State will distribute millions to farmers of Salamonie Mills and Agland Grain

News

HUNTINGTON, Ind. (WANE) — Farmers will soon receive partial payments for grain lost due to the failures of Salamonie Mills and Agland Grain.

The announcement came during a virtual public board of directors meeting of the Indiana Grain Indemnity Corp, Wednesday.

The total cost to farmers and groups is over $9.2 million dollars.

Background:

Salamonie Mills and Agland Grain are a grain mill company that supplies a wide range of agriculturally-related products including livestock feed and grain bin storage in both Huntington and Wells Counties.

In March, the Indiana State Department of Agriculture and the Indiana Grain Buyers and Warehouse Licensing Agency temporarily suspended the mill’s licenses. According to court documents, owners of the mills had defaulted on two separate loans of more than $8 million to First Farmers Bank & Trust.

Then in April owners voluntarily surrendered their licenses at all locations, effectively closing the mills for the foreseeable future. First Farmers Bank & Trust foreclosed on Salamonie Mills properties and in late July all locations were sold at a public auction for a total of $633,700. Agland Grain properties remain closed, their licenses still inactive at this time and are not for sale or up for auction.

Since the surrender of the mills’ licenses, the Indiana Grain Buyers and Warehouse Licensing Agency has been collecting and reviewing company records to identify farmers who may have been impacting by the closure. In July the state held an informational meeting for producers impacted by the closure of Agland Grain.

Grain Indemnity Fund:

The Grain Indemnity Fund will help protect grain farmers impacted by the closure. In the event a licensed grain buyer fails to properly operate their business, 100% of stored grain and 80% of other grain transactions are covered up to 15 months prior to the failure of the grain buyer.

Under state law, grain producers are automatically in the program and contribute to the fund 0.02% of the gross value of their produce at the time of a sale during collection periods. Collections start when the fund drops below $20 million.

There have only been two collection periods since the fund was founded in 1995. According to the Indiana Grain Indemnity Program website, the fund has been used 12 times distributing nearly $9 million in payment.

The Grain Indemnity Fund today has over $36 million dollars in it. This fund covers participating farmers up to certain amounts for their grain sold at a licensed grain facility.

Meeting:

Indiana Grain Indemnity Corp, held a virtual public board of directors meeting Wednesday to discuss the facts, findings, and final orders of Salamonie Mills and Agland Grain.

Combined, the documents list more than 200 farmers and/or groups who were impacted by the grain elevator companies’ closures.

Farmers from multiple counties, not just Huntington and Wells where the mills were located, were impacted. The reimbursement payments range from a few dollars to hundreds of thousands of dollars.

However, there were more than 30 farmers who were found to be outside the 15 months allowable under state law for reimbursement. Their loss was not stated. What was stated was why the state declined to pay.

Several farmers filed complaints with the state that the owners of the mills sold the wrong grain. Instead of selling the grain first in and first out, meaning the company would sell older grain first before selling newer grain, Salamonie and Agland did the opposite. This left dozens of farmers out of the 15 month time period.

In documents, the state said that if a farmer disagreed with the Company’s pricing or payment procedures, there was sufficient time to raise the issue directly with the Company, but he did not. It is a producer’s responsibility to confirm how his or her bushels of grain are sold before accepting payment, and not something the Agency should address or adjust after the fact.”

In total, more than 200 farmers and/or groups lost a complained total of more than $9.2 million dollars. The bulk of the losses stems from Salamonies Mills. The total does not count for more than 30 farmers who were found to be out of the 15 month period.

With a unanimous vote, the board passed a resolution that would start sending participial payments to producers. Checks are estimated to be mailed and delivered by the end of the year if not the first part of the new year.

During the meeting guest, Amy Cornell and Andy Tauer spoke on what bills could be coming from the Indiana State House and Senate this legislative year. Items that could be included, but not limited to: an independent review of the Indiana Grain Buyers and Licensing Agency, more training for auditors as well as new rules about enforcement with grain failures. Borth Cornell and Tauer agreed that pushing back the 15 months time frame seemed unlikely.

WANE 15 reached out to both the house and senate to learn more about the proposed bill(s). Representatives say the bill(s) are still in the early phases.

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