Florida License and Bond Law
History and Purpose
The Florida License and Bond Law was enacted in 1941 to give market protection to producers of perishable agricultural commodities. Because the product the Florida grower is selling is perishable -- and indistinguishable from other like products once removed from the shipping container -- the producer is at the mercy of the receiver for payment. There is no opportunity to simply return the product. Without the administrative process offered by the Law, Florida growers would be faced with lengthy and expensive civil suits. In most cases, the cost of recovery would be greater than the value of the product.
License and Bond Requirement
The Law requires dealers in agricultural products be licensed with the Department if they buy directly from the producer or producer's agent and pay for that product in any form other than cash currency. Before receiving a license, the dealer must post a surety bond or certificate of deposit made payable to the Department. The bond amount must be equal to the dealer's largest month's purchases from Florida producers, not greater than $100,000 or less than $3,000. The license fee ranges from $65 to $265 depending on the volume of business transacted by the dealer.
The bond or certificate of deposit is in place to establish the financial responsibility of the dealer and to assist in the final payment of the product. The License and Bond Law currently covers all agricultural products except tobacco, sugar cane, and tropical foliage. Citrus is also exempt because citrus dealers operate under the Florida Citrus License and Bond Law.
Exceptions to the provisions of the Law are:
- Dealers who pay for their purchases with cash currency at the immediate time of purchase.
- Growers or groups of growers selling their own product.
- Dealers who operate as bonded licensees under the Federal Packers and Stockyards Act.
- Retail operations that purchase less that $1,000 per month from Florida producers.
Claims Against Dealers
The Law also requires that dealers account quickly and accurately for the products they purchase or handle for Florida producers. If a producer or his agent feels that he has not been properly paid for his product, he can file a claim with the Department against the dealer's license. The Department may issue a final order in the case after presentation of all the facts in the matter.
If it is found that the dealer does not comply with the order to pay, then the Department will order the bonding company to pay. In cases where the bond is not large enough to pay all claims against the dealer, the funds are distributed pro rata to the claimants. Claims must be filed with the Department within six months from the date of sale and must involve at least $250.
Updating the Law to Reflect the Evolving Marketplace
The Department of Agriculture and Consumer Services, recognizing that the marketplace and methods of conducting business have changed a great deal over the past 60 years, hosted a series of meetings during the summer of 2004 with representatives from various sectors of Florida's diverse agricultural community. The group reviewed proposed revisions to the License and Bond Law with the goals of developing a modern Law reflective of the needs of today's agricultural industry and fostering within the agricultural community a sense of solid equity and ownership in the new legislation.
This joint industry and Department review of the License and Bond Law coincided with an interim project of the Agriculture Committee within the Florida House of Representatives. Legislation is currently pending to amend the License and Bond Law. These changes will offer growers and dealers more protection.
To track the proposed changes, log on to the Official Internet Site of the Florida Legislature at http://www.leg.state.fl.us/.