* "Broker" means any
person engaged in the busines of soliciting or negotiating the sale of any perishable
agricultural commodity or hay, straw or grain or any one or more of them on behalf of the
"Commision merchant" means any person engaged in the business of soliciting or receiving any perishable agricultural commodity for sale on commission on behalf of the grower thereof.
"Dealer" means any person engaged in the business of buying any agricultural commodity from the grower thereof for the purpose of shipping or for sale, resale or manufacture. "month" means calendar month
New Jersey Department of Agriculture
LICENSING & BONDING
Protection Since 1930
The Licensing and Bonding program, established in 1930 by the State Legislature and the State Board of Agriculture, is administered by the New Jersey Department of Agriculture's Division of Regulatory Services.
This program provides New Jersey farmers with a means of receiving compensation for perishable agricultural commodities sold to licensed buyers who default. Credit buyers so fruits, vegetables, poultry products, hay, grain and straw must be licensed and bonded.
This state program bans unfair and fraudulent practices in the marketing of fresh and frozen fruits, vegetables and other perishable agricultural commodities, and establishes penalties for violations.
Licensing: A Factor in Enforcement
The New Jersey Department of Agriculture requires the licensing of commission merchants, dealers and brokers and their agents handling perishable agricultural commodities in intrastate commerce. Dealers can be shippers, wholesalers, certain retailers, truckers and processors who buy directly from New Jersey farmers on a credit basis.
Farmers who sell their won perishable agricultural commodities do not need a license unless they buy and sell products grown by other farmers. License applications are due on or before November 1 of each calendar year, along with a $30 application fee.
Licenses are issued upon receipt of a bond or security in an amount that will cover buyers' transactions with New Jersey farmers.
The penalty for operating without a required license can be as much as $3,000 per day for each day of such operation. Other violations of this law can result in fines of $100 for the first offense and $500 for each subsequent offense.
Good Business Conduct: The NJDA Way
The goal of the Licensing and Bonding program is to help guarantee good business conduct. Through this program, the New Jersey Department of Agriculture protects the best interests of both buyer and seller by requiring them to comply with the terms of their agreements.
Sellers must ship the quantity and quality of product specified. Buyers must accept shipments which meet agreed upon specifications and must pay promptly after acceptance. Prompt payment means ten days unless other prior agreements exist.
Unfair Trade Practices
The trade practices defined as unfair by the NJDA are:
Maintenance of Records
NJDA requires every licensee to prepare and maintain records which correctly disclose all transactions involving his business. The regulations specify the basic records that are to be kept depending on the nature of the business.
Complaints that the Licensing and Bonding law has been violated may be filed with the NJDA. Any farmer may file complaints against a person or firm licensed to do business as a dealer, broker or commission merchant of perishable agricultural commodities in New Jersey.
Complaints must be filed within 90 days of the day payment was due. Please understand that the sooner complaints are filed, the easier it is to arrange an informal settlement.
Completed claim forms are mailed to NJDA along with an explanation of the dispute and copies of all relevant papers. After records are reviewed, the claim is verified. An effort is then made to bring all involved parties together to arrange informal settlement. NJDA resolves most complaints this way, with savings to everyone involved. No fee is issued for settling complaints.
Formal Complaints - Claims
Whenever a complaint cannot be settled informally and the farmer has not been paid, a claim action will be taken against the surety bond, letter of credit, certificate of deposit or government bond held by the NJDA as the buyer's security during the license year. After the verified amount owed to the claimant is received by NJDA, a check in this amount will be issued to the claimant.
Avoiding Complaints and Claims
You can avoid complaints and claims in a number of ways.
Initially check the financial statures and reputation of any person you plan to do business with. Also check to see that they are licensed by NJDA. Most persons with a good financial rating pay their bills on time. An NJDA license is not a guarantee of any person's financial status, but it does enable action to be taken. NJDA can take no action against unlicensed dealers except to fine them for operating without a license.
