Grain indemnity fund legislation passes ag committees

The legislation, HF2718, operated by the Department of Agriculture would provide sellers between half and all money owed when a grain buyer fails.

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Farmers could gain some protection with legislation that creates a grain indemnity fund.
Erin Brown/Grand Vale Creative

Grain indemnity fund legislation cleared the agriculture committees in both chambers.

The legislation, HF2718 , operated by the Department of Agriculture would provide sellers between half and all money owed when a grain buyer fails. It's a move that brought praise from groups like the Minnesota Farmers Union.

“MFU members have advocated for a grain indemnity fund since 2015 when the Porter elevator failed and family farmers lost thousands of dollars,” said MFU President Gary Wertish in a news release on Wednesday, March 15. “The bonding system in Minnesota doesn’t work, leaving farmers vulnerable to grain elevator collapses. There are more than a dozen states with indemnity funds, including North Dakota, Iowa and Illinois. We need to add this protection for Minnesota’s family farmers, and I thank Sen. Putnam, Rep. Cha and Rep. Anderson for their leadership on this legislation.” 

Several groups wrote in opposition to the legislation as written.

"Through policy developed during our grassroots process in November, our membership clearly stated a grain indemnity fund should not be funded through a fee-based appropriation," read a statement from MFB president Dan Glessing to the chair of the House Agriculture Finance and Policy committee. "HF2718 as written only delegates $5 million from the general fund. The bill also includes a provision allowing for the Commissioner of Agriculture to create up to a 0.2 percent fee on the price of grain to be paid into the fund, by the farmer once the fund falls below a $9 million threshold. MFBF requests a general fund appropriation of at least $9 million, with a preference that the account be funded at $15 million."


The Minnesota Grain & Feed Association also opposed the legislation as written saying that it encourages producers to make riskier decisions and "removes the incentive for producers to do their due diligence when entering a business relationship with grain buyers."

Other agriculture bills discussed this week included:

  • Bills expanding the Beginning Farmer Tax Credit have been approved by agriculture committees in both chambers
  • Bills expanding farm permits beyond farm kids, expanding funding for broadband and funding cooperative development grants at the Minnesota Department of Agriculture.
  • Four bills to help local and regional meat processors are advancing through agriculture committees. 
  • There’s also a bill to fund training grants to help navigate regulations for meat processors (SF861/HF1303).

The constitutional adjournment deadline for the Minnesota Legislature is Monday, May 22.

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