- Corn produces favor increased warehouse bonds
- Needed to protect producers
- Texas legislature will consider the issue
The Corn Producers Association of Texas supports Texas Sen. Craig Estes’ S.B. 248 to increase the bond amounts required of grain warehouses.
“In light of recent grain warehouse failures, it’s apparent the bond requirements need to be increased to better cover the financial losses incurred by producers and others in the event of their failures,” said Robert Gordon, CPAT president and producer near Dalhart, Texas.
It will change the minimum bond requirement for a warehouse to $35,000, rather than $20,000, and be based on 10 cents, rather than 6 cents, per bushel of storage capacity, not to exceed a maximum of $500,000.
CPAT feels this is a move in the right direction to help counteract the financial losses, which affect not only producers, but also lenders and businesses. The economic impact of a failed elevator or other grain purchaser ripples across communities, and even across the state.
“After my personal experience with an elevator failure, I know it’s important for the state to make regulation changes that better protect those impacted by failures,” Bruce Wetzel, CPAT secretary/treasurer and producer near Sherman, Texas, said.
This bill was written in response to recommendations by Texas Commissioner for Agriculture Todd Staples and the Texas Department of Agriculture Grain Warehouse Task Force’s review of the Grain Warehouse Act in 2010.