Second, when you as the seller agree to the sale, get all the terms of the agreement down in writing with a copy to all involved in the sale. This need not be overly wordy, just an accurate description of the transaction. In this way, misunderstanding of prices or terms of the sale can be addressed quickly. Unless the transactions are fully stated in writing, you may not gave the evidence you need to prove your claim in a dispute.
COMMISSION MERCHANTS, DEALERS, BROKERS, AND AGENTS
(Article 2, Chapter 11, Title 4, of the Revised Statutes of New Jersey, as amended and supplemented.)
New Jersey Department of Agriculture
Division of Regulatory Services
Trenton, NJ 08625
An act providing for the licensing and bonding of
commission merchants, dealers, and brokers, and for the licensing of their agents, and
prescribing penalties for violations of the provisions thereof. Amended February 27, 1978.
BE IT ENACTED by the Senate and General Assembly of the State of New Jersey:
4:11-15. DEFINITIONS. As used in this article.
"Agent" means any person receiving, buying, soliciting or negotiating the sale of any perishable agricultural commodity or hay, stray or grain or any one or more of them from the grower thereof for or on behalf of any commission merchant, dealer or broker.
"Agricultural commodity" means any perishable
agricultural commodity or had, straw or grain or any one or more of them, as the case may
"Broker" means any person engaged in the business of soliciting or negotiating the sale of any perishable agricultural commodity or hay, straw or grain or any one or more of them on behalf of the grower.
"Commission Merchant" means any person engaged in the business of soliciting or receiving any perishable agricultural commodity for sale on commission on behalf of the grower thereof.
"Dealer" means any person engaged in the business of buying any agricultural commodity from the grower thereof for the purpose of shipping or for sale, resale or manufacture.
"Eggs" means avian eggs of the kind produced and used for human food including the eggs of chickens, turkeys, ducks, geese and guineas, but not those sold or resold for purposes of laboratory or biological uses.
"Grower" means any person engaged in the business of growing or producing any agricultural commodity in this State, or any agricultural co-operative association organized pursuant to the provisions of chapter thirteen of this Title (4:13-1 et seq.)
"Perishable agricultural commodity" means any fruit or vegetable of every kind, including those frozen or packed in ice, and any poultry product.
"Poultry product" means live poultry and eggs as defined in this act, when purchased in wholesale quantities from a grower, or his agent, or a marketing association for sale or resale for human consumption or hatching purposes.
"Poultry" means domestic fowl. including all marketing classifications of chickens, turkeys, ducks, geese and guineas not sold for show or breeding purposes.
"Secretary" means the Secretary of Agriculture.
"Board" means the State Board of Agriculture.
4:11-16. Article inapplicable to certain transactions. This article shall not apply to any transaction in which the grower receives at the time of the transaction full payment of the amount due him, or to any duly incorporated agricultural co-operative association in its dealings with its members.
4:11-17. Provisions inapplicable to certain co-operative associations. Nothing contained in this article shall be construed to apply to any agricultural co-operative association which deals only with its members and organized pursuant to the provisions of chapter 13 of this Title (s. 4:13-1 et seq.), or the provisions of an act entitled "An act to provide for he incorporation and regulation of co-operative agricultural associations, either with or without capital stock," approved February twenty-eighth, one thousand nine hundred and twenty-four. Cooperative agricultural associations exempted by this section shall register with the Department of Agriculture and be issued exempt Agent identification cards.
4:11-18. Necessity of license. No person shall engage in or carry on the business of commission merchant, dealer or broker unless he is duly licensed as provided in this article.
4:11-19. Application for license. A
person before engaging in such business shall on or before November 1 of each year, file
an application for a license with the secretary, on a form prescribed by him, and pay an
application fee of $30.00 which shall not be returned if the license is not granted, for a
license to transact such business.
