|
|
|
|
|
|
|
| ODA suspends operations for Schwan Grain in Ohio |
| |
 |
ODA suspends operations for Schwan Grain in Ohio
By DOUG GRAVES
Ohio Correspondent
MONROEVILLE, Ohio — After receiving several complaints earlier this month from farmers in and around Huron County, the operating license of Schwan Grain, Inc. in Monroeville has been suspended.
Agency examiners from the Ohio Commodity Advisory Commission looked into the matter on Dec. 5 and discovered Schwan Grain (with grain handlers’ license No. 5940), holds liabilities significantly higher than its available assets. Five days later the elevator was shut down.
“Anyone who has done business with Schwan Grain and are owed funds is advised to contact our Grain Warehouse Section,” said Brett Gates, Ohio Department of Agricultural (ODA) spokesperson. “In addition to grain, this company is also a trucking and brokerage company.”
Schwan Grain is a single location, private ownership elevator founded in 1998. It operates with five employees. Sales from this company are under $500,000. “There are specific requirements for grain handlers and they have to keep certain assets, and in this case the liabilities far exceeded the assets,” Gates explained.
What has transpired at Schwan Grain is not the norm, but it has occurred in the state. The grain handling license of Archbold Elevator, Inc. in Archbold was suspended in 2011 for similar reasons. In this case, operations at this elevator in Wauseon and at additional storage bins in Elmira were halted.
“The important thing to remember here is we have the Grain Indemnity Fund in place for folks if they’ve done business with this company and it is funded through a half-cent per-bushel assessment on grain marketed at licensed elevators,” Gates said. “If the insolvency takes place, then the farmer can be reimbursed for the grain that was stored there.”
Ohio’s Grain Indemnity Fund was created in 1983 to reimburse farmers when a licensed elevator becomes insolvent. Farmers lost approximately $8 million to grain elevator bankruptcies prior to the fund. Since the fund was established it has reimbursed farmers more than $12.7 million.
In 2013, the maximum balance on the fund was increased from $10 million to $15 million, and the half-cent assessment will be collected until the fund balance reaches $15 million. The grain indemnity fund currently holds $9.7 million in assets.
The law also now gives priority to the automatic lien established and held by the department in the event of a grain handler’s failure or insolvency. The department’s liens will now have priority over all competing lien claims asserted against the handler, ensuring the indemnity fund receives maximum reimbursement in the asset liquidation process.
“It’s hard to say if Schwan can get back into business because we’re in the process of completing an audit of assets and liabilities,” Gates said. “This isn’t the kind of story we want highlighted and it’s sad to see, but at the same time we want to make sure people are being paid again.”
Nobody could be reached at Schwan Grain for comment by press time.
Once the ODA completes its final audit the formal indemnity claim process will begin. Claims to the indemnity fund are handled through the ODA’s Grain Warehouse Section in conjunction with the recommendation of the Ohio Commodity Advisory Commission.
Farmers who have done business with Schwan Grain and are owed money for grain deposits are asked to call 614-728-6410. |
| 12/17/2014 |
|
|
|
|
|
|
