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Posted on Jan 3, 2013 in Featured, News Releases

Farmers choose to reject Texas Grain Indemnity Fund

Farmers choose to reject Texas Grain Indemnity Fund

WACO, Texas—Texas grain farmers have chosen to reject a producer-funded grain indemnity program to protect themselves against grain buyer failures. The Texas Department of Agriculture announced the statewide referendum results yesterday.

“We are disappointed over the vote on the grain indemnity referendum,” said Texas Farm Bureau (TFB) President Kenneth Dierschke. “However, we are satisfied that grain farmers voiced their preference on the program, and we are prepared to move forward with this decision.”

TFB supported legislation in 2011 that established farmers’ ability to vote on the Texas Grain Indemnity Fund. If approved by a two-thirds decision, the fund would have collected an assessment on sales. Participants then could file claims with the Texas Grain Producers Indemnity Board to reclaim up to 90 percent of financial losses, in the event of a grain buyer failure.

“One note of warning—grain producers should be very careful about where and to whom they market their product. There is very little protection in the process, and it is clear there will be very little assistance in case of losses through bankruptcy or otherwise,” Dierschke said.

Moving forward, Texas grain farmers remain in control of an indemnity program and may choose to repeat the referendum process at a later date.

“We are proud of the work done by a host of Farm Bureau and other agricultural leaders in developing and refining the grain indemnity concept,” Dierschke said. “We continue to believe that it could be an excellent self-help tool for grain producers. The law is on the books and if, at any time in the future, producers see the need, the indemnity idea can be put to another vote.”

Click here for high-resolution photos of Texas grain.

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