The bill would protect farmers across the state in the event of grain shortages or failed contracts.
The Mississippi Grain Indemnity Act passed the Mississippi House of Representatives on Wednesday. The bill would establish a voluntary Grain Indemnity Trust Fund that would go toward compensating Mississippi growers when grain warehouses and dealers are not able to meet legal obligations to farmers.
The bill, HB 1389, passed by a vote of 111-6 and now heads to the Senate for consideration. The legislation was crafted by the task force led by farmers at no cost to taxpayers.
Commissioner of Agriculture and Commerce Andy Gipson applauded the House on the passage of this bill.
“House Speaker Philip Gunn took an early interest in this issue after seeing the impact a failed grain warehouse or grain dealer could have on farmers, their community, and the state,” said Gipson. “I’m thankful he authored this legislation based on the Task Force’s recommendations, and I and many Mississippi farmers thank the entire House for passing this important legislation. The Chairman and Vice-Chairman of the House Ag Committee, Bill Pigott and Vince Mangold, also deserve praise and thanks for their leadership.”
Gipson said in a release that the Act would provide payments to any participating agricultural producers in the event there are contract losses due to the failure of a grain dealer that is licensed by the state. The Act also protects those producers in the event of storage losses due to a failure of grain warehouses.
The Fund would be filled through a collection of voluntary producer assessments, not taxpayer dollars. It would be administered by a board that consists of the following: Commissioner of Agriculture and Commerce and six other members appointed by Mississippi Farm Bureau and Delta Council, and two at-large producers appointed by the Commissioner. These trustees would evaluate claims when a failure occurs and authorize payments to be made from the Trust.
“This farmer-driven approach came from the work of the Mississippi Grain Indemnity Task Force chaired by Ted Kendall. The legislation is voluntary and taxpayer funds are not used. I encourage legislators who support this effort by farmers to continue to support this program as it moves through the legislative process,” Gipson continued.
Highlights of House Bill 1389
- The program is voluntary. Producers can opt out of the payment of assessments by notifying the Commissioner by June 1 each year of their desire NOT to participate in the program for the current crop year.
- Producers who do not opt out would pay an assessment of 0.2 percent of the value of corn, grain sorghum, oats and wheat sold between July 1 and following June 30. The assessment would be levied only on grain sold during the assessment period produced during the enrolled crop year.
- Assessments would be collected until $20 million is in the trust. When the balance of the trust falls below $18 million, assessments would be reinstated.
- Assessments would be collected by all State-licensed grain warehouses and grain dealers and Federally-licensed grain warehouses.
- Producers who choose to participate in the program for a crop year would be eligible to submit a claim when a State-licensed grain dealer or a State or Federally-licensed grain warehouse fails and the producer has not been fully paid for that crop year’s production of grain no matter in which year the failure occurs.
- The Trust could only be used to pay producers for eligible losses and administrative costs associated with the Trust. These funds could not be used by the State for any other purpose.
- Claims would be paid only from the Trust and if claims exceed the amount in the trust, claims would be paid on a pro-rata basis.