In 1907, Kansas enacted its first warehousing laws.  The early farmers recognized the need for government to regulate the grain industry much in the same way it regulated banks.  The primary goal for the program has not changed in more than 100 years.  Protecting producers and their stored grain is the primary function of this program. 

The Legislature authorized the Kansas Department of Agriculture to license warehouses storing agricultural products that meet department standards and agree to abide by the laws and regulations.  It further authorized qualified employees to examine warehouses to ascertain the quantity of stored grain, the quality of the grain in a limited manner, the overall capacity of the warehouse facility and to investigate the warehouse operator prior to licensing.  The Legislature also required that a bond by an acceptable surety company be filed prior to licensing.  The Warehouse Law defined the warehouse operator’s responsibilities and provided for supervising his operation after licensing.  It prescribes the form of receipt that must be issued and authorizes penalties for infractions of law or regulation.  The power, jurisdiction and authority conferred upon the Kansas Department of Agriculture under the “Warehouse Law” is exclusive with respect to all persons securing a state license, as long as said license remains in effect.

The primary purpose of this program, from its enactment to now, is to protect depositors of basic agricultural products in public warehouses.  This is the prime directive and all employees are committed to this goal.  To that end, we assure producers that they have a safe place to store grain, that the grain is taken care of during the storage period, that grain of comparable grade and quality is available and can be delivered when called for, and that a warehouse operator does not become insolvent.

During the 2005 legislative session, the statutes were changed to grant grain examiners the authority to obtain representative samples whenever they suspect grain quality is in jeopardy.  If quality problems are confirmed in a representative sample, the statute gives the secretary of agriculture authority to require the warehouse to have suspect grain thoroughly sampled and graded by the Kansas Grain Inspection Service.  If the facility does not comply with the required sampling, the secretary may order it done at the facility’s expense.

The Grain Warehouse Inspection program has a new statute that allows grain companies to furnish an irrevocable letter of credit along with a bond to obtain a license. The licensed elevator, with the approval of the Grain Warehouse Inspection program, is allowed to move warehouse-receipted grain to another licensed, bonded terminal elevator. This allows smaller facilities to free up bin space for the next harvest. Also, with the program's approval, licensed facilities may use emergency or conditional storage space during harvest when storage space is in short supply. This allows the elevator to better serve Kansas crop producers.

Grain warehouse laws may be found at K.S.A. 34-101 through 34-2,113.