In Louisiana, a new study resolution was introduced regarding farming. The new resolution, titled SCR 122, is a study resolution that the Legislature of Louisiana has implemented and requests the Louisiana Law Institute to study the security interest priorities/contract right issues for the lenders, farmers and grain elevators. SCR 122 provides that the existing indemnity requirements for grain dealers and cotton merchants are not sufficient to provide appropriate protection in the occurrence of insolvency. All of the dealers and merchants are required to indemnify grain and cotton producers. SCR 122 also notes that “current law requires only a $50,000 surety bond in case of insolvency” and that the “insolvency of a grain elevator can often result in losses in the millions of dollars for producers.” The resolution comments that there are multiple groups involved in such businesses where there have been considerable issues related to the items mentioned above.
Eric is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry, he is also a contributing author to the surety bond blog.