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.
Can I get a refund?
Yes, but it may take some time. Annually, the TGPIB will review its budget for the next year and its current financial status and, based on that review, will determine whether or not to issue refund allotments based on prior years' producer assessment submissions. In any event, if the TGPIB has determined the TGPIB financial account is not sufficient to pay refund allotments and maintain a minimum fund balance, the TGPIB may not issue refund allotments.
If a producer files a refund request with the TGPIB, and the TGPIB determines refund allotments are not to be issued at the time of the request, the producer shall remain eligible to file an indemnity claim with the TGPIB.
What is the need for this program; aren’t producers already covered by the bond?
Warehouses are the only grain facilities required to carry a bond, which only applies to stored grain. Other grain buyers are not licensed by the TDA or any other agency and are not required to be bonded.
The current bond requirement for state-licensed warehouses is 10 cents per bushel of storage capacity with a maximum bond requirement of $500,000; federally-licensed warehouses must have a third-party surety bond based on the licensed capacity. The $500,000 bond, at today’s grain prices, does not provide adequate protection in the event of a financial failure.
Bonds only cover a warehouse’s stored grain. Bonds do notcover unpaid for, sold grain or contracted grain.
Why not purchase an insurance policy to cover this risk?
It’s not currently available. No entity now offers an insurance policy to cover the risk of loss of grain due to bankruptcy or theft of grain. Once the grain is delivered, an individual’s crop insurance coverage ends. Additionally, once the grain leaves a producer’s premises, his personal insurance is not applicable.
Will having this fund encourage producers to take more risks with less than reputable grain buyers?
Not necessarily. Producers are responsible for marketing their grain with a grain buyer that participates in the program if they are to be covered.
The program will only reimburse up to 90 percent of a covered loss. Producers will have a 10 percent reduction in their total claim, which should encourage the use of sound judgment in selecting which market they will use.