AUSTIN, Texas – Farm Credit lending cooperatives throughout Texas have partnered to commit more than $32,000 to assist the state’s grain growers. The donation will help promote and conduct a referendum that, if approved, would establish an indemnity fund to help protect the state’s grain producers in the event of financial failure by an elevator or a storage facility.
The fund would be under the authority of the newly created Texas Grain Producer Indemnity Board. Mitchell Harris, chief executive officer of AgTexas Farm Credit Services, was among nine members appointed to the board in December 2011 by Texas Agriculture Commissioner Todd Staples. The board’s establishment is the result of a bill passed by the Texas Legislature and signed into law by the governor in 2011. The legislation was introduced after a series of financial failures at grain elevators in recent years resulted in millions of dollars in losses to Texas grain producers.
“The risk in the grain sector has increased materially the past seven years as the volatility in grain prices continues to bring stress on the elevator industry and the producers,” said Harris. “Farm Credit has a long-standing commitment to support agriculture and rural America, and we are pleased to help provide the opportunity for Texas grain growers to choose how they cost-effectively self-fund the management of this risk.”
The Farm Credit lenders provide financing for agriculture, agribusiness and rural real estate. They are part of the nationwide Farm Credit System, the oldest and largest source of rural financing in the United States.