By ANN HINCH
Assistant Editor

INDIANAPOLIS, Ind. — The Indiana State Fair may be about fun and games and a deserved rest before harvest time, but at least one booth set up there a week ago, on Farmers’ Day, was a reminder it’s also about agriculture – and that’s serious business.

Employees with the Indiana Grain Buyers and Warehouse Licensing Agency (IGBWLA) staffed the booth to answer questions about changes to state law this year affecting grain farmers and buyers. The two biggest changes deal with farmers making claims for payment from the state’s Grain Indemnity Corp.

According to Jerome Hawkins, IGBWLA director, the agency audits elevators and other businesses that purchase grain from growers in Indiana. If a buyer cannot pay for contracted grain, the indemnity fund exists to make that payment and the state tries to recover all or part of the money from the defaulted buyer.

One change in law this year is the indemnity fund will not cover losses from grain sold to an unlicensed buyer, explained IGBWLA licensing officer Dennis Henry. Elevators and most other bulk grain buyers are supposed to be licensed by the state.

Henry said the agency oversees about 540 facilities across Indiana, under 350 licenses. Entities which must be licensed are grain banks, warehouses, grain buyers and buyers/warehouses – exempt buyers are those who purchase fewer than 50,000 bushels of grain each year, buy grain to feed their own livestock or do not offer delayed pricing or contracts relating to the commodity futures market.

The second change growers need to know, Henry said, involves claims from grain producers selling to non-exempt buyers. This grain must be paid for within 21 days or the buyer must be licensed or have the seller under contract.

Henry said this was the result of a buyer failure case in which farmers selling to the facility had agreed to roll what they were supposed to be paid into promissory notes. “They were basically funding the person’s business,” he explained.

What this should do, he said, is cut down on losses to grain sellers in case of a buyer’s business failure – and reduce the need to file a claim with the indemnity fund. It should also force non-exempt buyers to license themselves with the state.

The IGBWLA advises farmers to always read contracts with a buyer before signing, and keep a copy for their own records. They should also keep their scale tickets and settlement sheets, as these are proofs of a claim.

Also, farmers should look for the state license and posted bin charts at the buyer’s facility. “Make sure you know who you’re selling your grain to,” Henry said.

The Grain Indemnity Corp. exists to reimburse grain sellers on valid claims of loss to a licensed buyer; it will then try to recoup that loss from the buyer. If the fund balance dips below $10 million, a collection will go into effect to refill it.

The collection rate – when active – is a 0.02 percent premium on the gross sale price received by grain producers, according to Hawkins. This includes corn, soybeans, wheat and other eligible commodity grains, but not feed ingredients such as soy meal, for example.

If this assessment is reinstated, the fund would have to hit a $15 million balance before it stops being collected. According to Henry, the fund has approximately $14 million now.