If you weren’t around in the 1970s, perhaps your dad or granddad can explain what led to the establishment of a grain indemnity fund in Indiana. One farmer remembers all too well. In his first five years of farming, he was stung by two elevator failures. Both were local elevators whose owners were good-hearted people who found themselves on the wrong side of the ledger. This farmer never recovered most of his money for grain on deferred pricing.

It took a few years of debate because Hoosiers aren’t fond of assessments, but by the mid-’80s, the Indiana Grain Indemnity Fund was established. A board oversees the fund. Grain elevators are licensed by the Indiana Grain Buyers and Warehouse Licensing Agency, which is housed in the Indiana State Department of Agriculture.

Related: Protect your investment in stored grain at elevators

Bruce Kettler, director of ISDA, answers frequently asked questions about the fund:

Is there an assessment on farmers currently to add money to the fund? No. It is currently at about $32 million. However, the claims process is still underway from the Salamonie Mills and Agland Grain Inc. failures in northeast Indiana in 2020. We anticipate that after those claims are paid, the fund should be in the $26 million to $28 million range. Collections don’t start until the fund dips to $20 million. Then assessment resumes and continues until the fund reaches $25 million. If it reaches $25 million during the year, collection continues until the end of the state’s fiscal year.

How much is the assessment when it is collected? By law it’s 0.2% of the value of the grain, and it’s collected and handled by the buyer at the point of sale. If corn was $5 per bushel and a collection began, it would amount to 1 penny per bushel. It also applies to soybeans and wheat.

How many times has there been an assessment? Only twice so far — in the beginning to set up the fund, and in 2017, after an elevator failure dropped the fund below the trigger level.

If there is a failure, how does the process work for farmers who had grain in the elevator? Our agency assists, and farmers file claims. If grain was on-storage and the date of delivery was within 15 months of the official failure date, they are eligible for 100% reimbursement on their loss.

However, deferred pricing is different. With deferred pricing, title of the grain passed to the elevator. By law from the beginning, farmers with deferred priced grain losses within 15 months of the failure date qualify for only 80% of the total claim.

Under the new, updated law enacted this year, deferred pricing contracts in Indiana cannot extend beyond the end of the marketing year for that crop. For example, if you place 2021 corn on deferred pricing, it must be priced on or before Aug. 31, 2022. Those crop years are set forth in statute and mirror USDA definitions.

What can farmers do to protect their position in stored grain? Keep good, detailed records of every transaction. I can’t stress this enough. Keep every receipt and statement from an elevator. If you have proof of a claim meeting legal requirements, even if it isn’t on an elevator’s books, it will likely be honored.