Maryland law requires all persons who are in the business of buying, receiving, exchanging or storing grain from a grain producer to obtain a license from the Maryland Department of Agriculture annually. Persons purchasing grain for use in their own farming operation are exempt from the licensing requirement. Failure to obtain a license when operating as a Grain Dealer is considered a misdemeanor. Violators may be assessed a civil penalty up to $5,000.00 or upon conviction may be subject to a fine up to $10,000.00.
The Maryland Grain Law provides a grain producer with limited assurance of the licensed dealer's financial stability. Additionally, the producer knows the dealer has insurance coverage to prevent loss of stored grain due to natural disasters. Farmers selling to non licensed grain dealers have no way to verify if the dealer has insurance on the grain or is financially stable.
Many aspects of the grain business are not regulated by the Maryland Grain Law. Grain buyers who only purchase grain from other grain buyers are not required to obtain a license. Persons purchasing grain for use in their own farming operation are not required to obtain a license. he law does not guarantee producers payment, regulate contract terms or prompt payment.
Producers can maximize the protection offered by the Grain Law by verifying the license status of potential buyers of their grain. A listing of licensed Grain Dealers is published by the Maryland Department of Agriculture annually and can be obtained by contacting the Grain Laws Section. All reports of unlicensed Grain Dealers are investigated by MDA inspectors.
Grain Dealers Licensing Law