100.235 Unfair trade practices in procurement of vegetable crops.

(1) Definitions. In this section:

(a) “Affiliate" means any of the following persons or business entities:

1. An officer, director, partner, member, manager, major stockholder, employee or agent of a contractor.

2. A corporation or business entity that is owned, controlled or operated by any of the persons under subd. 1.

(b) “Contractor" has the meaning given for “vegetable contractor" under s. 126.55 (14).

(c) “Contractor's cost to grow" means the average cost, per unit weight of vegetable, incurred by the contractor and the contractor's subsidiaries and affiliates to grow a species of vegetable in a growing region, either during 3 of the preceding 5 years excluding the highest and lowest years, or, if the contractor has grown a vegetable species less than 5 consecutive years, during the most recent years available.

(d) “Growing region" means one or more geographic areas in which the department determines that the cost to grow a particular species of vegetable tends to be reasonably similar.

(dm) “License year" has the meaning given under s. 126.55 (10m).

(e) “Producer" means any person who produces and sells vegetables, or who grows vegetables under contract.

(f) “Subsidiary" means a corporation or business entity that is owned, controlled or operated by a contractor.

(g) “Vegetable" means a vegetable grown or sold for use in food processing, whether or not it is actually processed as food. “Vegetable" includes sweet corn but does not include grain.

(h) “Vegetable procurement contract" means an agreement between a contractor and a producer, under which the contractor buys vegetables grown in this state from the producer or contracts with the producer to grow vegetables in this state.

(2) Contractor may not pay producer less than contractor's cost to grow. If a contractor and the contractor's affiliates and subsidiaries collectively grow more than 10 percent of the acreage of any vegetable species grown and procured by the contractor in any license year, the contractor shall pay a producer, for vegetables of that species tendered or delivered under a vegetable procurement contract, a price not less than the contractor's cost to grow that vegetable species in the same growing region. For vegetables contracted on a tonnage basis and for open-market tonnage purchased, acreage under this subsection shall be determined using the state average yield per acre during the preceding license year.

(4) Cost to grow; report to department upon request. If the department determines that a contractor and the contractor's affiliates and subsidiaries will collectively grow more than 10 percent of the acreage of any vegetable species grown and procured by the contractor during a license year, the department may require the contractor to file a statement of the contractor's cost to grow that vegetable species. The contractor shall file the report with the department within 30 days after the department makes its request, unless the department grants an extension of time. The department may permit the contractor to report different costs to grow for different growing regions if the contractor can define the growing regions to the department's satisfaction, and can show to the department's satisfaction that the contractor's costs to grow are substantially different between the growing regions.

(5) Department investigations; response to producer complaints. The department may, on its own initiative, investigate to determine whether any contractor has violated this section. If a producer or producer association files a written complaint with the department alleging a violation of sub. (2), the department shall investigate the complaint. The department is not required to investigate any complaint filed more than 180 days after the producer tendered or delivered the vegetables to the contractor.

(6) Additional reports; inspection and audit. For purposes of an investigation under sub. (5), the department may require a contractor to submit reports of acreage, tonnages, costs to grow, and amounts paid to producers. The department may require that the reports be certified by a certified public accountant, or the department may inspect and audit the contractor's records to verify that the reports are accurate.

(7) Reports are confidential. Reports submitted to the department under subs. (4) and (6) are confidential and not open to public inspection.

(8) Department findings and order. If the department completes an investigation in response to a complaint under sub. (5), the department shall issue written findings to the contractor and complainant, indicating whether the department has found a violation of sub. (2) by the contractor. If the department finds that the contractor has violated sub. (2), the department shall specify what it finds to be the contractor's cost to grow. Either the contractor or the complainant may demand a public hearing on the department's finding, under ch. 227.

(9) Uniform system of cost accounting; department rules. The department may promulgate rules prescribing a uniform system of cost accounting to be used by contractors in determining and reporting a contractor's cost to grow. The accounting system shall take into account cost differences attributable to factors affecting prices for vegetable species under vegetable procurement contracts.

(10) Private remedy. A producer who sustains a monetary loss as a result of a violation of this section by a contractor may recover the amount of the loss, together with costs, including all reasonable attorney fees, notwithstanding s. 814.04 (1).

(11) Penalties.

(a) Forfeiture. Any person who violates this section or any rule promulgated or order issued under this section may be required to forfeit not less than $100 nor more than $10,000. Notwithstanding s. 165.25 (1), the department may commence an action to recover a forfeiture under this paragraph.

(b) Fine or imprisonment. Any person who intentionally violates this section shall be fined not less than $100 nor more than $10,000 or imprisoned for not more than one year in the county jail or both for each violation.

History: 1975 c. 67, 199; 1989 a. 31, 359; 1993 a. 112; 2001 a. 16.