INDIANAPOLIS, Ind. — Indiana grain farmers and elevators should note that collections for the Indiana Grain Indemnity Fund ended July 1. Farmers no longer must pay a 0.2 percent premium on the gross value of all the grain they market to licensed grain buyers.

 

Indiana law states if the fund elapses $25 million before the end of any given year, the Indiana Grain Indemnity Corp. (IGIC) board may cease collections. The fund has amassed $35 million. The only two collection periods in the history of the fund were 1995-97 and 2015-17.

Collections did start on July 1 and continued through June 30, even if the fund crossed the $25 million mark. Grain covered under the Indiana Grain Indemnity Program includes, corn (popcorn, but not sweet or flint corn), wheat, barley, oats, sorghum, rye, oil seeds, soybeans and other approved agricultural commodities.

Stored grain losses are covered at 100 percent, but grain value is defined by average grain prices at local competing elevators at the time of failure. Financial losses will be reimbursed at 80 percent of the loss, less all credits. Grainproducers can opt not to participate in the indemnity program. They can request premium refunds, but will not be financially covered if a grain buyer or warehouse fails.

“Since its inception, the Grain Indemnity Fund has been an important safety net for Hoosier farmers,” said Ben Gavelek, communications director of the ISDA. “Now, thanks to collective efforts by the General Assembly, agricultural groups and grain farmers around the state, the fund is once again at a level that can provide security if a grain buyer or warehouse fails.”

The ISDA says that since 1996 the fund has paid producers approximately $4.2 million involving 11 failures. The most recent failure occurred in 2011.

“Like any business, if profits or margins aren’t enough to meet obligations, it has the potential to fail,” Gavelek said. “However, we’re fortunate in Indiana to have a very strong grain industry with knowledgeable farmers and grain industry professionals.”

Gavelek added that grain failures do not happen often. He credited periodic audits conducted by the Indiana Grain Buyers and Warehouse Licensing Agency, which ensure that licensees’ assets are adequate to pay farmers for their grain.

“This will have a minimal immediate monetary impact on farmers,” Gavelek said. “In the long term, however, the security provided to growers by a well-funded indemnity program is a very positive result of the recent collection, especially in an uncertain agricultural economy.”

Fund collections could start up again in the future.

“The Indiana Grain Indemnity Corporation board has the ability to require the collection of additional farmer premiums, if the fund drops below $20 million as of May 1 during any given year,” Gavelek said.

For more information, visit www.in.gov/isda/2352.htm