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Written by Administrator
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Sunday, 11 September 2005 |
by S. Zorba Frankel, from our issue #14
In the course of putting together this issue on the worm business, and
with its historical coverage in particular, we found ourselves,
co-editors of Worm Digest, considering the term “buy-back guarantee”
(and “agreement” ) and wondering whether this was something good or bad
for the industry and how we were going to write about it. Further, we
admit to not knowing if such a guarantee is legal anywhere in this
country.
And so, only a few days before our deadline (for our own work) for
issue #14, we decided to look into the buy-back guarantee for
ourselves. We wrote up a list of five questions and sent them to a
small number of long-time worm businesspeople. We asked them what their
opinion of the buy-back guarantee is, what they know about its legality
(or illegality), and whether they themselves offered such a guarantee.
Of the eight businesses faxed, five responded by the time this was
written. Four were California businesses and one was a Southeastern
U.S. business. We know at least one to be solely a worm broker at this
time, and not a worm grower.
The five respondents shared a view that the buy-back guarantee is not
legal in any form. It is like the stock market, explained one
respondent. Can a stock broker sell stock and guarantee that the
company will perform to certain standards and that the broker will buy
back the stock at a certain price? No one can predict the future of the
worm market accurately, said another. There is more here than this
simple answer, however.
The Importance of Working Together
Four of these five businesses do set up growers with start-up bins,
bedding and training. For the growers set up by three of these
businesses, the expectation is that when the parent business needs
worms, owners will come to them. It's a relationship that can work
well, says one, but growers can also be misled. According to one
businessman, you've got to be honest here and not set up a large number
of people with worm businesses, promising them you'll be in a position
to buy their worms back, when the orders aren't there. Buyers need to
know, also, what they're getting for their money. There's a lot of
things that I teach people; how to go to the airport, UPS, prepare and
package worms. The last windrow that went out, I trained that guy for
two weeks. New growers are in a position to be disappointed, also, if
the parent businesses don't need worms when the growers need to sell
some worms or when the grower's expectation of the price he will get
for his worms (which, originally came out of a verbal understanding
made at the beginning of the contract) is not met by the parent due to
current market conditions.
It seems to be a part of human nature to trust people. We want to
believe that the rosy picture that they are painting is actually true
and that we can have a part in that picture. So we do not check the
accuracy of that picture. We don't ask for verification of their claims. |
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Last Updated ( Sunday, 02 October 2005 )
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