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PSC HEARS NO SUPPORT FOR GRAIN INDEMNIFICATION FUND, LEGISLATIVE STUDY NEXT STEP The Nebraska Public Service commission (PSC) held their previously announced workshop on the practicality of establishing a grain indemnification fund, before more than 40 participants representing grain elevators and dealers, farm organizations, ethanol facilities and cattle and banking interests. Every organization either spoke against the establishment of such indemnification fund or announced that they were still formulating policy for future legislative interim study hearings this fall. While the Nebraska Grain and Feed Association (NGF) spoke in a neutral capacity, the organization informed commissioners that they have received overwhelmingly negative comments from members. NGF was well represented by the attendance of four members of the Board of Directors and about a half dozen other elevator interests. Those members testifying in an individual capacity unanimously opposed the creation of the grain insurance fund. Other farm organizations stated that producers need to exercise more due diligence with those grain or processing firms they currently do business with. The PSC workshop was called to gauge the farm groups’ interests in establishing a grain indemnification fund of up to $25 million, with the assessment or check off on a portion of the value of the commodity at the time it was sold. 14 other states currently have some form of grain insurance or indemnification fund. Before last September's workshop regarding the same issue, NGF sent a survey to all members regarding five questions on adding additional security to the present system. At that time, members were equally divided between a producer funded insurance program to supplement warehouse and dealers bond and higher financial standards for warehouses and dealers including CPA level audits. However, the majority of comments from members either by e-mail or phone have been quite negative toward the establishment of the Grain insurance fund. Others took exception with the PSC's proposed framework for the establishment of an indemnity program, including limiting the scope of coverage to producers only. Several members suggested that general funds should be increased by the legislature to hire a full-time CPA auditor to review the financial statements and net worth requirements currently required by the PSC, and with the authority to require more financial information or security from firms they deem as shaky. At the conclusion of the workshop, it was fairly evident that there was very little support for the application or the administration of the grain indemnification fund. Sen. Tom Carlson, current chairman of the legislature's Agriculture Committee commented that what he was hearing were three primary concerns; more transparency, accountability and enforcement. Sen. Carlson will be conducting several interim study hearings on the subject later this fall. Please look for further information from NGF on the indemnification program and for interim study meeting dates and locations.
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