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The Agricultural Production Contract
Code, which was signed by the governor during Agriculture Day,
specifies provisions that must be met in production contracts
between farmers and agricultural companies, including a requirement
that contracts be written in plain language using commonly
understood terms. The code also eliminates fine print, stipulating
contracts to be printed in at least 10-point type, and it restricts
agricultural companies' ability to unilaterally terminate farmers'
contracts.
"Economic pressures are forcing the
entire agriculture industry to restructure, and no one is more
vulnerable to these pressures than our farmers," Blagojevich said.
"The provisions in this code will protect those farmers who enter
into production contracts with large agricultural companies to keep
their family farms operational."
The Agricultural Production Contract
Code, House Bill 264, was sponsored in the House by state Rep. Frank
Mautino, D-Spring Valley; Dave Winters, R-Shirland; and John
Fritchey, D-Chicago; and in the Senate by Sen. Larry Walsh,
D-Elwood; John Jones, R-Mount Vernon; and John Sullivan,
D-Rushville.
"When the terms of a contract are clear
and concise and the parties involved fully understand their
responsibilities, everyone benefits," Agriculture Director Chuck
Hartke said. "This code has the potential to prevent
misunderstandings and build stronger relationships between farmers
and their contractors."
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The code also specifies:
--Communications with certain family
members and professionals, including business partners, bankers,
accountants and attorneys, shall not be considered a breach of any
confidentiality clause in an agricultural production contract.
--Special production and handling
guidelines required by the farmer must be fully explained in the
contract. These guidelines include, but are not limited to, disease
protocols for livestock and segregation or identity preservation for
grain.
--Specific causes must be listed for
the termination of the contract and the rejection of the commodity
produced under the contract. In addition, the circumstances in which
a farmer's compensation may be either decreased or increased must be
clearly and concisely stated.
--Agricultural companies may not alter
the quality, quantity or delivery times of seed, fertilizer,
pesticides and other contract "inputs" unless the farmer agrees to
the change.
--Producers may recover actual damages
for the improper termination or alteration of an agricultural
production contract.
--Claims must be filed within four
years of the date in which the party making the allegation knew or
should have known of the existence of the contract violation.
The code,
which takes effect Jan. 1, 2005, does not apply to production
contracts that require delivery of an agricultural commodity within
30 days of the agreement. Violations of the code are a business
offense.
[Illinois
Government News Network
press release]
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