On May 16, 2020 Governor Walz signed legislation removing the requirement of licensure and bonding of Wholesale Produce Dealers. No new Wholesale Produce Dealers licenses are being created at this time. If you are currently licensed this change will impact you beginning July 1, 2020. Your current license is valid through June 30, 2020 and requires you to maintain a bond or irrevocable letter of credit through that date. Beginning July 1, 2020 licenses and bonds will no longer be required to purchase produce in wholesale lots for resale, no action with our office is needed. If your business utilizes an Irrevocable Letter of Credit in lieu of a bond we can release those at your request following the requisite 60 day waiting period, which would expire August 30, 2020.
The change to Minnesota Statute Chapter 27 only impacts the licensure and bonding of entities, the law continues to protect sellers of produce through the dealer trust, which prioritizes seller’s claims in the event of bankruptcy or insolvency. If you have questions or need clarification as to how this change impacts your business, please do not hesitate contacting us.
The Wholesale Produce Dealers Act is designed to provide financial protection to Minnesota producers, farm marketing cooperatives and licensed dealers who do not receive payment after selling their produce.
As part of the licensing process, wholesale dealers must obtain a surety bond that can be used for reimbursement if payment is not made. In addition to the bond and trust claims described below, the Wholesale Produce Dealers Act provides for mediation and other protections under the law.
Who Needs To Be Licensed?
Any wholesale dealer or food processor who purchases or contracts with other Minnesota dealers or farmers for any of the following products needs to be licensed as a Minnesota Wholesale Produce Dealer
- Fresh fruits and vegetables
- Milk and cream and products manufactured from milk and cream
- Poultry and eggs
Retailers, Agents or Brokers:
- Retailers who purchase more than $500 per month directly from Minnesota farmers
- Brokers or agents who handle or deal in produce with a Minnesota dealer or farmer for a commission or fee
Farmer-owned cooperatives do not need to be licensed as Minnesota Wholesale Produce Dealers if 75 percent of the cooperative's business is with members or stockholder patrons.
Wholesale Produce Dealers may also need to obtain a wholesale food processor/manufacturer license through our Food Safety Division at 651-201-6027
How To Obtain a License
Print and fill out the Application for License as a Wholesale Produce Dealer form and submit it to the Minnesota Department of Agriculture (MDA) along with a check for the license fee. After the application is received, the amount of the bond will be determined by the MDA, based on the dollar amount of the dealer's produce purchases. Once the bond value is determined the applicant needs to have the Wholesale Produce Dealers bond form completed by an insurance company for the specified amount. After the completed bond form is returned to the department, the Wholesale Produce Dealers License will be issued.
When do I renew my license?
The licensing period is July 1st - June 30th with an annual renewal. A renewal application will be mailed to you in May before your license expires and it must be returned by July 1st or late fees will apply. If you think your renewal may have been lost in the mail please contact us, we will gladly resend the renewal application. Please do not print out and send a new application from this page as it may cause a delay in receiving your license!
Who currently holds a license?
Before a seller enters into an agreement with a buyer, he may want to check the online list of licensed dealers to make certain the buyer is licensed and bonded. This provides the seller the protection of the Wholesale Produce Dealers Act in the event of nonpayment.
How to File a Bond Claim
A Wholesale Produce Dealers Bond Claim must be filed within 40 days after the due date for payment. If there is no due date, produce must be paid for within 50 days after the date of transaction. The claim and copies of invoices or other proof of payment owed should be sent to:
- Minnesota Department of Agriculture
Fruit, Vegetable, and Grain Unit
625 North Robert Street
Saint Paul, Minnesota 55155-2538
The department will verify the claim and payment will be made directly from the bond insurer. If the total amount of all claims exceeds the amount of the bond, payment will be made on a pro rata basis.
Wholesale Produce Dealers Trust
The Wholesale Produce Dealers Act creates a trust in the dealer's produce, products of produce, accounts receivable and proceeds. This is another way that a seller can seek reimbursement from the buyer. This trust operates like a lien against the dealer's property and takes priority over security interests others may have. The seller must file a claim with the following entities:
- Dealer who owes the money
- Wholesale Produce Dealers Program, Minnesota Department of Agriculture
- Minnesota Secretary of State
The trust claim must be filed within 40 days after the due date for payment. If there is no due date, produce must be paid for within 10 days. In that case, a claim must be filed within 50 days after the date of the transaction. This type of claim is resolved in court.