Commissioner Staples Announces Statewide Grain Producer Referendum to Establish Indemnity Fund

Agriculture Commissioner Todd Staples today announced the Texas Department of Agriculture will conduct a referendum on the establishment of a statewide grain indemnity fund. The fund is a method for grain producers to self-insure against the financial risk associated with placing their grain on deposit with a storage facility. Voting on the measure begins statewide Nov. 19, 2012 and closes Dec. 7, 2012.

“This is an important issue for consumers and the thousands of grain producers who contribute more than $2.3 billion in sales to the Texas economy,” Commissioner Staples said. “This fall, producers have the opportunity to decide whether or not an industry-funded indemnity program is a good method for protecting themselves from financial losses due to warehouse failures.”

Eligible producers of corn, grain sorghum, soybeans and wheat may vote on whether they wish to pay an assessment to establish a fund that would cover up to 90 percent of the financial losses suffered by grain producers when grain warehouses or grain buyers fail to pay for grain due to a financial failure. The fund will be administered by the nine-member Texas Grain Producers Indemnity Board (TGPIB) appointed by Commissioner Staples as a result of HB 1840 passed in the previous legislative session.

If approved, each year, the TGPIB will determine an assessment rate between 0.2 percent and 0.6 percent of the final sales price of the grain. Producers who suffer losses as a result of a financial failure of a grain buyer can make a claim to the TGPIB fund.

Grain producers who have sold grain in the past 36 months are eligible to vote in the referendum. Eligible grain producers include persons who own a farm on which grain is produced or the owner’s tenant or sharecropper who is engaged in the business of producing grain or causing grain to be produced for commercial purposes.

Voting for the grain indemnity fund will be conducted by mail ballot. Postage-paid ballots are available at Texas A&M AgriLife Extension offices beginning Nov. 19, 2012. For those unable to access an AgriLife office, a ballot may be requested from TDA by contacting Lance Williams at or (512) 463-3285.

Valid ballots must be postmarked no later than Dec. 7, 2012, and mailed to the Texas Department of Agriculture, P.O. Box 12847, Austin, Texas 78711. Ballots will be counted on Dec. 17, 2012, and Commissioner Staples will certify the results.

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