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PSC Conducts Workshop on Grain Insurance Fund
The Nebraska Public Service Commission conducted a September 17, 2008 workshop on the possible establishment of a producer financed insurance fund for the further protection of parties to grain transactions. The insurance fund would be separate from the current state grain warehouse and dealers act which requires licensing and bonding ($500,000 max for warehouse, $300,000 for dealers) for the protection of depositors.
PSC Warehouse staff and commissioners framed the circumstances leading up to the workshop, including the results of recent closers and the sell-off of assets. Commissioners also detailed other state programs that collect and administer such funds. The Nebraska Grain and Feed Association (NGF) presented survey results from member headquarters and grain dealers regarding possible additional safeguards such as increased financial standards for grain warehouses or higher bonding requirements. Survey questions and results are available by calling NGF.
At the end of the nearly two-hour workshop, no consensus was reached between the PSC, grain and warehouse interests or farm organizations on the establishment of a grain insurance fund. What was apparent is that current bonding requirements at today’s commodity prices are out of pace and are inadequate to cover all losses if a failure would occur. The PSC said that they had no intention in going before the 2009 Legislature requesting the establishment of the insurance fund or for seeking changes in current licensing and bonding requirements. However, PSC will attempt to convene another workshop on the issues surrounding current levels of protection. Additionally, the PSC has been invited and are expected to make a presentation on the insurance fund proposal on the NGF Trade Show floor, at the Ag Classic in Kearney, on December 16.
Many of you received the survey by email on August 26 but have not respond. (Your opinion is important so if you have not yet responded, please call or email me and I will FAX you the survey.) Please answer all the questions, and email your response directly to me at pat.ptacek@negfa.org, or FAX them to the office at 402-476-3401. Please be assured that your response will be kept strictly confidential.
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Nebraska Grain and Feed Association
1233 Lincoln Mall, Suite 200
Lincoln. NE 68508
Phone: 402-476-6174
Fax: 402-476-3401
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