The application shall state the nature of the business, the kinds of agricultural commodities which the applicant proposes to handle and if they be perishable agricultural commodities then the kinds of perishable agricultural commodities which he applicant proposes to handle, the full name of the person applying for the license, and if the applicant be a firm, association, partnership, or corporation, the full name of each member of the firm, partnership or association, or officers of the corporation, and the name of the local agent of the person, firm, association, partnership or corporation, the municipality and street address, if any, or post-office address, where the business is to be conducted, and such other facts as the secretary shall prescribe.
The applicant shall satisfy the secretary of his character, financial responsibility and good faith in seeking to engage in the business.
4:11-20. Bond or deposit for protection of creditors; securities in lieu of bond; additional bond. A license shall not be issued unless and until the applicant has filed a good and sufficient surety bond executed in favor of the secretary in his official capacity, for the benefit of all growers with whom the applicant shall transact business, by a surety company duly authorized to transact business in this state in the sum of $3,000.00, conditioned on a yearly formula adopted by regulations of the Department. The bond shall be executed upon a form prescribed by the secretary and shall be subject to his approval as to form and sufficiency. The applicant may in lieu of the bond deposit with the secretary securities approved by the Department in an amount equal to the sum secured by the bond required to be filed as herein provided; or any in the alternative, obtain and deposit with the secretary an irrevocable letter of credit to equal the amount of the bond. Such securities or letters of credit so deposited with the secretary shall constitute a separate fund and shall be held in trust for and applied exclusively to the payment of claims arising under the provisions of this article against the licensee making such deposit for the period for which such license is issued. All proceeds from surety bonds, money or securities shall be distributed to the grower-creditors by the secretary or returned to the licensee if no claims are made. The Department shall establish a yearly maximum for all such bonds, securities, or irrevocable letters of credit which shall not exceed $50,000.00. The secretary may require a licensee to file an additional bond, after a hearing on any complaint against the licensee, but the total amount of all bonds shall not exceed $100,000.
4:11-21. Issuance of license; expiration. Upon the filing and approval of the application and bond or securities, as the case any be, the secretary shall thereupon issue to the applicant or his agent a license entitling the applicant or the agent to conduct the business of receiving, buying, soliciting or negotiating the sale of perishable agricultural or other agricultural commodities on behalf of the grower, of the kind or kinds, and at the place named in the application, which license shall expire on December 31 next following its date of issuance.
4:11-22. Designation and licensing of agent. No agent shall receive, buy, solicit or negotiate the sale of any agricultural commodity in this State on behalf of any commission merchant, dealer or broker unless such agent has been designated by a duly licensed commission merchant, dealer or broker to so act and unless such commission merchant, dealer or broker has notified the secretary in his application for license or given notice in writing of such designation and has requested the secretary to issue to the agent an agent's license.
4:11-23. Investigation of record of applicant or
The secretary or an assistant whom he any designate may investigate upon the verified complaint of any interested person, or upon the verified complaint of pursuant to the provisions of chapter 13 of this Title (s. 4:13-1 et seq.). or of his own motion, the record of any person applying for or holding a license as commission merchant, broker, dealer or agent, and for such purpose may examine the ledgers, books of account, memoranda or other documents of any such person and may take testimony thereon under oath, but information relating to the general business of any such person, disclosed by the investigation and not relating to the immediate purpose thereof, shall be deemed of a confidential nature by the secretary or assistant.
4:11-24. Hearing by secretary when verified
When a verified complaint is filed with the secretary, as mentioned in section 4:11-23 of this Title, with respect to any person applying for or holding a license, the secretary shall conduct a hearing thereon and shall furnish such person with a copy of the compliant and a notice of the time and place of hearing, which notice shall be served either personally or by registered mail directed to his place of business or last known residence address, postage fully prepaid, at least ten days prior to the time fixed for hearing.
In the hearing of any complaint the secretary or assistant whom he may designate may sign and issue subpoenas, administer oaths, examine witnesses, take depositions, receive evidence and require by subpoena the attendance and testimony of witnesses and the production of such accounts, records and memoranda as may be material for the determination of the matter alleged in the complaint.
The secretary or assistant whom he may designate shall render a decision either dismissing the complaint or specifying the facts which he deems established at the hearing.
