Grain farmers in Ohio should know there is a safety net in place in case their grain elevator closes its doors. In 1983 the Ohio legislature enacted laws specific to agricultural commodity handlers, including the Grain Indemnity Fund. Here are five things to know:
Ohio’s grain indemnity fund was established as a way to provide compensation to Ohio grain producers who lose money due to the failure or insolvency of a licensed grain elevator.
The Ohio Department of Agriculture (ODA) administers the grain indemnity fund, which is funded through ½ cent per bushel assessments collected by the grain elevator and submitted to ODA. The fund is capped at $15 million and collections cease once that cap is met.
Claims made against the fund by grain producers affected by the failure or insolvency of a licensed grain elevator are handled through ODA’s Grain, Feed & Seed Section and reviewed by a Commodity Advisory Commission.
Typically, claims made by grain producers with stored grain in the insolvent licensed elevator will be paid at 100 percent, as well as the following claims:
• claims made for grain where payment has been tendered and dishonored due to insufficient funds or because accounts have been frozen;
• claims made for commodities priced at time of delivery, delivery occurred no more than 30 days prior to the suspension of the handler’s license and the commodities have not been paid for before suspension;
• claims made when commodities were priced at delivery, the delivery occurred no more than 90 days prior to the suspension and the commodities were subject to a written agreement for deferred payment by the handler not later than 90 days following date of delivery and no payment has been made by the date in the written agreement.
All other claims will be reviewed and typically refunded for 100 percent of the first $10,000 and 80 percent of the remainder of the claim. This includes claims made by grain producers with delayed price and basis contracts with the insolvent licensed elevator.