Grain Dispute Case Moves to Higher Court

Dispute over failed elevator with a bond in North Dakota and facilities in two states will be reviewed by North Dakota supreme court.

Dow Jones is reporting on the decision by the North Dakota Supreme Court to decide whether grain elevator bonding laws cover farmers who haul their crops outside the state. Some industry officials say the case could put producers' financial safeguards in jeopardy.

The case involves a farmer who worked with an elevator - Minnesota Grain - that went bust in March 2007. The elevator, based in Afton, Minn., operated warehouses in Rhame, N.D., and East Grand Forks, Minn. The North Dakota farmer delivered grain to the East Grand Forks location and weren't paid.

North Dakota law required that the elevator carry a $100,000 bond to compensate farmers if the company went broke. However, the state refused to consider the farmer's claim against the bond, saying that it only covered grain deliveries to the North Dakota elevator facility.

A district judge upheld the state commission ruling. However, the state supreme court is hearing arguments in the case now. The attorney for the farm family argues that they should be entitled to be compensated by the bond required in North Dakota, noting there is not exception in state law regarding an exclusion for receipts based on grain delivered out of state.

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