4:11-25. Hearing before revocation of license.
Before any license is revoked the secretary shall give the licensee at least ten days'
notice of the time and place of hearing before the secretary and shall furnish him with a
copy of the complaint against him, which complaint and notice shall be served upon the
licensee in the manner provided in section 4:11-24 of this Title.
At the time and place fixed for hearing the secretary shall receive evidence, administer oaths, examine witnesses and hear the testimony and shall thereafter file an order either dismissing the proceeding or revoking the license.
4:11-26. Grounds for refusing or revoking
license. The secretary may refuse to grant or may revoke a license
for the following causes:
a. Where the licensee has made a general assignment for the benefit of creditors or has been adjudged a bankrupt or is insolvent or where a money judgment has been secured against him, upon which an execution has been returned unsatisfied;
b. Where there has been a failure to account for or make prompt settlement for any agricultural commodities received, bought, solicited or negotiated;
c. Where any false statement has been made as to condition, quality or quantity of agricultural commodities received or bought or where the sales were negotiated or held for sale on commission
when the same might have been known on reasonable inspection;
d. Where there has been a continual course of dealings of such a nature as to satisfy the secretary of the inability or unwillingness of the licensee, or his agent, to properly conduct the business of receiving, buying, soliciting or negotiating the sale of agricultural commodities on behalf of the grower thereof;
e. Where the licensee has been duly required to file an additional bond and has failed to do so;
f. Where there has been a continued and persistent failure to keep the records required by the secretary or by law; or where there has been a refusal on the part of the licensee to produce books, accounts or records of transactions in carrying on the business for which such license is granted..
4:11-27. Review of refusal or revocation of license. The action of the department in refusing to grant or in revoking a license shall be subject to review by the Superior Court in a proceeding in lieu of prerogative writ. Whenever any proceeding is taken to review a revocation the license shall be deemed to be in full force and effect until the final determination of such proceeding, if the fee for the license has been paid, subject, however, to the order of the said court.
4:11-28. Filing with secretary of claims against
Upon default of any licensee in the payment of any money due to any grower, the grower may file with the secretary, upon a form prescribed by him, a verified statement of his claim. If the grower has reduced his claim to judgment a transcript of the judgment shall be filed with the secretary. Such statement may be filed at any time during the period of the license and within ninety days from the termination of such period, for debts contracted during such licensed period.
4:11-29. Action; judgment enforceable against
sureties or securities. The secretary shall audit claims properly filed
and determine the amounts due all such creditors. Whenever an audit and hearing determine
a claim to be valid and there is a refusal to pay, demand shall be made upon the surety
after 90 days. During the 90 days the secretary shall publish the non-payment of the claim
each week in a newspaper in the county where the licensee resides as well as in all
counties where transactions may have taken place in New Jersey with a request for all
claims. All claimants will be required to file claims before expiration of said 90 days
and demand is made on surety. During the 90 days the license of the dealer is revoked and
can only be renewed after an new application and hearing. If the surety shall not make
payment of the amount so demanded, upon the expiration of 90 days from the termination of
the license period, the secretary shall bring an action at law to recover for the surety
on said bond the amount necessary to satisfy such claims or such apart thereof as
shall equal the amount of the bond, which action may be instituted by the secretary in his
official capacity as such on behalf of said claimants, but without naming them as
plaintiffs or defendants therein. The moneys obtained from the sale of said securities or
by action against the surety shall be used for the satisfaction of such claims, and the
secretary shall make distribution thereof to the claimants in accordance with the amounts
determined to be due thereon, and if less than the total amount of said claims shall be so
obtained, distribution shall be made ratably to the creditors according to said amounts.
If a creditor has reduced his claim to judgment, the judgment shall be presumptive proof of the amount due him.
Claims not filed during the license period or within 90 days from the termination of the license period, shall not be received, acted upon or paid and shall not participate in the proceeds of any bond, moneys or securities deposited with the secretary.
