What is a Michigan Wholesale Potato Dealer Bond?
Any person or business who purchases wholesale potatoes directly from a Michigan grower or grower cooperative or who sells or handles those potatoes in wholesale lots for processing or resale to other wholesale potato dealers, retailers, restaurants, hotels, institutions, or hospitals must procure a surety bond to be a licensed potato dealer.
The Wholesale Potato Dealer Bond guarantees:
- Observance of laws relating to the carrying on of the business of a wholesale potato dealer.
- Payment when due of the purchase price of potatoes purchased by the wholesale potato dealer.
- Prompt payment of claims and charges due to Michigan for services rendered.
- Timely reporting of sales to persons consigning potatoes to the licensee for sale on commission.
- Prompt payment to persons entitled to payment of the proceeds of sales, less lawful charges, disbursements, and commissions.
A wholesale potato dealer refers to any “person who buys potatoes in wholesale lots directly from a grower or grower cooperative or who sells or handles those potatoes in wholesale lots for processing or resale to other wholesale potato dealers, retailers, restaurants, hotels, institutions, or hospitals.” (Wholesale Potato Dealer Act 158 of 1964)
What are the bond conditions?
- The bond must be written by a Surety authorized to conduct business in the State of Michigan.
- The Principal must act by the provisions indicated by the Wholesale Potato Dealer Act 158 of 1964, and other state rules and regulations in purchasing from and promptly paying potato growers or grower cooperatives.
- The bond is considered continuous or automatically extended after that until canceled as provided under the terms of the bond.
- The Surety may cancel the bond upon giving not less than 60 days’ written notice to the Michigan Department of Agriculture and Rural Development.
What is the bond amount?
The bond amount must be double the amount paid for all Michigan grown potatoes purchased from or handled for growers during the month in which the maximum volume of Michigan grown potatoes was bought or handled during the past calendar.
The bond amount must not be less than $10,000 or more than $100,000.
The cost of the bond is a percentage of the bond amount (which serves as your bond premium). The rate can go from 1%-5% of the bond amount. A surety underwriter will make an in-depth evaluation of your credit score.
How can I obtain a Wholesale Potato Dealer Bond?
We have made the surety bond procedure easier for you! Just follow these simple steps:
STEP 1: You must first apply for this type of surety bond. If you are ready to do that now, you may APPLY HERE!
Once we have received your application, we will immediately start the bonding process. We will inform you about the important documents that you need to submit for the next step, which is the underwriting process.
STEP 2: An underwriter will take a thorough look at the following:
- Your credit score
- Your copy of the BOND FORM, which can be obtained from the Michigan Department of Agriculture and Rural Development
STEP 3: After the underwriting process has been fulfilled, we will issue your surety bond and send it to you immediately!
*Note: If you are a wholesale potato dealer who buys an aggregate amount of less than 30,000 pounds of potatoes during each calendar month of a calendar year, you are exempted from this licensing and surety bond requirement for the following calendar year.
Need more information? Contact us now!