Comprehensive Guide to Alabama Grain Dealer Surety Bond. An Alabama Grain Dealer Surety Bond is a type of surety bond required by the Alabama Department of Agriculture and Industries (ADAI) for businesses purchasing grain from farmers. The bond amount varies (see below). The cost of the surety bond is usually between 1% and 3% of the bond amount, subject to a minimum premium and fees of $150.
How to Get an Alabama Grain Dealer Surety Bond
At Surety1.com we make it easy to obtain this surety bond. Our simple, three step process is:
- Complete the easy to navigate and secure online application. 1
- Review the free, no obligation quote from one of Surety1’s professional surety bond agents, usually within one business day.
- Sign some paperwork and pay the bond premium
Once these steps have been completed, the Alabama Grain Dealer Surety Bond will be shipped to the bond applicant.
1 -The name of the applicant on the surety bond application must match exactly the full legal business name of applicant for the license.
Once you receive the bond , Submit the original bond document to Alabama Department of Agriculture and Industries
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Alabama Grain Dealer Bond Amount
The bond amount is determined by the Alabama Department of Agriculture and Industries based on the volume of grain purchased.
Annual Grain Purchases | Required Bond Amount |
Less than 100,000 bushels | $10,000 |
100,000 to 500,000 bushels | $25,000 |
500,000 to 1,000,000 bushels | $50,000 |
Over 1,000,000 bushels | $100,000 |
Who Needs an Alabama Grain Dealer Surety Bond?
Any business or individual engaged in buying grain from producers in Alabama must obtain this bond. This includes:
- Grain elevators
- Feed mills
- Grain brokers
- Processors who purchase directly from farmers
How Does the Surety Bond Work?
- Obligee: Alabama Department of Agriculture and Industries
- Principal: The grain dealer purchasing the bond
- Surety: The bonding company providing financial backing
If a grain dealer fails to pay a producer, a claim can be filed against the bond. The surety investigates the claim and, if valid, compensates the farmer up to the bond amount. The grain dealer must then reimburse the surety.
Maintaining Your Bond
Renew the bond annually (failure to renew may result in license suspension). Surety1 will send renewal reminders. Notify the surety of any changes in business operations.
What Happens If a Claim is Filed?
- The claimant (farmer) files a complaint with ADAI.
- The surety investigates and pays valid claims (up to the bond limit).
- The grain dealer must repay the surety for any claims paid out.
Frequently Asked Questions (FAQs)
Q: Can I get bonded with bad credit?
A: Usually yes, but may be higher rates.
Q: How long does it take to get bonded?
A: Often same-day approval if documents are in order.
Q: Is collateral required?
A: Usually not
Q: What if my grain purchase volume changes?
A: You must adjust your bond amount accordingly and notify ADAI.
Conclusion
The Alabama Grain Dealer Surety Bond is a legal requirement to protect farmers and ensure fair business practices. By securing the correct bond amount and maintaining compliance, grain dealers can operate legally and build trust with producers. For more details, contact the Alabama Department of Agriculture and Industries
How to Get Your Alabama Grain Dealer Surety Bond
- Complete an online application. It’s free and no-obligation.
- One of our surety experts will contact you with a firm quote and an agreement to sign.
- Provide payment and your signed agreement, and then you will receive your Surety Bond!
If you have any questions, please call us at 877-654-2327.
Surety1 was founded in 2003 and helps thousands of clients find the best prices on their surety bonds. We take pride in our work so that we can give you great service. Learn more about Surety1.