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Senate of Pennsylvania
Session of 2021 - 2022 Regular Session


Posted: October 21, 2021 11:12 AM
From: Senator Judith L. Schwank and Sen. Elder A. Vogel, Jr.
To: All Senate members
Subject: Protection for Pennsylvania's Grain Farmers
Soon, we plan to introduce legislation that would protect farmers from grain handlers that becomes insolvent. Currently, Pennsylvania has no regulations to provide any indemnification coverage to farmers if a grain buyer goes out of business. This legislation stems from two Berks County farmers who lost thousands of dollars when the dealer that they enlisted to sell their grain went out of business and declared bankruptcy.

Under this bill, a special fund, known as the Agricultural Commodity Indemnity Fund, (ACIF) will be created to reimburse farmers if a grain handler fails or becomes insolvent.  The ACIF will be funded by: (1) a ½ cent per bushel fee paid by farmers selling or storing grain with licensed grain handlers, and (2) annual grain handler license fees.   The per-bushel assessment will be discontinued once the fund reaches $10 million, and the assessment will not be reinstated unless the fund drops to $8 million.
The PA Department of Agriculture (PDA) will administer the law, which will include establishing and issuing handler licenses and fees, enforcing statutory liens against failed handlers, reviewing handler financial statements to ensure solvency, and adjudicating claims seeking indemnification.
Several states offer similar safeguards, and Pennsylvania’s lack of protection not only exposes its grain farmers to financial loss, but it also limits farmers in surrounding states from wanting to do business in Pennsylvania.  This legislation is supported by Pennsylvania Farm Bureau and is based on laws adopted in other states.  Please join us in sponsoring this legislation.

Introduced as SB1032