Buckeye Farm News
The Nov. 13, 2008, Buckeye Farm News contained a story that reported on two recent Ohio Supreme Court decisions that could affect farmers. One court decision involved a farmer and his co-op and determined how much interest the co-op could charge on an open account without a written agreement. The Ohio Supreme Court held that the co-op could charge only the statutory rate of interest unless there was a written agreement with the farmer requiring a higher rate. The court further held that it was illegal to charge interest on interest.
The article was written to provide information and education to farmers and creditors alike. It was not intended to
portray the co-op industry in a negative light. It just so happened that the court case involved a farmer and a co-op, but the legal principle applies to anyone extending credit, including lawyers, contractors, feed mills or anyone else the farmer does business with.
Farmers need co-ops. Co-ops provide a needed and valuable service. In these uncertain economic times, with fuel and fertilizer prices fluctuating wildly, the co-ops may find themselves in unique situations. Perhaps the long-time customer who promptly paid his account finds that he now needs credit.
If such is the case, farmers should not be surprised when the local co-op requests a new signed agreement. The co-op is merely trying to comply with the law as stated by the Ohio Supreme Court.