Add §§256-c & 256-d, Ag & Mkts L; amd §74, Coop Corps L
Establishes a dairy farmers' bill of rights; specifies prohibited unfair trade practices which have the purpose of intentionally impairing a producer's freedom to bargain collectively with other producers in the marketing of the producer's product; provides that the commissioner of the department of agriculture and markets shall take action to restrain such violations upon the application of an association of producers; increases the limit on damages for encouraging or permitting delivery of products in violation of marketing agreements.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5533
SPONSOR: Lemondes TITLE OF BILL:
An act to amend the agriculture and markets law and the cooperative
corporations law, in relation to establishing a dairy farmers' bill of
rights
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to provide dairy farmers affiliated with
associations of producers with protection from milk dealers who engage
in interference with the farmers' right to join or remain in an associ-
ation of producers. This would be accomplished by two amendments to
existing laws. First, the Agriculture and Markets Law would be amended
in relation to the business relationships between milk dealers and farm-
ers, to delineate what constitutes an unfair practice by a milk dealer.
This bill also provides for the Commissioner of the Department of Agri-
culture and Markets to take action to restrain such violations upon the
application of an association of producers.
Second, this bill strengthens the Cooperative Corporations Law by
increasing the penalties to handlers per contract violation from $100 to
a maximum of $10,000, while extending the law to also cover the employ-
ees of these dealers (handlers) who are more likely to engage in these
unfair practices.
SUMMARY OF SPECIFIC PROVISIONS:
A new section 256-C is added to the Agriculture and Markets Law entitled
"Unfair Practices." This new section is similar to the Federal "Agricul-
ture Fair Practices Act": (7 U.S.C. 2303) but expands and further
defines prohibited practices by milk dealers in their business relation-
ship with dairy farmers.
Enforcement of these provisions is by the Department of Agriculture and
Markets. Specifically, this measure makes it unlawful for any milk deal-
er or employee to engage in the following practices: 1) Coercion; 2)
Breach of Contract; 3) Bribery; 4) Refusal to Deal; 5) Falsehood; and 6)
Conspiracy.
Section 74 of the Cooperative Corporations Law is amended to expand the
list of those individuals who may not engage in encouraging or permit-
ting violations of marketing agreements, to include "agent or employee"
in the existing "officer or manager" listing. Also, this section is
further amended by increasing the penalty for each such violation from
$100 to $10,000 for each contract.
JUSTIFICATION:
New York State Agriculture and Markets Law recognizes the need for and
supports the affiliation of farmers in associations of producers,
intending to encourage farmers to band together for the common good of
all farmers. This was made state policy in the following manner: "It is
the policy of this state to promote, foster, and encourage the intelli-
gent and orderly marketing of milk through producer owned and controlled
cooperative associations..." Section 258-k.
"Unfair, unjust, and destructive demoralizing trade practices have been
and are likely to be carried on in the production and sale... of milk
and that it is a matter of public interest and for the public welfare
for the state to promote the orderly exchange of commodities."
Section 74 of the Cooperative Corporations Law is currently the only
section of the state law which pertains to the business relationships
between dairy farmers who are members of associations of producers and
milk dealers. This section of law was enacted in 1926, and has not been
amended in the 67 years since its enactment. First, the penal sum of
$100 does not present the same deterrent value today as it did in 1926.
The value of the production of each farmer to a dealer is far in excess
of that amount, which means that the intended deterrent effect of that
penalty is virtually meaningless to a dealer today.
Secondly, in 1926 there were great numbers of dealers in the market-
place, and they usually engaged in direct field level negotiations with
farmers or had these arrangements handled by a manager. Today, there are
fewer but larger dealers in the market, and they have business dealing
handled by agents or other employees. As such, this section must be
updated to recognize this change. Additionally, this bill expands and
strengthens the prohibited practices section of the "Federal Agriculture
Fair Practices Act" and places it into state law. The federal law has
been ineffective in stopping unfair practices by milk dealers in New
York State.
The reason for placing this law into state law is two fold: (I) when
combined with the aforementioned state policy and a documented complaint
of such activity by an association of producers, this statute would give
clear guidelines to the New York State Department of Agriculture and
Markets for actions to be taken by the Department to restrain such
violations; (2) Federal enforcement of this provision has been limited,
despite much more specific guidelines afforded the federal government
with this statute. Therefore, the addition of this provision to state
law will specifically delineate prohibited practices and provide for
expedited action by the state against such violations, while expanding
and strengthening the currently applicable statute.
PRIOR LEGISLATIVE HISTORY:
2019/2020 referred to agriculture
2015/2016 held for consideration in agriculture
2013/2014 referred to agriculture
2011/2012 held for consideration in agriculture
2009/2010 A7284 - held for consideration in Agriculture
2005/2006 A6411 - Finch
2003/2004 A3937 - Finch
2001 - A4907; referred to Agriculture
2000 - A.9776
1999 - Fessenden
1997-98 - A.3141; held in Agriculture
1995-96 - A.2147; referred to Agriculture
1993-94 - A. 6010/S.3564; referred to Agriculture
1992 - A.3224 (Davidsen); Referred to Agriculture; 5.2086 (Kuhl);
Starred; Committed to Rules.
1990 - A.130-B (McCann); Held in Agriculture; S. 1688-A (Kuhl); Passed
the Senate.
1989 - A.130-B (McCann); Amended and recommitted to Agriculture; S.
1688-A; Passed Senate.
