Rabo, which provides financing for farmers, ranchers and agribusiness across the US, claims Turner Grain currently owes it nearly €1 million.
The Missouri headquartered finance company alleges it entered into a security deal with Turner Grain in January, and is now entitled to ‘the foreclosure of its liens and security interests’ in the grain currently held by the Arkansas firm, along with other assets and collateral.
That legal action comes in the wake of two other lawsuits against Turner Grain.
Two groups of farmers filed separate claims against the broker in August, contending they have not been paid for the grain they sold Turner Grain and alleging fraud.
Mounting losses for farmers and beyond
It is reported that losses for farmers and other sectors connected to the industry could reach $100m as a result of the collapse of the commodities broker.
Turner Grain acts as a middleman between the farmers in numerous US states including Arkansas, Mississippi, Missouri and Louisiana who produce grains and the companies that purchase it.
The company contracts to buy grain, takes possession of it, finds a buyer, and then pays farmers once it sells the grain.
Last week, Turner Grain President, Dale Bartlett, file Chapter 12 individual bankruptcy protection, listing up to 49 creditors with estimated assets of between $1,000,000 and $50 million with estimated liabilities of between $1,000,000 and $10m, reported Arkansas Business Online.
Proposal tabled to bond commodity brokers
The Agricultural Council of Arkansas said: “It’s not real clear what led to the company’s failure or how its failure will impact the individuals and companies they worked with, but the outlook is not good.”
Government officials are also seeking answers to how this happened and how to prevent it from happening again.
Davy Carter, Arkansas House Speaker R-Cabot, has proposed that commodity brokers should be bonded and/or insured to protect against such losses for grain producers.