Ohio’s grain Indemnity Fund was the chief topic of discussion at a recent Ohio Farmers Union Town Hall in Archbold.
Northwest State Community College President Thomas Stuckey, State Sen. Cliff Hite, David Simmons of the Ohio Dept. of Agriculture and Roger Wise and Bruce Yancey of the Ohio Farmers Union spoke and answered questions from the 50 to 60 meeting attendees.
The meeting was hosted by the OFU chapters in Defiance, Fulton, Henry and Williams Counties and Northwest State Community College.
Farmers in this area of northwest Ohio have been affected by the recent failure of Archbold Elevator, Inc. located at 3265 CR 24 in Archbold, Ohio. ODA has recently approved 85 claims associated with its failure submitted to the state grain Indemnity Fund. Those claims are to be paid pending approval of the Ohio
Controlling Board on July 11. The total cost to the Fund of the Archbold claims will be $3.4 million.
Simmons’ role at ODA is administrator of the section of the agency that oversees the Indemnity Fund among other programs related to grain, feed and seed. He gave a presentation about the history of grain elevator regulation in Ohio and updated farmers on the health of the Indemnity Fund.
Prior to legislation passed by the Ohio General Assembly in 1983, Ohio’s farmers had no recourse if an elevator went bust – they lost their grain, their investment. The Ohio Farmers Union had worked for nearly a decade prior to 1983 urging the state of Ohio to establish a grain elevator indemnity fund. In 1982, after 11 elevator failures around the state – and some farmers on the verge of losing everything – the legislature and then Gov. Dick Celeste listened.
Simmons told the Archbold meeting that subsequent legislation strengthening the governance of the fund and regulation of elevators has established Ohio’s Indemnity Fund as the strongest such state law in the nation. There are 15 states with similar programs.
As of early July, the Indemnity Fund is valued $12.5 million, $2.5 million over the fund’s “trigger.” The trigger refers to the amount ($8 million) that a one-half cent per bushel levy is paid by farmers to maintain the fund in an amount of at least $10 million. When the fund falls below $8 million, the per bushel levy is in effect at elevators until the fund is at $10 million. There are currently two pending claims against the fund, the Archbold claim and another in Erie County for $756,000. Ohio farmers may once again be paying the per bushel charge to replenish the fund which will soon fall to near $8 million.
Simmons reports that the future of the fund is secure, despite the ongoing move toward austerity at the state level. One reason is that the fund does not draw any tax dollars from state general revenues due to the per bushel levy which can be collected and the solid financial management of the fund which also draws interest. Simmons did report, however, that increased grain storage capacity in Ohio and historically high corn, soy and wheat prices have Ag officials discussing increasing the fund cap and trigger mechanisms as well as some further clarifications in the law about how losses are covered.
Hite commented that the fund seems to be working as intended and the issue has “not appeared on the radar” of the Senate Ag Committee. Wise, president of the Ohio Farmers Union told Hite that the proposed changes being discussed at ODA seem to make sense and that OFU looks forward to working with ODA and Hite’s committee to ensure that this protection for Ohio’s farmers is kept strong.