By Ivan Raconteur
WINSTED, MN Farmers must cope with floods, drought, insects, and crop disease, but this doesn’t guarantee that they will be paid for their efforts.
The Minnesota Department of Agriculture (MDA) has revoked the grain buyer’s license of the Winsted Farmers Elevator due to breach of contract, according to Liz Erickson, communications coordinator with the MDA.
The elevator purchased grain from farmers, but failed to pay them, according to the MDA.
Erickson explained that the MDA received valid claims against the grain buyers’ bond of Winsted Farmers Elevator, 121 Baker Avenue in Winsted.
When the MDA receives a claim, it has 90 days to let the claimant know whether or not the claim is valid.
In the Winsted case, the MDA received a claim that a seller had not been paid.
The MDA determined that the claim was valid, and notified the Winsted Farmers Elevator of the situation. From that point, the company had 15 days to pay the sellers.
The sellers were not paid, which constitutes a breach of contract on the part of Winsted Farmers Elevator.
As a result, the company’s license to buy grain was revoked.
Since the initial claim was filed, the MDA has received several additional claims, but is not able to release specific numbers at this time.
In order to provide a reasonable time period for those affected to file claims, the MDA set a deadline 180 days from the first breach of contract. That deadline is Friday, Aug. 12.
The department encourages anyone who has sold grain to Winsted Farmers Elevator and who has not been paid to contact the MDA at (651) 201-6011 or www.mda.state.mn.us/fvgu to obtain forms on which to file a claim.
Erickson said anyone who has experienced a breach of contract, regardless of when the breach took place, should submit a claim prior to the deadline.
Claims must be received by the MDA no later than Friday, Aug. 12.
Forms should be sent to: MN Department of Agriculture, Attn. Grain Licensing, 625 North Robert Street, St. Paul, MN 55155.
A decision of disbursements of valid bond claims will be made by Friday, Aug. 26.
Even though there is a grain bond in place, sellers may not be able to recover the full amount of their claims.
Erickson said the company’s grain bond is only $20,000. If the amount of the valid claims exceeds the bond amount, claimants will be paid on a pro-rated basis.
If they are not able to recover the full amount they are due from the bond company, they will need to pursue the matter in the public courts.
Erickson said there have been cases in the past in which claims exceeded $1 million, but bonds were only $30,000.
In addition to the non-payment issue, there is a storage issue.
Farmers who had grain stored at the elevator have learned that the grain is gone.
If a facility is storing grain, and is not licensed to do so, it is doing so illegally, Erickson said.
She explained that separate licenses are required for buying and storing grain.
Erickson encourages anyone who is thinking of selling or storing grain to go to the MDA website to find out if a company is licensed, and what it is licensed for. A link is available at www.heraldjournal.com.
“It is a ‘buyers beware’ situation,” Erickson said.
According to the MDA website, the only licenses held by the Winsted Farmers Elevator were a grain buyer license and a commercial feed license.
Anyone who was not able to recover grain that was stored at Winsted Farmers Elevator will need to seek remedy through the courts, Erickson said.
McLeod County Auditor/Treasurer Cindy Schulz said it appears that the company is a cooperative. No owner is shown on documents filed with the county except the company name, Winsted Farmers Elevator.
A mortgage taken out by the company in 2010 shows Sunil V. Sapatnekar is the treasurer for the business.
Herald Journal contacted Bill Graham, the manager of Winsted Farmers Elevator, by telephone. He declined to comment.
A long history in Winsted
According to the Winsted Centennial Book published in 1987, the Winsted Farmers Elevator was built in 1918 along the Chicago Northwestern Railway.
It was incorporated as the Winsted Farmers Elevator Company March 27, 1945.
The feed mill was added to the elevator in 1957.