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The Indiana Grain Indemnity Program was established by the 1995 General Assembly to protect farmers in the event of a licensed grain buyer's financial failure. The Indiana Grain Indemnity Fund is voluntarily funded by producers who pay a producer premium equal to two-tenths percent (0.2%) of the price on all marketed grain that is sold in Indiana. The program provides payments to those producers that have not requested or received a producer premium refund and are economically damaged by the financial failure of a licensed grain buyer.
In the event that a licensed grain buyer fails, producers that have not requested or received a premium refund can receive 100% payment on storage losses which occur at a licensed warehouse, or 80% payment on all other financial losses from grain delivered to a licensed grain buyer. The producer's financial loss for unpriced grain is calculated using the market value of such grain on the licensed grain buyer's last day of business, which may not be the same as the sale price, less certain charges, times either 80% or 100%.
Since 1996, the Indiana Grain Indemnity Fund has paid producers approximately $4.2 million involving 11 failures. The most recent failure was in 2011.
Legislative Changes – Effective July 1, 2015
Starting July 1, 2015, the Indiana Grain Indemnity Fund will begin collecting producer premiums equal to two-tenths percent (0.2%) of the price on all marketed grain that is sold in Indiana. Collections will continue until the fund contains more than $25 million as of June 30 of any given year. Producer premiums are collected by the grain buyers and quarterly remitted to the Indiana Grain Indemnity Corporation.