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Proposed changes to Wisconsin’s APS fund
Cooperative Network and the Wisconsin Cheese Makers Association have asked the Wisconsin Department of Agriculture, Trade and Consumer Protection to make some changes to the Agricultural Producer Security program fund. The APS was set-up to protect dairy, grain and vegetable producers in the event of a financial default by a buyer. Processors pay into the fund according to the amount of business they do as well as their financial situation.
The problem arose with the default of an out-of-state vegetable processor resulting in the APS fund paying out $6.7 million to 19 Wisconsin vegetable producers. The payment took more than half of the fund. Cooperative Network and the Cheese Makers note the vegetable processing industry contributed just 8 percent to the total fund which means the dairy and grain industries had to subsidize the vegetable growers. In addition, the three industries will have to resume assessment payments to rebuild the fund.
The two groups have asked DATCP to limit fund payments to the amount contributed by an industry. Dave Ward with Cooperative Network says in this case, “the vegetable producers contributed about $1 million to the fund and they withdrew over $6 million” with dairy and grain making up the remaining $5 million.”
The fund is administered by the Producer Security Council which met on Friday morning, Ward says they all seemed to agree with the concept but aren’t quite sure how to proceed. He says the group will meet again either late this year or early next year. In the meantime CN will be working with legislators, “changes could be done through the rule-making process or through the legislature, we’re exploring both avenues.”
DATCP Secretary Ben Brancel says according to the rules as they stand now, the assessments for dairy would begin next May and grain in September of 2015. He says whatever the Council decides, they will work with it but this is a very challenging program.
As part of an overhaul of the APS in 2002, plans were made to accumulate fees and use the money to buy bonds as a type of insurance policy. Brancel says the bond market tanked after 9-11 the ability to buy secondary bonds at reasonable rates ended and the concept was never pursued. “If they want us to explore the bond market and the opportunities there, we certainly will do that.”
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