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SCHEDULE 14A INFORMATION
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ERLY INDUSTRIES INC.
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(Name of Registrant as Specified In Its Charter)
THE POWELL GROUP
FARMERS RICE MILLING COMPANY, INC.
NANETTE N. KELLEY
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[LETTERHEAD OF DANBURY RICE SALES]
September 3, 1997
Nanette Kelley
The Powell Group
P.O. Box 788
Baton Rouge, LA 70821
Dear Ms. Kelley:
Danbury Rice Sales is a sales office located in Danbury, Texas that represents
an average of 1,300,000 cwt. of rough rice each year from Brazoria and Galveston
counties. We primarily market our rice to American Rice, Inc. (46%), Uncle
Ben's, Inc. (24%), Affiliated Rice Milling Inc. (21%), and Farmers Rice Milling
Company (6%). By far, American Rice, Inc. (A.R.I.) represents the largest mill
volume for our sales office.
We are dependent upon A.R.I. In the past, they have provided our customers with
good prices and good contracts. Within the last year and a half, it has become
more difficult to confirm these prices and contracts. Our farmers have lost
faith and confidence in A.R.I. The faith was lost when we agreed to contractual
terms and A.R.I. did not uphold their contractual responsibility.
This year we sold rice to A.R.I. with delayed shipping and payment terms. We
agreed to ship within thirty days from confirmation and A.R.I. was to pay loan
thirty days after shipment and premium fifteen days later. This would make the
final payment a total of forty-five days from last day of shipment. Instead, we
did not receive loan money until the 681.1 expiration date which was forty-five
days and on the average, premium was paid between seventy-five to one hundred
days after shipment. Technically, the final money was paid at 130 days after
confirmation.
Our farmers planned their financing around the original terms. When these terms
were not met, they had to borrow money at a greater interest rate than A.R.I.
was paying them. Many farmers could not get a new crop loan because they were
waiting for the money from A.R.I. to pay their old crop loan.
Currently, our receivables of approximately $500,000.00 on old crop money is 125
days from shipment. The last premium money we have received was July 21, 1997.
Until financial responsibility is shown, we have advised our farmers not to ship
against the A.R.I. green rice contract.
We appreciate your interest and concern.
Best Regards,
/s/ JACKO GARRETT /s/ TRACI HARVEY
Jacko Garrett Traci Harvey
Owner Sales Agent
