By NANCY VORIS
Indiana Correspondent

INDIANAPOLIS, Ind. — Indiana’s grain warehouse regulatory system, already a model for other states, was in the international spotlight last week as a Serbdelegation visited Hoosier farms and grain storage systems.  

The Indiana State Department of Agriculture (ISDA) welcomed a delegation of Serb experts from its Ministry of Agriculture, Forestry and Water Management. Serbia has chosen Indiana’s system as the model it will try to follow as it implements a grain warehouse receipts system of its own.
The delegation toured Purdue University, Kelsay Farms and Kokomo Grain and met with Lt. Gov. Becky Skillman and representatives from Indiana Grain Buyers, Indiana Corn Marketing Council and Indiana Soybean Alliance.

“We know Indiana is a national leader in agriculture, but it’s rewarding to see our influence spread across the globe,” said Skillman, who serves as Indiana’s secretary of agriculture and has led four international trade missions for the industry. “This speaks volumes about the progressive system in place right here in Indiana.”

Indiana’s Grain Indemnity Fund, adopted in 1997, insures farmers who store grain at licensed warehouses, protecting them in the event of a grain business failure. Farmers are protected by the fund for 100 percent of stored grain and 80 percent on other grain transactions if they are doing business with licensed entities.

The fund is so efficient that farmers have not had to pay into it since 1998. More than $14 million is now available to grain farmers doing business with licensed warehouses.

“(The system) has been hailed as a success and a way to protect farmers,” said Joe Kelsey, ISDA director.

Michigan has adopted a law nearly identical to Indiana and other states, including Missouri and Texas, are also looking at Indiana’s model. Serbia has passed grain warehousing laws and is looking to leaders from Indiana and Michigan to help implement its new system.

In March, Jerome Hawkins, director of the Indiana Grain Buyers and Warehouse Licensing Agency, spent two weeks in Serbia where he worked with the Ministry of Agriculture and trained a group of Serb warehouse inspectors on Indiana’s policies and procedures. He also provided input to the warehouse operations and inspectors manuals.

The trip cost the state of Indiana nothing, as all expenses were covered by the European Bank for Reconstruction and Development and the Food and Agriculture Organization of the United Nations.

Hawkins said Serbia has now passed a law for a grain indemnity fund, but needed guidance on how to put the law into practice. The Serb visit to Indiana helped him explain how to implement the law.

“We were able to tell them what we do and why we do it,” Hawkins said. “After seeing their system, we were able to say, ‘This is what you need to do to protect the Serbian farmers.’”

Indiana’s voluntary indemnity program was funded by producers who paid a premium into the fund beginning in July 1996. Two-tenths of a percent of each grain sale was remitted into the fund until the fund reached its legal cap of $10 million in 1998.

The Indiana Grain Indemnity Fund has paid producers more than $3.8 million involving 10 elevator failures since 1996. The fund is governed by a 10-member board of directors appointed by agricultural and banking organizations in the state. Any grain producer who has not requested and received a refund of a premium is protected under the program.