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Indemnity Account Collection
Grain Premium Collection Not Required Currently
Collection of premiums on grain sales is not currently required. The Minnesota Department of Agriculture (MDA) will announce the need for grain indemnity premiums when the fund balance dips below $8 million.
Premiums During Collection Periods
During collection periods, grain producers must be charged a grain indemnity premium on all grain sold to a grain buyer in Minnesota. This fee will not exceed 0.2 percent of the price and will be set by the MDA before each collection period.
Grain Buyer Responsibilities
When a producer sells grain to a grain buyer in Minnesota during a collection period, the grain buyer must deduct the grain indemnity premium from the proceeds of the sale and pay it to the MDA on behalf of the producer. The indemnity premium should be the last deduction taken. The grain buyer must notify the producer of the deduction in writing, such as on the settlement sheet.
Recordkeeping Requirements
Grain buyers must clearly indicate the grain indemnity premiums in their books and records, retain them for at least three years, and make them available for inspection. Retention schedules may vary for other agencies.
Premium Submission Deadlines
The grain indemnity premium must be forwarded to the MDA for deposit into the grain indemnity account on behalf of the producer. Premiums must be submitted by the following deadlines:
- January 31 for premiums collected during July, August, September, October, November, and December.
- July 31 for premiums collected during January, February, March, April, May, and June.
Collection Periods and Account Balances
Collection of premiums does not begin until the indemnity account is determined to be at or below $8 million. Once collection starts, premiums must be collected until the grain indemnity account contains more than $15 million as of June 30 of any given year. If the account contains at least $8 million, the MDA may, after holding a public meeting, suspend premium payments for all producers in the event of economic hardship.
Public Notification
The MDA will announce the intention to collect premiums by May 1 each year, with collection to begin July 1. The MDA must notify the public of its intent to reinstate premium collection through publication in the State Register and by notifying each licensee of their obligation to collect premiums.
