If it wasn’t for a failed grain elevator, Nick Nemec may have stayed retired from politics.
Nemec, a Democratic candidate for the Public Utilities Commission and a former state legislator, spoke Monday night to a group of Democrats from Hughes and Stanley counties. He said the state’s recent experience with Anderson Seed is the “primary reason” he’s seeking public office again.
Anderson Seed, a Minnesota-based company which operated a grain elevator in Redfield, went into bankruptcy earlier this year, leaving behind a $2.6 million debt to farmers in South Dakota.
“It’s kind of a comedy of errors why this happened,” he said, highlighting a nine-month-old “stale” financial statement turned in by Anderson Seed and a loan application turned down by the Governor’s Office of Economic Development, unbeknownst to the PUC.
Nemec offered several proposals to keep similar incidents from happening again if he were elected. The top of his list was the establishment of a check-off, equal to one cent per bushel, to repay debts owed to local farmers.
Estimating 1 billion bushels produced by South Dakota farms a year, such a check-off could gather $2.5 million – most of the Anderson Seed debt – in three months, Nemec said.
He stressed any check-offs would be used only for situations such as Anderson Seed and would be temporary until debts were paid off. Any account set up would be as close to empty as possible once the check-off was complete, he said.
Another suggestion included raising bond limits for elevators. It’s doubtful any bond would cover the price of the entire crop stored in an elevator, but a $100,000 bond, such as Anderson Seed had, is too low, Nemec said.
“It’s a pretty humble elevator in South Dakota that doesn’t get $100,000 worth of grain by noon,” Nemec said.
Nemec’s suggestions were mainly in line with proposed changes offered by Republican PUC incumbent Chris Nelson, who wants to require current financial records and revise the structure of bond amounts. Nelson’s plan also adds penalties for perjury into applications and requiring notification if a grain buyer becomes out of compliance with a licensing agreement.
Though running against Nelson, Nemec said he supports his opponent’s measures. The only addition is the check-off, because Nelson’s plan does not have any provisions to help farmers recoup their losses, he said.