COLUMBUS, Ohio — The Ohio Senate passed Senate Bill 66 to upgrade Ohio’s grain indemnity and handling law; this law protects farmers in the event of an elevator failure.

Updating the law, first passed in 1983, has been a priority of the Ohio Farmers Union (OFU), which was instrumental in the fund’s creation, said Roger Wise, OFU president.

The “trigger” was raised from $8 million to $10 million in S.B. 66, Wise said. When the fund falls below the trigger, farmers are assessed one-half cent per bushel of corn, wheat and beans stored at an elevator. The assessment stops when the upper limit is reached.

The upper limit of the fund was raised from $10 million to $15 million. Additionally, S.B. 66, which was sponsored by state Sen. Cliff Hite (R-District 1), clarifies the section in the grain handlers law that sets farmers as the primary lien holder in the event of elevator failures.

“The fund was getting very close to the trigger when collections would start to kick in at $8 million,” Wise said. “We thought that because there haven’t been any adjustments made to the legislation, since the prices of commodities had risen so dramatically since the end of 2007, that this would be a good time to make an adjustment.”

The Ohio Department of Agriculture (ODA) oversees the fund under the direction of David Simmons, administrator. The fund disbursed more than $4 million in 2011 after two elevator failures in Ohio, according to the OFU. The largest was the Archbold Elevator, where farmers were paid $3.4 million in claims.

The Indemnity Fund currently holds $8.3 million – just $300,000 over the trigger.

It is a good law, simple and effective, Wise said; it provides protection for farmers and it is self-funded. The elevators are inspected routinely.

“It is not an adversarial relationship,” he said. “It is one where ODA and the elevators work together to assure that the elevators are operating correctly.”

Added Brandon Kern, Ohio Farm Bureau Federation (OFBF) director of state policy, “Considering current grain prices and the impact the failure of a grain elevator could have on farmers, OFBF believes increasing the grain indemnity fund cap is a reasonable approach at this time. 

“We also support changes in the bill that would ensure producers’ claims are honored in full based on when their grain is priced, rather than if it is priced on delivery.”

The bill will now go to the Ohio House for a vote.