Harman successful in shepherding change to dairy law

The following information was released by the office of State Senator Tom Harman (R-CA-35).

Senator Tom Harman (R-Huntington Beach) announced that Senate Bill 592, a measure to clarify ambiguities and remove some impediments in the California Dairy Lien law, has been signed into law.

“California’s Dairy industry has been struggling incredibly since 2008,” said Harman. “The economic trauma to the entire industry has drawn attention to the ambiguities in the Dairy Lien process. This bill represented almost two years of negotiations with industry, feed providers, banks and other stakeholders to come up with a process that clarifies the lien process. I am pleased the Governor has signed it into law.”

California Dairy industry has been in crisis for nearly 24 months. This crisis has brought industry stakeholders to review practices including how grain and feed suppliers provide credit to dairy farmers as well as other livestock producers. The Dairy Feed Lien law had not been amended since it was placed in statute 22 years ago.

The California dairy industry has lost $2 billion in equity since the collapse of the market in the fall of 2008. Many feed suppliers maintained service to dairies as long as it has been viable, but have also had significant capital losses during this time. As some dairies have become “distressed assets” or even filed for bankruptcies, this little known dairy lien law became recognized – with various applications.

California Grain and Feed Association undertook a significant process of analyzing and reviewing the law and its deficiencies, as well as industry business practices to better understand what had gone wrong and what could be adjusted. Several technical and substantive elements of the lien law were identified and corrected in this bill.

SB 592 was sponsored by California Grain and Feed Association.