ATLANTA -- A bill to help Georgia cotton growers caught up in a broker's bankruptcy sailed through the state Senate on Tuesday.
Senators voted unanimously to establish an indemnity fund to compensate more than 100 farmers who lost all or part of their 1997 cotton income when a Statesboro, Ga., broker declared bankruptcy. David Prosser has not been charged with a crime, but he is being investigated by law enforcement agencies including the FBI, the Internal Revenue Service and the Georgia Bureau of Investigation.
The $5 million state fund would match $5 million in federal money allocated by Congress last fall.
The growers fell victim to a faulty electronic crop-transfer system instituted years ago by the Georgia Department of Agriculture in keeping with a federal initiative, said state Sen. Jack Hill, D-Reidsville.
"What it did was leave the farmer out of the process," he said. "Once cotton had been assigned to a warehouse, the farmer did not have any say over where his cotton could be sold. ... This cotton was sold without their knowledge."
"These were glitches in the system nobody foresaw," noted Lowell Strickland, a cotton farmer in Bulloch County who heads a group of 60 growers involved in the case. "We felt (the state) needed to help us out."
A law enacted by the General Assembly last year should prevent recurrences of the problem, Mr. Hill said. The law now requires growers to sign off on all crop transfers.
"It seems to be working relatively smoothly," said Georgia Agriculture Commissioner Tommy Irvin.
The bill passed Tuesday, which passed the House earlier, sets up a process for filing claims, determining growers' eligibility to receive compensation and fixing the amount of payments. It also contains penalties for farmers who file false claims.
All payments would have to be made by the beginning of next year.
The federal portion of the $10 million would be drawn down before any state money is spent, Mr. Hill said. Any leftover funds would revert to the state treasury, he said.
Because the Senate made two minor changes to the bill, it returns to the House for consideration.
Meanwhile, the state's contribution to the indemnity fund is included in the midyear budget the House passed Monday. The Senate is expected to take up the spending plan next week.
Dave Williams is based in Atlanta and can be reached at (404) 589-8424 or email@example.com.
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