Grain farmers elect not to establish a statewide grain indemnity fund
Texas grain farmers voted against the establishment of a statewide grain indemnity fund in the referendum held by the Texas Grain Producers Indemnity Board, according to the results released after the canvassing of the ballots.
Farmers across the state voted in the referendum, which was held Nov. 19 until Dec. 7, 2012, on the statewide establishment of a grain indemnity fund. According to the Texas Department of Agriculture, who canvassed the ballots, there were 1,678 ballots submitted during the referendum with 1,171 farmers voting in opposition and 507 farmers voting in favor--preventing it from obtaining the required two-thirds majority to pass.
"Over the years, many producers across Texas have been forced to deal with the financial pain that comes when a grain buyer fails. Unfortunately, Texas grain producers will continue to face this risk for at least another crop year," TGPIB Chairman Dee Vaughan said. "The TGPIB will be meeting soon with stakeholder groups to determine the best course of action for the future."
During the referendum, which was held in accordance with the referendum rules found at 4 Texas Agriculture Code, Ch. 17, Subchapter A, Div. 3 by the TDA, farmers voted on establishing an assessment rate within a range of 0.2 percent to 0.6 percent of the final sales price of grain. The assessment would have been collected and remitted to the TGPIB effective Feb. 1, providing coverage for producers for the 2013 crop season.
The TGPIB was established as the result of legislation passed by the 2011 Texas legislature and signed into law by the governor. Rep. Larry Phillips of Sherman and Sen. Craig Estes of Wichita Falls introduced the legislation after a series of grain buyer financial failures in recent years resulted in millions of dollars in losses to Texas grain producers.
The establishment of the grain indemnity fund would have allowed the TGPIB to award up to 90 percent of the financial losses suffered by producers of corn, sorghum, soybean and wheat when grain buyers fail to pay for grain due to a financial failure.
To learn more about TGPIB and the proposed indemnity fund program, visit www.TexasGrainIndemnity.org.