By STAN MADDUX

Indiana Correspondent

INDIANAPOLIS, Ind. — It’s not relied upon often, but a more than $37 million emergency fund paid into by Indiana grain farmers is being tapped into again to help growers recover their losses.

The Indiana Grain Indemnity Fund was established in 1996 under a law adopted by the state legislature. Harry Wilmoth, chair of the IGIF Corp. board, said the issuance of partial payments to 44 farmers impacted by the financial struggles at Dorsett Bros., Inc. in Martinsville was approved last month.

Wilmoth is also director of the Indiana Grain Buyers Warehouse Licensing Agency, which licenses and audits grain handlers in the state doing business with producers. He said the Dorsett grain elevator, about 50 miles southwest of Indianapolis, is no longer licensed in Indiana to buy more than 50,000 bushels, from a business failure declared by the agency in December 2018.

He said 44 of the 48 claimants were approved to receive partial payments on their claims from the fund, until the process of receiving full payment runs its full course. Wilmoth said partial payments offer immediate relief from tight conditions the claimants operate under in a still tough farm economy, until they receive the balance of what’s owed them.

“We’re trying to get as much money as we can to the producers today,” he explained.

Wilmoth said the fund strictly covers farmers whose losses are tied directly to the business struggles of a grain dealer or grain storage facility. Farmers not paid yet for grain they delivered to a facility later falling on hard times receive 80 percent of the money they had coming.

Full reimbursement is given on the value of grain farmers were not able to recover from a facility that later closes.

Under state law, grain producers are automatically in the program and contribute to the fund 0.02 percent of the gross value of their product at time of sale during a collection period. Collections start when the fund drops below $20 million and stop when the fund reaches $25 million, Wilmoth said.

He said the only two collection periods have been from 1996-98 and 2015-17. The current balance is from returns on investments with revenue in the fund, he said.

“We just continued ever since then to earn interest,” he added.

Wilmoth said revenues from a liquidation of a failed licensed facility are used first to meet claim obligations, before dipping into the fund to cover the balance.

Farmers can opt out of the fund and receive the money they contributed to it, but they lose coverage. They can also opt back in later, but doing so requires paying back the money they collected when they opted out of the program.

Grain indemnity programs exist in other states, such as Tennessee, which recently surpassed the minimum $10 million balance in its fund. Collections start when that fund dips to below $8 million.

According to the Tennessee Department of Agriculture (TDA), the fund was established in 1989 when a majority of farmers agreed to contribute 1 cent per bushel on soybeans and 1/2 cent on all other grain.

“It’s rare for a grain dealer or warehouse to fail. However, with the current challenges of trade, weather, and markets, farmers don’t need any additional uncertainty. That’s why it’s important to maintain this fund,” said TDA Commissioner Charlie Hatcher.

In Indiana, there have been 388 claims totaling about $9.5 million from 13 warehouse and dealer failures since the creation of the fund, Wilmoth said, while in Tennessee, 76 claimants have received close to a $1 million from grain dealer or warehouse failures since the inception of its fund, according to TDA.