Tennessee Grain Indemnity Fund
The Tennessee Grain Indemnity Fund was created by an act of the Tennessee General Assembly in 1989 to provide protection for grain producers against the financial failure of grain dealers and warehouses for the purpose of promoting "the state's welfare by improving the economic stability of agriculture."
History and Overview
A referendum was held in June 1990 in which a majority of eligible grain producers voted in favor of the assessment of one cent ($0.01) per bushel on soybeans and one-half cent ($0.005) per bushel on all other grain to fund a program to compensate claimants in accordance with the statute for losses caused by a grain dealer or warehouse failure. The fund is managed by the TDA. The original legislation in 1989 provided for a $3 million minimum balance, which was reached and assessments ceased in April 1997.
Since the fund's creation, $958,996 has been paid in claims to 76 producers for losses sustained as a result of a grain dealer or warehouse failure.
In 2011, the Tennessee General Assembly passed an amendment to the Tennessee Commodity Producer Indemnity Law increasing the minimum fund balance to $10 million upon the reactivation of the assessment. Reactivation of the assessment is initiated when the fund balance falls below $3 million, which has now occurred. In accordance with the law, the Commissioner of Agriculture has ordered the reactivation of the assessment effective March 1, 2013. All secured grain warehouses and dealers will be notified to initiate bushel assessments from producers at the rate of one cent per bushel for soybeans and one-half cent per bushel for all other grains.
Under the amended law, assessments are to continue until the fund balance reaches $10 million, at which time the assessments shall be suspended. The law also provides that assessments shall be reinstated when the new minimum fund balance falls below $8 million.
The bushel assessments shall, on or before the 20th day of the month following the end of the month in which such commodities are sold to the purchaser, be remitted by the purchaser to the Department of Agriculture to be deposited in the fund.
State Laws and Rules
For More Information
Grain dealers and warehouses contact Evan Boyd, (731) 514-5708 / Evan.Boyd@tn.gov
Commodity producers contact David Waddell, (615) 837-5331 / David.Waddell@tn.gov