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Committee approves higher assessment to replenish grain and cotton indemnity fund
Summary
Lawmakers approved House Bill 370, which raises the assessment that funds the Grains and Cotton Indemnity Fund to double annual receipts (from about $626,000 to about $1,252,000) after multiple brokerage defaults left farmers unpaid.
Representative Butler and an agriculture commissioner told the Senate Committee on Revenue and Fiscal Affairs that House Bill 370 would raise the assessment supporting the Grains and Cotton Indemnity Fund to increase annual revenue from about $626,000 to roughly $1,252,000.
A commissioner described the fund's history: it was created after a 2008 default that left farmers unpaid, and the state has since handled multiple defaults, including a recent brokerage bankruptcy that required about $5.5 million in payouts. The sponsor and the commissioner said the fund is a self‑insurance mechanism paid by farmers and not backed by the state's full faith and credit beyond amounts on hand.
Senator Wheat and others noted the bill affects only a fee on farmers, not a general appropriation; the governor’s office and agriculture stakeholders support raising the assessment to ensure liquidity should another default occur. The committee reported HB 370 favorable by voice vote.
The sponsor said the bill includes a cap mechanism so assessments would cease when a fund cap (statutory amount) is reached and resume if the balance falls.
