Murphy’s Law #51 Last of the Year

December 14, 2019

December 12th saw the latest Agriculture and Transportation Interim Legislative Committee meeting. The needle did not move on the issue of using the Sec. of State’s Central Indexing system to show any other loans procured by a producer after getting the primary or original loan to put their crop in. Nor did much happen on the Road Train study although there was testimony from the DOT and the Highway Patrol. There was some confusion between the lawmakers and the agencies as to which party was to figure out a cost estimate. DOT, for instance, explained that they had not done much on the road train monetary figures because they understood that the interstates (Federal road system) would be used and doing so would necessitate a change in USA law. This interim may not see a lot of progress on this decidedly complex transportation issue.
The topic with large numbers of moving parts that is getting a lot of traction in a hurry is the grain inspection program. The North Dakota Commissioner of Agriculture took us through some new ideas that he and his department have been fashioning in addition to the several actions he had proposed in the first meeting. (For a summary of the first Ag and Trans meeting, see blog #47) The indemnity fund, currently capped at $6 million for those with credit sale contracts who have suffered losses due to insolvency, has been a hot topic in past legislatures. A banking attorney offered her views, including that since 2003 when the fund was begun, inflation and the size of insolvencies has grown to a point that the fund needs “to be brought into this century”. Meaning, I took it, that it needed to be bigger. Including all producers in the fund, an idea that did not survive last session, also seemed to be attractive and could easily cover damages after a few years of collecting miniscule percentages from crop sales. Some asked if a private insurance policy could be offered instead and the committee was assured that no such instrument exists with the likelihood that one never will. She said that with margins about as tight as they can get for farmers, now would be a good time to rewrite the indemnity fund parameters. It is all about cash flow and protection for producers, bankers and the entire industry. February is planned for their 3rd of 5 total meetings before the next session.