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Grain regulation changes underway in Indiana

Courtesy of ISDA Bruce Kettler speaking at podium
ADDRESSING CHANGE: ISDA Director Bruce Kettler explains major changes in Indiana grain regulations, such as a shorter period for delayed pricing, which went into effect due to legislative action.
Ag Director Bruce Kettler explains changes in grain warehouse law.

Recent elevator failures spurred the Indiana General Assembly to make changes in statutes concerning grain regulation. Bruce Kettler, director of the Indiana State Department of Agriculture, notes that the Indiana Grain Buyers and Warehouse Licensing Agency is part of ISDA.

In this interview, Kettler describes changes made by the Legislature. The first changes primarily concern the Indiana grain warehousing law.

What changes are coming for the Indiana grain buyers agency? The updated law gives the agency more teeth in assessing penalties if grain licensees are found in noncompliance with financial requirements in the law. If they don’t meet these and are found in noncompliance now, the agency can assess stiffer monetary penalties. The agency has discretion in determining when to use those penalties.

Did the Legislature increase bonding requirements for grain licensees? Yes. The bonding caps were increased. In simple terms, the agency can ask a licensee to put up a bigger bond to cover in case of failure than it could before.

The law imposed some limits on deferred pricing, which affects both growers and elevators. Can you explain it? First, remember that with deferred pricing, ownership of the grain passes to the elevator. If you have grain on storage instead with a warehouse receipt, you still own the grain. The law now limits both growers and elevators from continuing deferred pricing contracts longer than the marketing crop year.

For example, if you put 2021 corn on deferred pricing, the contract year for 2021 corn ends Aug. 31, 2022. So, you must execute those deferred pricing contracts by Aug. 31, 2022. The same applies for soybeans. For wheat, the marketing year ends May 31. So, 2021 wheat on deferred pricing at an elevator must be priced by May 31, 2022.

Language in the grain indemnity statute still says that claims for deferred pricing can only go back 15 months from the elevator’s official failure date. That was not changed. You should also be aware that even with the new law changes, if you have grain on deferred pricing and the elevator fails, you can only recoup 80% of your loss through the Grain Indemnity Fund.

The new law requires a performance review of the Indiana Grain Buyers and Warehouse Licensing Agency. Is that underway? The review is not a simple process. We’re finalizing procedures to seek a third party capable of doing this type of review. There are lots of details involved. However, our expectation is that we would like to have someone in place to do the review by early fall, or even sooner.

Many improvements have been made since the current director came on board. However, we recognize that we can always learn more, and there may be better ways to do things. We hope findings from the review help us improve.

Do some of the new changes affect the grain indemnity board? The board can provide funding to the agency for three purposes: professional development of staff, technology improvements and for a performance review of the agency. The amount of money which the board can approve for these purposes increased. Note that before we can do the performance review, we must ask the grain indemnity board for funds to hire a third party to do the review.

Comments? Email [email protected].

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