By MATEUSZ PERKOWSKI
The Oregon Department of Agriculture has suspended the license of a grass seed dealer for the first time under a revised version of the state's "slow pay-no pay" law.
The agency suspended the license of Western Production, Inc., of Woodburn, Ore., for failing to timely pay a farmer about $18,500 for roughly 30,000 pounds of tall fescue seed.
The company ceased operations in November 2012 and informed ODA that it was highly unlikely to pay unsecured creditors, according to an agency document.
"We just basically went broke, is my only comment," said Randy Sonnen, who held the license for Western Production, Inc.
Unless Sonnen rectifies the situation, ODA can refuse to provide him with a license if he tries to start another company, said Ron Pence, operating manager of its commodity inspection division.
"We as an agency don't have to issue another seed dealer's license," he said.
The ODA can also refuse to provide licenses to officers in the company, though they can appeal to the agency to consider such applications if they have a valid argument they weren't culpable for non-payment, Pence said.
In 2011, the Oregon legislature passed a law that required dealers to pay farmers for grass seed within certain time frames, depending on whether they had contracts.
Before the law was passed, the ODA could only suspend dealer licenses if they violated contractual terms. However, many contracts with farmers were too ambiguous to be enforceable.
"This law has really tightened it up," said Randy Black, regulatory specialist for the agency.
Aside from Western Productions, Inc., there haven't been any formal complaints against seed dealers since the law went into effect, Black said.
Complaints against seed dealers peaked in 2009, when 22 farmers formally sought ODA intervention over delayed payments.
The situation has improved due to dealers' awareness of the revised "slow pay-no pay" law, as well as recovering demand for grass seed, Black said.
"The economy has come around and there has been improvement," he said.
Although Western Productions, Inc., is no longer operational, the suspension is symbolically important, said Mark Simmons, executive director of the Oregon Grass Seed Bargaining Association.
"I think this is an encouraging sign," he said. "The law has enough teeth to make it enforceable, whereas before our legislation it just didn't. ... It's important to know the law can be enforced."