Dealer FAQ

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The Colorado Farm Products Act is law designed to protect sellers of farm products. It is a system of licensing and bonding to assist the seller in getting paid.

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The law requires that dealers and brokers license and bond with the Department of Agriculture. When a complaint is filed against a licensee, the Department investigates the complaint, and if the complaint is deemed to be valid, a claim will be made against the licensee's bond.

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No, your claim may exceed the amount of the licensee's bond, and there may be competing claims for the bond. In that event, you will receive a pro-rata share of the bond proceeds. This will not prevent you from seeking relief in the court system.

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No, there are two exceptions: the small volume dealer, and the cash buyer. The Act provides for the licensing of small volume dealers, who purchase less than $20,000 of farm products in any one year, with no one transaction exceeding $2,500.

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Anyone or any company that is purchasing Colorado farm products for the purpose of resale or processing.

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A farm product is an unprocessed product of the soil, livestock, milk, honey, and hay. It does not include poultry, nursery stock, timber products, commodities*, or livestock purchased and not resold or processed within 90 days.

*Commodities are grain and dry edible beans

 
 

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A dealer that is operating without a license is committing a class 6 felony, and is subject to prosecution under the criminal statutes.

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Restaurants, retail grocery stores, small feedlots, and any person or company that is purchasing farm products for their own consumption need not license.

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They are covered under a similar act called the Commodities Act.

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Document the transaction by obtaining evidence of sale. Scale tickets, bills of lading, warehouse receipts, or delivery receipts can be used.

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Yes, one of the major problems that we incur in trying to settle disputes is trying to determine what the buyer and seller agreed to. Get a contract in writing.

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No, a plain handwritten contract explaining the terms of the sale can be used.

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  • Who Is The Buyer?
  • Quantity Sold
  • Quality Agreed Upon
  • Sale Price
  • Method Of Payment
  • Use Of The Farm Product
  • Where And When Does Title Transfer