Illinois Grain Insurance Fund
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[August 09, 2008]
URBANA -- By following a list of "good
practices," Illinois farmers can maximize their protection under the
Illinois Grain Code, according to a new University of Illinois
Extension report. The report, "Illinois Grain Insurance Fund:
Protecting Farmers if an Elevator Fails," is available online from
Extension's farmdoc site. (See
The report, made possible with the support of the Illinois Bar
Foundation and State Bar Association, reviews what payment
assurance exists when a grain elevator fails, focusing on
protection afforded to farmers and their lenders.
article may be of special interest to farmers in light of the
failure of several Illinois elevators during the past year,"
said Donald L. Uchtmann, a professor emeritus in the Department
of Agricultural and Consumer Economics, who co-authored the
report with colleague A. Bryan Endres.
In the article, Uchtmann and Endres review a number of the
Illinois Grain Insurance Fund's provisions and conclude by
recommending a list of good practices.
"Do not store grain worth more than $1 million at any one
warehouse licensed by the Illinois Department of Agriculture, as
the maximum recovery is $1 million per claimant," the authors
noted. "To assure 100 percent coverage for up to $1 million in
sales of grain to a grain dealer, always insist on being paid
within 21 days of delivering and pricing the grain for sale."
To ensure at least 85 percent coverage on grain delivered for
sale, for which the price has been determined but payment has
been delayed more than 21 days, farmers should never let more
than 160 days pass before being paid in full and never let the
amount owed by any one license for such delayed payment sales
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The authors recommend that to assure at least 85 percent coverage on
"price-later" grain sales, a farmer should always be paid within 160
days of the later of delivering or pricing the grain and within 365
days of the later of delivering the grain or entering into the
"Never let the unpaid value of such price-later sales to any one
licensee exceed $250,000," they write. "Also, understand the risks
and benefits associated with 'farmer marketing programs' or other
'higher risk' services offered by licensees."
To farmers who deliver grain to a grain elevator, the Illinois
Grain Insurance Fund is analogous to the Federal Deposit Insurance
Corp., which insures the deposits of those who keep money in the
"Farmers can take comfort in the fact that elevator failure is
unlikely, given stringent regulatory requirements of the Illinois
Grain Code, and, if a licensed elevator should fail, farmers have
the protections of the Illinois Grain Insurance Fund," said Uchtmann.
[Text from file received from