation to the harvest regime will provide invaluable new information on factors that regulate walleye populations, provide information on maximum sustained harvest, and potential surplus harvest that will not be available without the proposed regulation change.
Evaluation
The current data collection efforts on Escanaba, Big Crooked, Wolf, and Plum Lakes will be continued to assess the effects of this proposed rule change. Current data collection efforts include:
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Compulsory Creel Census of harvest and angling effort.
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Annual estimates of walleye population size and recruitment
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Complete fish community assessment of all study lakes including the status of forage fish.
Project Duration: 10 years
Statutory authority
Staff time required
Approximately 100 hours will be needed.
Comparison with federal requirements
