Louisiana Revised Statutes 3:3413 – Hedging requirement, grain dealer’s maximum risk position; appeal from commission action; change of maximum risk position
Terms Used In Louisiana Revised Statutes 3:3413
- Commission: means the Louisiana Agricultural Commodities Commission. See Louisiana Revised Statutes 3:3402
- commodities: means cotton, all agricultural products commonly classed as grain, including rice, rough rice, corn, wheat, oats, rye, soybeans, barley, and grain sorghum, and any other agricultural commodity or other farm product which the commission may, by regulation, declare to be a commodity subject to this Chapter. See Louisiana Revised Statutes 3:3402
- Cotton merchant: means every person, firm, corporation, association, or other legal entity who purchases or contracts to purchase, either directly or through a cotton agent, cotton grown or to be grown by producers in this state. See Louisiana Revised Statutes 3:3402
- Grain: means corn, wheat, oats, rye, soybeans, barley, and grain sorghum. See Louisiana Revised Statutes 3:3402
- Grain dealer: means any person who purchases any agricultural commodities from producers or represents producers in the sale of agricultural commodities. See Louisiana Revised Statutes 3:3402
- Person: means any individual, partnership, company, firm, association, cooperative association, corporation, or any other legal entity engaged in any of the activities regulated under this Chapter. See Louisiana Revised Statutes 3:3402
- Risk position: means the loss potential to the grain dealer resulting from bringing its open position to market. See Louisiana Revised Statutes 3:3402
A. Each grain dealer shall adhere to normal merchandising practices, as determined by the commission, in hedging its obligations. “Normal merchandising practices” means that each grain dealer shall achieve and maintain a relatively even hedge position within a reasonable period of time after each purchase of commodities.
B. In order to determine the risk position of any grain dealer, the commission may require the grain dealer to submit, in addition to the certified financial statement required as a part of the application for licensure, unaudited financial statements in the interim between the annual application for the renewal of the license. No grain dealer may maintain a risk position in excess of thirty percent of its current net worth, provided that the commission may specify a lower maximum risk position for any grain dealer in an amount having a reasonable relationship to that grain dealer’s net worth.
C. Whenever the commission, on the basis of its inspection, examination, or audit of a grain dealer, anticipates a need for the establishment of a maximum risk position of less than thirty percent of the grain dealer’s current net worth, the commission shall notify the grain dealer, as required by Chapter 13 of Title 49 of the Louisiana Revised Statutes of 1950, to appear at a public hearing before the commission and show cause why such lower maximum risk position should not be established by the commission for the grain dealer. The grain dealer shall be allowed to appear in person or be represented by counsel at said public hearing and shall be afforded every reasonable opportunity to present data or arguments in support of its position. The commission shall not establish a maximum risk position of less than thirty percent of any grain dealer’s current net worth prior to a hearing conducted pursuant to by Chapter 13 of Title 49 of the Louisiana Revised Statutes of 1950.
D. The commission may from time to time revise the risk position established for any grain dealer. Whenever the commission proposes to revise the maximum risk position established for any grain dealer, the grain dealer shall be notified and a public hearing conducted as required by Subsection C hereof prior to any change in the maximum risk position established for any grain dealer.
E. Any grain dealer may request in writing at any time that the commission revise the risk position established for his business activities and the commission shall act upon its request at its next regular or special meeting.
F. Any grain dealer aggrieved by any action of the commission in revising its maximum risk position may seek judicial relief as provided by Chapter 13 of Title 49 of the Louisiana Revised Statutes of 1950.
G. No cotton merchant shall be subjected to any type of hedging requirement.
Added by Acts 1982, No. 563, §1, eff. Jan. 1, 1983; Acts 1997, No. 1034, §1; Acts 2009, No. 24, §1, eff. June 12, 2009.