Snow’s Bill Protecting Hoosier Grain Farmers Now Law
May 12, 2021 at 8:38 p.m.
By Staff Report-
The Indiana Grain Indemnity Fund protects Hoosier grain farmers from catastrophic financial losses when state-licensed grain buyers, grain banks or warehouses fail. Snow said grain farmers typically store their harvests in these licensed warehouses and enter deferred pricing agreements with buyers to determine a selling price at a later date. In the event of a warehouse failure, the fund covers 100% of contracted stored grain and 80% of other grain transactions for up to 15 months prior to the date of failure. The fund is supported by farmers who pay a 0.2% premium on the gross value of all grain marketed to licensed grain buyers in Indiana, according to a news release from Indiana House Republicans.
With the law authored by Snow, grain farmers and buyers will establish an agreement that extends up to one year from the date of grain delivery, following the market standard for farmers to adhere to. This encourages farmers to practice good marketing practices with their grain and prevents them from running beyond the 15-month indemnity coverage period, which puts them at risk of losing all their profits should a warehouse fail.
"Farmers place everything on the line when they sign contracts with grain buyers," said Snow, who works in the agriculture insurance industry. "This law gives farmers clarity on what is and is not covered by the Indiana Grain Indemnity Fund. These new protections will help the fund and oversight board be better prepared for challenges in the market and address issues with licensed buyers before they result in huge financial problems."
The Indiana Grain Indemnity Fund protects Hoosier grain farmers from catastrophic financial losses when state-licensed grain buyers, grain banks or warehouses fail. Snow said grain farmers typically store their harvests in these licensed warehouses and enter deferred pricing agreements with buyers to determine a selling price at a later date. In the event of a warehouse failure, the fund covers 100% of contracted stored grain and 80% of other grain transactions for up to 15 months prior to the date of failure. The fund is supported by farmers who pay a 0.2% premium on the gross value of all grain marketed to licensed grain buyers in Indiana, according to a news release from Indiana House Republicans.
With the law authored by Snow, grain farmers and buyers will establish an agreement that extends up to one year from the date of grain delivery, following the market standard for farmers to adhere to. This encourages farmers to practice good marketing practices with their grain and prevents them from running beyond the 15-month indemnity coverage period, which puts them at risk of losing all their profits should a warehouse fail.
"Farmers place everything on the line when they sign contracts with grain buyers," said Snow, who works in the agriculture insurance industry. "This law gives farmers clarity on what is and is not covered by the Indiana Grain Indemnity Fund. These new protections will help the fund and oversight board be better prepared for challenges in the market and address issues with licensed buyers before they result in huge financial problems."
Have a news tip? Email [email protected] or Call/Text 360-922-3092