New Jersey farmers have greater financial protection
in the event that purchasers of milk and other agricultural
products default on payment, as the result of legislation
recently signed into law by Governor McGreevey.
“To keep agriculture in the Garden State, we need to do more than preserve
our farmland. We also need to keep our farmers on the land by making sure they
can be economically successful,” said Agriculture Secretary Charles M.
Kuperus. “This legislation furthers that goal by ensuring that farmers
will be adequately protected in cases where buyers fail to make payments on credit
"New Jersey is known as the Garden State because of our farmers. They earn
a living by selling their homegrown products to area vendors and residents. By
increasing the bonding amounts for agricultural commodities, we will be protecting
our farmers and their livelihood as well as maintaining New Jersey's rich farming
heritage," said Senator Robert E. Littell, who co-sponsored the legislation.
A2055 signed by Governor McGreevey on May 5th increased the maximum bond
that must be filed with the N.J. Department of Agriculture by anyone
purchasing agricultural commodities from New Jersey producers on credit.
Commodities include milk, fruits, vegetables, eggs, live poultry, hay,
grain or straw.
Legislation for licensing and bonding was first enacted in 1917 for milk
and in 1931 for other agricultural commodities. Required bonding amounts
had not been amended since 1972 for milk and 1978 for other agricultural
Previously, purchasers of milk or cream were required to post bonds equal
to 1-1/2 times the estimated monthly value of purchase, but there was
a $100,000 cap on the maximum bond amount. Buyers of other agricultural
commodities were required to post a bond at least equal to the estimated
maximum monthly value of commodities to be purchased, but there was a
$50,000 cap on the maximum bond amount.
The legislation signed earlier this month removed those caps to adequately
cover farmers’ exposure in the event of a payment default.
Secretary Kuperus and Senator Littell spoke at Vander Groef Dairy, a
Wantage, Sussex County, dairy farm operated by Jeff and Tracy Vander
Groef. Vander Groef Dairy sells to the New Jersey division of Parmalat
Concerns were raised in the dairy industry late last year when Parmalat
USA's parent company filed for bankruptcy. Although Parmalat USA since
has announced plans to reorganize under Chapter 11 to continue operating,
this event helped raise awareness of the need for New Jersey to re-evaluate
A2055 was sponsored by Assemblymen Douglas H. Fisher, John J. Burzichelli
and Robert J. Smith. Other cosponsors were Assemblywoman Alison Littell
McHose, Assemblyman Herb Conaway and Senators Stephen M. Sweeney and
Wayne R. Bryant.