REYNOLDSBURG, Ohio – Effective July 1, the Ohio Department of Agriculture will stop collecting the half-cent per bushel assessment currently collected on grain deposits.
The collection will cease because the cap of $10 million was reached to fund the Agricultural Commodity Depositor’s Fund.
The fund reimburses farmers when a licensed grain handling facility becomes financially insolvent and cannot pay farmers for their grain.
“With fewer facilities today handling more grain than ever, each insolvency affects more farmers,” Ohio Agriculture Director Fred Dailey said.
“By raising the fund cap, it will go much farther to protect farmers’ assets.”
Collections. House Bill 421, sponsored by Rep. John Schlichter, R-Washington Court House, raised the fund cap from $4 million to $10 million to improve protection for farmers in case of a major grain elevator insolvency.
The department of agriculture began collecting fees in 2004.
The $10 million cap was reached in March so the bill allowed fee collection to cease beginning with the new state fiscal year July 1.
Hundreds of claims. Farmers have filed hundreds of claims over two decades that reduced the fund balance to a dangerously low level of $3.65 million.
Since it was established in 1983, the fund has reimbursed farmers more than $8.45 million for 1,302 claims in 35 grain elevator insolvencies.
Ohio has fewer than half the number of elevators but about the same storage capacity that existed when the fund began.
The state currently has storage capacity for approximately 360 million bushels of agricultural commodities at 451 licensed facilities.
Several companies have the capacity to store millions of bushels at a single site.
Why it’s needed. It is routine for farmers to deliver harvested grain to an elevator, collect a delivery receipt and await payment for their crops at a later date.
It is similar to a person depositing a paycheck into their local bank and expecting deposited funds to be available upon demand.
The indemnity fund reimburses eligible farmers for a major portion of their grain deposits in the event of an insolvency at a licensed facility.