The secretary may bring an action in any court of competent jurisdiction against the licensee or surety or sureties on the bond or bonds for the recovery of any money due and owing to a grower or growers as herein-before provided.
4:11-29.1. Unlawful to sign waiver. It shall be unlawful for any person to request a producer to sign any statement, affidavit, assignment, or waiver of any kind which has for its purpose or intent to relieve to any extent whatsoever a dealer, indemnitor or surety company of its full financial responsibility under this article.
4:11-30. Keeping of records. A commission merchant, dealer, broker or his agent shall keep accounts, records and memoranda which shall fully and clearly disclose all transactions involved in his business, including the true ownership of the business by stockholders or otherwise.
4:11-31. Posting of copy of license. A person licensed under the provisions of this article and conducting business under the license shall keep a copy thereof, to be furnished by the secretary, posted I a conspicuous place in or at his place of business and exposed for inspection by any person who may properly make such inspection.
4:11-32. Carrying and exhibiting agent's card. the licensee and each of his agents shall at all times when receiving, buying, soliciting or negotiating the sale of agricultural commodities carry an agent's license which shall be exhibited to growers or to the officers of any agricultural co-operative association which deals only with its members and organized pursuant to the provisions of chapter 13 of this Title (s. 4:13-1 et seq.) when negotiating business with them, or to the secretary or assistant whom he may designate upon request.
4:11-33. Certification by secretary as to license. The secretary shall, upon request, certify whether the records kept by his department show or fail to show the issuance of a license in accordance with the provisions of this article, and such certificate whether made upon request, or made by the secretary for use in proceedings instituted under the provisions of this article, shall be prima facie evidence of the facts therein stated. The fee for the certificate shall be one dollar.
4:11-33.1. Rules and regulations. the board may make such rules and regulations as may be necessary for the proper enforcement of the provisions of this article.
4:11-34. Penalty for violations; jail for
non-payment. A person, who shall engage in the business of commission
merchant, dealer or broker, as defined in section 4:11-15 of this Title, without first
having obtained a license as provided in this article shall be subject to a penalty of not
more than $3,000.00 a day for each day of operation or who shall violate any other
provision of this article shall be subject to a penalty of $100.00 for the first offense
and $500.00 for the second and each subsequent offense, to be sued for and recovered with
costs in the name of the department in the manner provided in Article 1 of Chapter 23 Of
Title (s. 4:23-1 et seq.), and in such proceeding the defendant may be arrested upon the
commencement of the action. Any grower or producer of perishable agricultural commodities,
poultry products or poultry who knowingly sells to, or utilizes the services of, any
unlicensed commission merchant, dealer or broker shall be subject to a penalty of not more
If judgment is rendered for the plaintiff the court shall cause a defendant who shall fail to pay forthwith the amount of the judgment rendered against him, and all costs and charges incident thereto, to be committed to the county jail for a period of not less than five nor more than ninety days for a first offense and not less than ten nor more than two hundred days for the second and each subsequent offense.
7. (New section) Each grower shall have 90 days from the date payment was due to file a claim with the Secretary of Agriculture on forms prescribed by him giving all terms of agreement and amount due. Failure to file within 90 days shall nullify the claim. Alliances may make agreements for deferred payments, but no claims shall be allowed on any such agreement payable beyond December 31 of license year.
8. (New section) The department shall have the power to stop the operation of any person operating in the State of New Jersey without a license as provided by this act. The secretary any order such operations terminated immediately but any person whose operations are stopped shall have 10 days to appeal to the Secretary of Agriculture for a hearing at which the secretary or any person duly appointed by him shall review all the circumstances of the case. The department may enforce this section by summary proceedings through courts of competent jurisdiction. The State Police, the county sheriff or any municipal police are authorized to assist the department in the enforcement of this section.
For applications, claim forms or further information about the NJDA Licensing & Bonding program, please contact:
New Jersey Department of Agriculture
Department of Regulatory Services
Licensing and Bonding Section
Trenton, New Jersey 08625
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