Having a bad day? Chances dimmed for a timely planting season? Without a doubt, most farmers can relate. How could it be worse? Here’s how. What if your grain buyer was shut down by the Ohio Department of Agriculture? Indeed, that is what happened in northwest Ohio earlier this month. When ODA examiners calculated that liabilities were significantly higher than available assets and that the operation was short at least 50,000 bushels of corn, the licensed elevator was shut down.

Fortunately, this is an infrequent situation. I recall when the Ohio Grain Indemnity Fund was established on July 1, 1983. Not everyone was in favor of the funds creation and some suggested it was just another example of costly bureaucratic interference.

The cost – a half cent per bushel assessment on grain marketed at licensed elevators in Ohio. The original investment was collected from July 1, 1983, to Dec. 31, 1985. Prior to that, Ohio farmers had lost an estimated $8 million due to bankruptcies and failures since 1968. However, since its establishment, the Ohio Grain Indemnity Fund has paid out over $8.5 million in over 1,300 claims. I would bet those claimants appreciate the existence of the fund.
When the indemnity cap was increased from $8 million to $10 million in 1984, a half cent assessment was collected from June of that year through June of 2006. According to a recent news release, the grain indemnity fund presently holds $11.5 million in assets. Paying out $3.5 million for the missing 50,000 bushels of corn plus other potential liabilities will eat up a chunk of those assets.

What happens if your grain buyer is found to be insolvent? If you delivered to a licensed buyer who had not yet paid you, a claim would need to be made to the indemnity fund through ODA’s Grain Warehouse Section and then approved by the Ohio Commodity Advisory Commission. The commission is made up of grain farmers, grain buyers and other agribusiness interests. Presently, three out of the seven members are farmers.

One hundred percent coverage for storage grain, grain payables less than 30 days, deferred payments up to 90 days with a signed agreement, and insufficient fund checks is paid by the fund, provided the claim is approved. 
The fund also provides 100 percent coverage for the first $100,000 and 80 percent of the balance for delayed price grain, basis grain, 31-365 day grain payables without deferred payment agreement, and 91-365 day deferred payments with agreement. No coverage is provided for grain payables over 365 days. 

Now that you have waded through the protection wording, keep in mind that the ODA must first complete a final audit of assets and liabilities before the indemnity claim process can begin. Keeping good records of delivered grain would sure benefit you at this point. 

What if you have bills coming due or need to make an unplanned purchase? Good luck in receiving a quick indemnity check if the grain buyer’s records are in disarray. But be thankful for that foresight more than 25 years ago which helped generate interest in the establishment of the Ohio Grain Indemnity Fund.
If you are interested in learning more, go online at www.agri.ohio.gov/divs/plant/plant.aspx?div=grainfeed
seed.htm

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Roger Bender may write to him in care of this publication.