Is a grain elevator failure in SW Indiana a symbol of the financial stress being felt by the grain industry today? If so, Indiana’s Grain Indemnity Fund is working to protect farmers from losses when an elevator goes broke. In Mid-April, Cline grain, a firm with facilities in Montgomery, Davies, Fountain, and Hendricks counties closed its doors leaving farmers wondering what would happen to their grain stored there or money they were owed.
Melissa Rekeweg, acting director of the Indiana grain warehousing and licensing agency, told HAT the state has taken over the records and is in the process of determining what farmers are owed. She said a claims hearing is set for this week at the Montgomery County Fairgrounds in Crawfordsville. Those who have claims can attend the hearing or fill out claim forms on line at the ISDA web site.
She said claimants will receive what they are owed from the Indiana Grain Indemnity Fund this summer, “They will receive 100% payment on stored grain and 80% deferred pricing contracts.” She gave no indication on why Cline closed except to say they voluntarily turned their license and records over to the state.
Established in 1995 to protect farmers in the case of a grain handler collapse Rekeweg says the insurance fund is ready to handle any issues that come up as a result of the current tough farm economy, “Right now, the fund is open which means producers are paying into the fund each time they sell grain. It will remain open until we reach $25 million. This is an insurance program to protect farmers from a loss if a licensed facility closes.”
Rekeweg says each licensed facility is audited once a year and more often if there are problems. She is hopeful that the failure of Cline Grain is not the beginning of a series of failures caused by low grain prices, “I hope this is not a trend. Agriculture is in the midst of a downturn, but that does not mean that this kind of collapse will continue to occur.” Since the fund was established, it has paid out $4.2 million covering 11 facility failures. For more information on the fund or the Cline Grain case, contact ISDA at (317) 232-1360.