Andrew M. Cuomo, Governor | Richard A. Ball, Commissioner
Jessica Ziehm

June 10, 2011

Commissioner Reminds Farmers to Only Sell to Licensed Dealers

Agricultural Producers Security Law Protects Farmers from Nonpayment

New York State Agriculture Commissioner Darrel J. Aubertine today reminded farmers to only sell to licensed farm product dealers this growing season. Article 20 of the New York State Agriculture and Markets Law, more commonly known as the Agricultural Producers Security Law, requires dealers to be licensed and contribute to a security fund in order to offer protection to farmers in the event of a defaulted payment.

“The Agricultural Producers Security Law has been effective for many years in ensuring that our farmers receive the payment they are owed for the products they produce,” the Commissioner said. “In order for farmers to be protected under this important and effective law, they must make sure they are selling to a licensed dealer, and they must notify the Department immediately in the event of nonpayment. It is critical that farmers become familiar with the details of the Agricultural Producers Security Law so they can be protected financially in a swift and effective manner.”

Farm product dealers are required to be licensed with the New York State Department of Agriculture and Markets. Dealers’ licenses expire on April 30 of each year and must be renewed for the license year beginning May 1. The Department maintains a current list of licensed dealers on its website at and can provide a hard copy upon request.

Article 20 of the New York State Agriculture and Markets 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:

  1. 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.
  2. 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.
  3. File claims 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, they must be submitted by the date specified in the published notice without regard to the 365-day time frame.

A producer can also take advantage of Article 20’s trust provision, a legal mechanism that holds a dealer responsible for the full amount owed to a producer. The “Article 20 Trust” is established upon delivery of the producer’s farm products to a dealer and ends once the amount due is fully paid. Since the Trust provision requires compliance with specific legal requirements, farmers should consult their attorney to see whether that provision is appropriate for them and, if it is, what they must do to receive its benefits.

The Department recommends that producers consult with their attorney concerning matters involving preservation of their trust benefit, or to enforce the trust.

For up-to-date information about the law, a copy of the brochure or a list of licensed dealers, please visit the Department’s website at, or call the Department at 1-800-554-4501.

2011 Press Releases