WASHINGTON, DC (July 15, 2016) – USDA and industry stakeholders are commemorating a century of successful partnership with commodity warehouse operators that have made reliable agricultural storage and marketing possible since World War I.
A reception to recognize the U.S. Warehouse Act’s 100 years of existence was held on July 14 on Capitol Hill. The event was one of multiple special events to be held throughout the year to recognize an aspect of U.S. agricultural law that ultimately makes everything tick. Speakers included Senate Agriculture, Nutrition & Forestry Committee Chairman Pat Roberts (R-KS), House Agriculture Committee Chairman Mike Conaway (R-TX), USDA Acting Under Secretary Alexis Taylor, and Farm Service Agency (FSA) Administrator Val Dolcini. A number of USDA staff attended, along with Congressional staff and industry stakeholders. The reception was hosted by the National Cotton Council, the Cotton Growers Warehouse Association and the Cotton Warehouse Association of America, along with other stakeholder groups.
The U.S. Warehouse Act, first signed into law by President Woodrow Wilson in 1916, enabled producers of agricultural products to market commodities throughout the year, not just at harvest. The Act’s primary purpose has remained the same over 100 years: to provide safe storage for agricultural products in public warehouses and to assure dependability of the receipts issued for these products.
Sandra Wood, acting deputy administrator for FSA’s Commodity Operations, said “The public-private partnership established by the U.S. Warehouse Act assures producers and consumers alike that they can have confidence in the nation’s warehouse storage system. Through agency efforts in Washington and at USDA’s warehouse licensing branch in Kansas City, the program has been kept up-to-date for a century, evolving into a contemporary system envied throughout the world.”
As USDA noted in a 1966 issue of Agricultural Marketing, farmers once had difficulty finding suitable storage facilities and had no guarantee that warehouses would store products safely or that the banks or traders would accept the warehouse receipts. The Act originated for cotton producers who were faced with market chaos, agricultural credit shortage, and a large cotton crop predicted at the start of World War I. Since then, the Act has evolved to include several commodities.
National Cotton Council Chairman Shane Stephens, a warehouseman who serves as vice president of Cotton Services and Warehouse Division for Staplcotn Cooperative Association in Greenwood, Miss., said the U.S. Warehouse Act “played an important role in the United States building one of the best agricultural commodity storage systems in the world. This legislation definitely helped pave the way to a modern infrastructure that continues to ensure the safe and efficient storage and marketing of our nation’s raw cotton and other crops.”
After being updated when the president signed the Grain Standards and Warehouse Improvement Act in 2000, the law modernized the regulation of federal warehouses by authorizing the use of electronic warehouse receipts and other electronic documents for all agricultural products. The 2000 act also authorized the Agriculture Secretary to license public warehouse operators storing a broader range of agricultural products.
Notably, the U.S. Warehouse Act is considered a “permissive regulator act.” It only applies to warehouse operators who voluntarily apply for licensing, but each licensee must operate under the act’s provisions and be subject to the regulations and licensing agreement. Most states across the country now require warehouse licensing for agricultural commodity warehouse operators.
U.S. Warehouse Act benefits include: USDA defining acceptable warehouse practices, creating a reliable system for inspecting warehouses and enabling an orderly marketing system by making warehouse receipts more acceptable as collateral for bank loans. The Act’s purposes include:
• Provides protection for depositors of agricultural products,
• Offers a nationwide uniform regulatory system for storing agricultural products,
• Maintains integrity and acceptability of warehouse receipts in the commodity and financial marketplaces,
• Facilitates interstate and global commerce for the marketing of agricultural products,
• Facilitates safe storage of agricultural products at reasonable rates, and
• Requires warehouse operators to accept agricultural products for storage without discrimination.
More on the U.S. Warehouse Act is at www.fsa.usda.gov/Internet/FSA_File/aboutuswa.pdf.