State Representative Gary Click, a Republican from Vickery, Ohio, recently announced that the Grain Indemnity Modernization Act has been passed into law. The act, also known as HB 95, was included as part of the state's two-year budget, HB 33, and will take effect on October 3, 2023. Representative Click introduced the bill in March 2023, with the aim of enhancing coverage and reimbursement rules to protect farmers who utilize the Ohio Grain Indemnity Fund.
The Grain Indemnity Fund was established by the legislature in 1983 to provide compensation to farmers for the value of their lost grain in the event that the grain handler becomes financially insolvent. The fund is funded through a half-cent per bushel assessment on grain marketed at licensed elevators. Since its inception, the fund has reimbursed farmers over $19.4 million and is required by law to maintain a minimum balance of $10 million.
The need for modernization became apparent in May 2021 when Evergreen Grain Co. in Clyde, Ohio was declared insolvent. Many local farmers who sought relief from the Grain Indemnity Fund were not fully compensated due to the outdated reimbursement structure of the fund. This prompted Representative Click to introduce the Grain Indemnity Fund Modernization Act, which received input from the Ohio Farm Bureau, the Ohio Dept. of Agriculture, and affected farmer Roy Gibbs.
The act includes several revisions to better protect farmers, including extending the coverage window for open payable grain from 30 to 45 days following the handler's insolvency, extending the reimbursement window for deferred payment grain from 90 days to 1 year, and establishing a 2-year coverage period for delayed price grain. Other changes include adjusting the reimbursement structure to provide a flat rate of 75% for qualifying, unspecified circumstances.
Representative Click expressed his belief that the act provides a healthy compromise that benefits farmers without negatively impacting the indemnity fund. He thanked Roy Gibbs, Todd Thatcher, and Director Baldridge at the Department of Agriculture for their assistance in making the bill a reality. Farmers in Ohio can look forward to increased protections and improved reimbursement processes when the Grain Indemnity Modernization Act takes effect.
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