A referendum on the statewide establishment of a grain indemnity fund held by the Texas Grain Producers Indemnity Board will remain open through Dec. 7 across the state.
A grain producer indemnity fund is essentially a method for producers to self-insure against the financial risks associated with storing or selling grain. Under current conditions a farming operation that took generations to build can be wiped out overnight by a catastrophic event like the closing of a grain elevator or the failure of a buyer to pay for a grain delivery. Crop insurance can provide some protection before a crop is harvested, but after harvest, a producer can be totally exposed until full payment for a crop is credited into one’s bank account.
The grain indemnity fund board may award up to 90 percent of the financial losses suffered by producers of corn, sorghum, soybean and wheat when grain buyers fail to pay for grain due to a financial failure. TGPIB was established as the result of legislation passed by the 2011 Texas legislature and signed into law by the governor. Rep. Larry Phillips of Sherman and Sen. Craig Estes of Wichita Falls introduced the legislation after a series of grain buyer financial failures in recent years resulted in millions of dollars in losses to Texas grain producers.
Eligible voters in the referendum will vote to establish an assessment rate within a range of 0.2 percent to 0.6 percent of the final sales price of grain. The assessment, which will be set each year by the TGPIB, will be collected and remitted to the TGPIB effective Feb. 1.
Any producer who has produced corn, sorghum, soybeans or wheat within the last 36 months is eligible to vote. This includes owners of farms on which grain is produced or an owner’s tenant or sharecropper engaged in the business of producing grain or causing grain to be produced for commercial purposes.
The referendum is being held by mail ballot. Ballots are available at all Texas A&M AgriLife Extension Service county offices during regular business hours.
For a ballot to be valid, it must be mailed to the Texas Department of Agriculture, P.O. Box 12847, Austin, Texas 78711, with a postmark date of no later than Dec. 7.
To learn more about TGPIB and the indemnity fund, visit www.TexasGrainIndemnity.org.
For more information about these topics contact the AgriLife Extension office, Clay County at (940) 538-5042.