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The fund’s purpose is to provide a safety net for grain producers if they are unable to receive payment for the sale of their grain or retrieve grain left in storage at a grain warehouse. In the event that a grain firm is unable to either pay or return grain to the producer, the Indiana Grain Buyers and Warehouse Licensing Agency will call the surety and liquidate grain assets to satisfy any and all producers of record. Any producer not fully compensated by that action will be entitled to have the claim brought before the Indiana Grain Indemnity Corporation Board of Directors for consideration of payment.
The voluntary indemnity program was funded by producers who paid a premium into the fund beginning on July 1, 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.
In 2009, the statute was amended to change the amounts for suspending and reinstating the collection of premiums. In a year when the board determines that the fund is at or below $10 million, collection of premiums will be reinstated until the fund contains more than $15 million as of June 30 of any year thereafter.
The fund’s first payout occurred in 1998 in the Prairie Productions and Battleground Hybrids, Inc. failure. The most recent disbursement of the fund was to producers of record in the Nutritional Research Assn, Inc. dba Whitley Feeds Div. failure in 2008. The fund has paid producers $2,570,654.99 involving nine elevator failures since 1996.
Any grain producer who has not requested and received a refund of a premium is protected under the program. The fund is governed by a ten-member board of directors appointed by various agricultural and banking organizations in the state.