By Gary Joiner
Texas farmers purchase crop insurance to protect against losses in the field. It’s a critical management tool.
But there’s also risk after harvest. At the first point of sale. If a grain buyer fails to pay the farmer due to bankruptcy or theft of grain, the grower is left holding the bag.
A great solution to manage this risk is the Texas Grain Producer Indemnity Fund. The program mitigates 85 percent of the financial losses suffered by growers of corn, sorghum, soybeans and wheat when grain buyers fail to pay for grain.
It’s producer-funded. The proposed assessment is two tenths percent of the gross sales price of the grain. It would be collected by the grain buyer and remitted to the board overseeing the fund.
Texas grain farmers will vote Dec. 5-9 whether to approve the assessment rate and establish the indemnity fund program. Only a producer who has sold grain in the last 36 months preceding the close of voting is eligible to vote in the referendum.
A referendum in 2012 to establish the indemnity fund program failed. It was a different proposal with an assessment range, not a set rate. Only 1,678 ballots were cast four years ago. Awareness and interest seemed low.
This year’s referendum is improved. It features a more economical plan for covering the producer. It’s also designed to make payments in a more timely manner.
This is not a tax. It’s designed to protect producers in the event of a financial failure of a grain buyer. There’s also a provision for assessments to be returned to producers as funds are available.
The Texas Grain Producer Indemnity Fund is worth supporting. Similar programs work well in all the other grain-producing states. It’s time Texas farmers benefit from the same protections.