Committee moves to protect grain indemnity account balance after processor bankruptcy claims

Chair Anderson presented House File 3549, which would limit withdrawals from the grain indemnity account and direct that account funds be used only for program administration and payments to producers when processors fail to pay. The indemnity fund was seeded with a $10 million general fund deposit and accrues interest; Anderson said the account has been tapped previously and now faces claims after a Nebraska firm that operated in Minnesota went bankrupt and producers filed claims totaling about $800,000 so far.

Under existing statute, the Agriculture Commissioner may assess producers if the fund balance falls below a statutory threshold; department staff told the committee that a 0.02% assessment on grain sales could be triggered if the fund drops under $8,000,000 and that hardship considerations are part of the statute. Representative Vang asked whether the bill intends to appropriate the additional $5 million to reach $15 million; Anderson said the bill does not appropriate the $5 million but would prevent non‑statutory withdrawals until the fund reaches the $15 million ceiling.

Members raised accountability concerns—asking whether processors that go bankrupt could face oversight or other remedial steps—and urged provisions ensuring the fund is used only for its intended indemnity purposes. Several members supported preserving the fund until it reaches a designated balance and avoiding near‑term assessments on producers facing tight markets. The committee laid the bill over for additional work and potential clarifications related to accountability and assessment timing.