A lawyer representing farmers and elevators who have contracts to sell grain to ethanol plants that’re going through bankruptcy says Iowa lawmakers could do one "simple" thing to help in the future.
Attorney Don Swanson represents individuals and businesses who had contracts to deliver corn to VeraSun plants throughout the Midwest.
"The analogy we used is that in a $1.5 billion case, the individual farmers and elevators would be like a bunch of gnats flying around the debtor and they’d be ignored — other than to swat them away," Swanson says. "…What we were trying to do is have some joint and some concerted action so is could seem a little more like a wasp –somebody you had to pay attention to and deal with and recognize."
Swanson testified this afternoon before the Iowa House Ag Committee, and he recommended a change in Iowa law to address the uncertainty faced by farmers who signed contracts to deliver grain to VeraSun, as there are no guarantees VeraSun will pay — and it’s difficult to maneuver the fine print and nullify the contracts. "It makes some farmers pine for the old days when all you had to worry about was fluctuating commodity prices," Swanson said.
Swanson, though, warned wholesale changes in state law probably cannot be made to benefit farmers and elevators who have contracts to sell VeraSun corn. "It would be a difficult task because there’s an interrelationship of a number of different laws," Swanson said. "…All these laws fit together and one seemingly minor change in one of them can have rippled effects throughout and a bunch of unintended consequences, so there’s a necessity about being careful and judicious about how you go about doing anything like that."
Representatives of VeraSun met last Wednesday in Omaha with over 200 corn suppliers who had contracts to deliver grain to VeraSun plants. Click on the audio link below to isten to all of what Swanson had to say today.