A glass of milk on a wooden table, with milk pouring in.
June 11, 2020
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Albany, NY

State Agriculture Department Reminds Farmers to Sell Their Products to Licensed Farm Product and Milk Dealers

State Agriculture Department Reminds Farmers to Sell Their Products to Licensed Farm Product and Milk Dealers
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Milk Producers Security Fund and Agricultural Producers Security Law Protects Farmers from Nonpayment

The New York State Department of Agriculture and Markets today reminded all farmers, including New York’s dairy farmers, to only sell to licensed dealers. New York State Agriculture and Markets Law requires farm product and milk dealers to be licensed and provide security for purchases made from New York State producers. This ensures financial protection to farmers in the event of a default in payment from the dealer.

Milk dealers are required to be licensed with the New York State Department of Agriculture and Markets if they handle at least 3,000 pounds of milk per month. Milk dealer licenses must be renewed every year. Find license information.

Licensed dealers who purchase milk directly from producers or cooperatives are required to secure their purchases by either participating in the state’s Milk Producers Security Fund (MPSF) or by filing full alternate security in the form of a bond or letter of credit. Milk sales between cooperatives are exempt from this security provision.

In order to receive financial protections available, producers must:

  • Sell their milk only to licensed dealers. Only sales to licensed dealers are covered under Article 21 of the New York State Agriculture and Markets Law. The dealer must be licensed at the time of the transaction. Contact the Division of Milk Control and Dairy Services at 518-457-1772, or email [email protected], to inquire if a dealer is licensed.
  • Ensure that the sale of milk between the producer and dealer, for which a claim is made, has occurred within 40 calendar days from the earliest unpaid transaction date at the time the claim is filed. Unpaid transactions that occur after the 40-calendar day period will not be eligible for reimbursement.
  • File a claim of nonpayment with the Department in a timely manner. In the event the Department has issued a notice to file claims, claims must be submitted by the date specified in the published notice.

Farm product dealers are also required to be licensed with the Department of Agriculture and Markets as outlined in Article 20 of the New York State Agriculture and Markets Law, which is more commonly known as the Agricultural Producers Security Law. Dealers requiring a Farm Products Dealer License are those purchasing at least $20,000 worth of agricultural products and selling those products, whether in raw or processed form, at wholesale. All agricultural products grown or raised in New York State are covered by the law with the exception of dairy, eggs, and timber.

The Agricultural Producers Security Law provides financial protection for farmers against nonpayment for their products sold to licensed dealers. This financial protection consists of security in the form of a bond or letter of credit furnished by the dealer, and supplemental financial coverage from the Agricultural Producers Security Fund, which is funded by licensed dealers.

In order to preserve a producer’s eligibility for the financial protections available under the Agricultural Producers Security Law, producers must:

  • Sell only to licensed dealers. Only sales to licensed dealers are covered under Article 20. The dealer must be licensed at the time of the transaction. The Department maintains a current list of licensed dealers.
  • Ensure that the sale of farm products between the producer and dealer, for which a claim is made, has occurred within 120 days from the earliest unpaid transaction date at the time the claim is filed. Unpaid transactions that occur after the 120- day period will not be eligible.
  • File a claim of nonpayment with the Department no later than 365 days after the sale and delivery of the farm products. In the event the Department has issued a notice to file claims, claims must be submitted by the date specified in the published notice.

For additional information about the Agricultural Producers Security Fund or the Milk Producers Security Fund, visit www.agriculture.ny.gov.