1988 -- A similar Bill (A. 10802 (Bragman)/S. 9166 (Kuhl) was vetoed by
the Governor.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
5533
2021-2022 Regular Sessions
IN ASSEMBLY
February 19, 2021
___________
Introduced by M. of A. LEMONDES -- read once and referred to the Commit-
tee on Agriculture
AN ACT to amend the agriculture and markets law and the cooperative
corporations law, in relation to establishing a dairy farmers' bill of
rights
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The agriculture and markets law is amended by adding two
2 new sections 256-c and 256-d to read as follows:
3 § 256-c. Dairy farmers' bill of rights; declaration of policy. The
4 expressed intent of the agriculture and markets law and the policy of
5 this state is to foster and encourage the marketing of milk through
6 producer owned and controlled cooperatives. The orderly marketing of
7 milk for the benefit of farmers, milk dealers, and consumers is enhanced
8 when milk producers are free to make an independent uncoerced decision
9 regarding their participation in cooperative associations, as authorized
10 by state and federal law. Interference in the exercise of this free
11 right of choice is contrary to the public interest. For this reason, the
12 legislature finds that the public interest requires that there be a
13 specification of prohibited unfair trade practices which have the
14 purpose of intentionally impairing a producer's freedom to bargain
15 collectively with other producers in the marketing of the producer's
16 product.
17 For purposes of this section, (i) an "association of producers" or
18 "cooperative" shall mean any corporation or association of persons
19 engaged in the production of milk and operating for the mutual benefit
20 of its members in conformity with the requirement of the Capper-Volstead
21 act, and any federation of such corporations or associations, or of such
22 corporations, associations, and individual producers, and (ii) an asso-
23 ciation of producers shall not be considered to be a milk dealer.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09418-01-1
A. 5533 2
1 § 256-d. Unfair practices by dealers. 1. It shall be unlawful for any
2 milk dealer or any of its officers, managers, agents, or employees to
3 intentionally impair a producer's freedom to join or to participate in
4 an association of producers or cooperative by:
5 (a) coercing, through threat of injury to person or property, or to
6 health, safety, business or financial condition, reputation or personal
7 relationships any producer in the exercise of his or her right to join
8 and belong to an association of producers or cooperative;
9 (b) soliciting or requesting any producer to breach a marketing agree-
10 ment or other contractual agreement between the producer and an associ-
11 ation of producers or cooperative;
12 (c) making a loan or gift of money, or of anything else of value, or
13 offering to make such a loan or gift for the specific purpose of induc-
14 ing a producer to refuse or cease to belong to an association of produc-
15 ers or cooperative;
16 (d) refusing to deal with any producer, because of the exercise of the
17 producer's right to join and belong to an association of producers or
18 cooperative;
19 (e) making false reports about the finances or management of an asso-
20 ciation of producers or other milk dealers in reckless disregard of the
21 truth or knowing that such statements are untrue and that there is a
22 reasonable likelihood that such statements will impair a producer's
23 right to make an independent decision to belong to an association of
24 producers or cooperative; and
25 (f) conspiring, combining, agreeing, or arranging with any other
26 person to do, or aid and abet the doing of, any act made unlawful by
27 this section.
28 2. For purposes of this section: (a) an "association of producers" or
29 "cooperative" shall mean any corporation or association of persons
30 engaged in the production of milk and operating for the mutual benefit
31 of its members in conformity with the requirements of the Capper-Vol-
32 stead act, and any federation of such corporations or associations, or
33 of such corporations, associations, and individual producers, and (b) an
34 association of producers shall not be considered to be a milk dealer.
35 3. Nothing in this section is intended to prevent bargaining between
36 milk dealers and producers or associations of producers with respect to
37 price or any other terms of purchase or handling of milk in a course of
38 dealing not proscribed by this section, nor to prevent producers from
39 requiring that payment be made through an association of producers or
40 cooperative.
41 4. Whenever the commissioner has reason to believe a violation of this
42 section has occurred, the commissioner may commence such judicial
43 action, or institute such investigation or proceeding and issue an order
44 based thereon, as is provided by this article or article three of this
45 chapter; provided, however, that the commissioner shall take no action
46 against a milk dealer under section two hundred fifty-eight-c of this
47 article for conduct which is a violation of this section unless such
48 dealer is at the time of such conduct subject to a final administrative
49 or judicial order which prohibits such conduct by such dealer; and
50 provided further that nothing contained in this section shall impair or
51 delay the private right of action created by section seventy-four of the
52 cooperative corporations law for any violation of that section.
53 § 2. Section 74 of the cooperative corporations law is amended to read
54 as follows:
55 § 74. Liability for damages for encouraging or permitting delivery of
56 products in violation of marketing agreements. Any person, firm or
A. 5533 3
1 corporation who solicits or persuades or aids or abets any member of any
2 cooperative corporation incorporated under or subject to this chapter to
3 breach his marketing contract with the corporation by accepting or
4 receiving such member's products for sale, marketing, manufacturing or
5 processing thereof contrary to the terms of any marketing agreement of
6 which said person or any officer [or], manager, agent or employee of the
7 said corporation has knowledge or notice, shall be liable in the penal
8 sum of [one hundred] not more than ten thousand dollars for each
9 contract, to the cooperative corporation aggrieved in a civil suit for
10 damages; and such cooperative corporation shall be entitled to an
11 injunction against such person, firm or corporation to prevent further
12 breaches.
13 § 3. This act shall take effect immediately.
