Indiana General Assembly Seeks to Revise Law Protecting Farmers’ Grain Assets

After a grain elevator in northeast Indiana failed to maintain sufficient assets, farmers worried they would never receive payment for their grain and lose millions in the process. Last year, the Huntington County Circuit Court clarified that the purpose of the Indiana grain indemnity program is to protect farmers. With that order, our firm helped farmers secure reimbursement from the fund after being denied payment for grain they delivered to Salamonie Mills. Read the story of our legal victory for farmers in that case here.

In response to the events that allowed Salamonie Mills to accept grain despite its financial troubles, the General Assembly has introduced legislation to reform grain licensing and indemnity law in Indiana in the 2025 session.

Senator Leising introduced SB 461 and Representatives Baird and Prescott introduced a companion bill in the house as HB 1419. Both bills would reduce the discretion given to the Indiana Grain Buyers and Warehouse Licensing Agency (“Agency”) in reviewing the financial health of applicants and licensees.

The first major change would be to replace a licensee’s “failure” (previously left to the Agency to identify) with “revocation of a license.” As currently proposed, revocation of a license would take on the same definition as the law’s definition of failure, largely focusing on the licensee’s inability to pay claimants, license revocation, and insolvency.

The legislation also would remove the option for a licensee to be temporarily suspending from accepting grain, instead instituting intermediate steps the Agency can take before a licensee’s financial position deteriorates beyond repair. The Agency would still require a 1:1 current asset ratio and a minimum positive net worth based on the license type, but a licensee would now be required to maintain unencumbered assets valued at 85% (instead of 80%) of its unpaid grain payables.

For each metric, the Agency will take different intermediate steps depending on how far out of compliance the licensee may be. For example, a licensee with a current ratio less than 1 but greater than 85% of that requirement would receive a notice of deficiency from the Agency and 90 days to cure. If the licensee’s current ratio is below that 85% threshold or fails to cure within those 90 days, the Agency would hold a hearing and order the licensee to take certain actions within 15 months or revoke the license immediately. Similar processes are proposed for minimum positive net worth and unencumbered assets.

The bill also outlines clear administrative procedures for notice, hearings, fines, and license revocation.

Lastly, the bill introduces minimum storage charges to be used to determine storage losses. The proposed amounts are 5 cents per month per bushel for all grain except popcorn and popcorn seed (10 cents) and soybeans and soybean seed (15 cents). In the event of license revocation, stored grain would still be reimbursed from the indemnity fund at 100% and sold grain at 80%.

These proposals are likely to go through several revisions before a final version is voted on and sent to Governor Braun’s desk. However, these efforts indicate the General Assembly agrees with the Huntington County Circuit Court judge—the purpose of the indemnity fund is to protect farmers.

Full versions of the House and Senate bills are available here. This article was researched and written by JSAL law clerk Kaleigh Shaw.