What is in this article?:
- Texas grain farmers have more than one election to consider this fall.
- Grain indemnity fund vote is scheduled for Nov. 19 through Dec. 7.
- The indemnity fund creates an insurance policy that protects grain farmers in the case of elevator or other grain buyer failure.
After harvest and delivery, crop insurance no longer covers grain.
Texas grain farmers have more than one election to consider this fall. After casting ballots in the Nov. 6 Presidential Election, grain farmers have an opportunity to vote in a mail-in referendum to decide on establishment of a grain indemnity fund.
If passed, the indemnity fund would protect grain producers from losses when delivered grain is not paid for. The vote is scheduled for Nov. 19 through Dec. 7.
The Texas State Legislature paved the way for the referendum in the last legislative session and created the Texas Grain Producers Indemnity Board and the indemnity fund program. The effort was initiated following several high profile grain elevator failures in which farmers lost hundreds of thousands of dollars.
Supporters of the referendum say the issues may seem a bit complicated, but boiled down to the basics the indemnity fund creates an insurance policy that protects grain farmers in the case of elevator or other grain buyer failure.
To provide a bit more detail on the fund, TGPIB has released a list of frequently asked questions, including:
What is the purpose of the Texas Grain Producers Indemnity Board and the indemnity fund program?
The Texas Grain Producers Indemnity Board (TGPIB) is the enactment of legislation (HB 1840) passed in 2011.
The TGPIB will establish an indemnity fund program to mitigate up to 90 percent of the financial losses suffered by producers of corn, sorghum, wheat and soybeans when a financial failure prevents grain buyers from paying for sold/contracted grain or delivering unsold grain.
Who are the TGPIB board members?
A nine-member board was appointed by Texas Agriculture Commissioner Todd Staples in Dec. 2011, and includes a representative from the Corn Producers Association of Texas, Texas Agricultural Cooperative Council, Texas Farm Bureau, Texas Grain and Feed Association, Texas Grain Sorghum Producers Association, Texas Soybean Association and Texas Wheat Producers Association. Also serving is a member with expertise in production agriculture financing and a representative with the non-warehouse grain buying industry.
Who is a grain buyer?
For the purpose of the Texas grain indemnity fund program, a grain buyer is:
- A person who buys cultivated corn, sorghum, wheat and/or soybeans from a producer;
- A person who buys seed corn, sorghum, wheat and/or soybeans from a producer;
- A person who stores unsold corn, sorghum, wheat and/or soybeans for a producer.
- The term includes a purchaser, seed dealer, warehouseman, processor or a commercial handler.
Who benefits from the program?
Producers of corn, sorghum, wheat and soybeans who market in Texas benefit directly from the indemnity program. Agricultural lenders, equipment dealers, suppliers, etc., that have a financial interest in the producer and/or their grain may see indirect benefits from the indemnity program.
Also, local and regional economies that would be harmed by the financial failure of a grain buyer will be beneficiaries of the protection afforded through the program.
What is it going to cost; what is the assessment rate?
The rules adopted by the TGPIB set an assessment range of 0.2 percent to 0.6 percent of the final sales price of the grain. The TGPIB will have the authority to adjust the assessment amount within the adopted range and the recommended fund balance annually.
Once the fund reaches an amount determined by the TGPIB as sufficient to cover the risk, a refund process will be initiated to refund assessments on a first in, first out basis.