5. Estimate of the amount of time that state employees will spend to develop the rule and of other resources necessary to develop the rule:
DATCP estimates that it will use approximately 0.25 FTE staff to develop this rule. That includes time required for investigation and analysis, rule drafting, preparing related documents, coordinating council meetings with the Agricultural Producer Security Council, holding public hearings, and communicating with other affected persons and groups. DATCP will use existing staff to develop this rule.
6. Description of all entities that may be impacted by the rule:
Milk contractors, milk producers, grain dealers, and grain warehouse keepers could be impacted as a result of changes made to assessment formulas.
Milk, grain, and vegetable producers are all protected against financial defaults by contractors who contribute to the overall Fund. All could potentially benefit by a higher agricultural producer security fund balance as a result of the additional deferred payment assessment.
7. Summary and preliminary comparison of any existing or proposed federal regulation that is intended to address the activities to be regulated by the rule:
ATCP 99 – Grain
The United States Warehouse Act is a voluntary regulatory program administered by Farm Service Agency (FSA), a unit within USDA. Under the Act, warehouse keepers who obtain a warehouse license must comply with several FSA regulations. Generally, the warehouse keeper must maintain enough grain in inventory to cover 100% of depositor obligations at all times. Further, FSA licensed warehouse keepers must submit financial statements, submit to inspections by USDA auditors, and post surety bonds. In the event a warehouse defaults, FSA can convert the bonds to cash and disperse the proceeds to depositors. The federal grain warehouse license is officially a voluntary program; in practice, it is not completely voluntary. Every state that has significant grain production (including Wisconsin) has some type of state grain warehousing law. These laws require grain warehouse keepers to obtain a license but allow them to choose either a state license or a federal license. Those who choose a federal license are exempt from the state licensing program.
ATCP 100 – Milk
No federal programs currently exist that offer milk producer security from contractor payment defaults.
8. Anticipated economic impact
DATCP expects the proposed rule to have minimal to no economic impact statewide or locally to the general public. However, the three industries (grain, milk, and vegetable) will benefit from greater coverage offered by the Fund if a future default should occur.
Contact Person: David A. Woldseth, Program and Policy Analyst, Division of Trade and Consumer Protection, DATCP; Phone (608) 224-5164.
