The U.S Department of Agriculture (USDA) has given eGrain, Inc. approval to continue the trial system that allows grain and oilseed elevator operators to issue electronic warehouse receipts (EWRs) for corn, soybeans and wheat pledged by producers as collateral for 2011 crop year marketing assistance loans (MALs). eGrain, Inc. and the USDA have expanded the trial system for the 2011 crop year to include a total of 36 states. Grain and oilseed elevator operators from the following states that issue warehouse receipts to producers for MALs can participate in the trial system:
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- South Carolina
- South Dakota
EWRs can be issued and transferred electronically in a matter of minutes, eliminating the cost and inconvenience of physically transporting paper warehouse receipts, while still maintaining the same legal value.
The EWR trial system began with the 2010 crop year after eGrain, Inc. developed a web-based interface for USDA Farm Service Agency (FSA) county and state offices to utilize for holding EWRs as collateral for producers. The web-based system allows FSA offices to securely hold the EWRs and instantly transfer them back after the loans are redeemed.
"We are happy to see the USDA allow widespread use of EWRs for MALs so that grain elevators can utilize EWRs for all of their business needs," said Drew Earles, vice president, eGrain, Inc. "Due to current commodity prices, the total number of MALs is greatly reduced from previous years." The trial system experienced limited use in only eight states during its first year (2010 crop year). Despite limited use, the trial system operated smoothly and efficiently for all participants. The eGrain System received numerous positive comments from all trial system participants and the industry is excited to see the expansion for the 2011 crop year.
eGrain, Inc. will conduct training for FSA offices later this week and then grain and oilseed elevators can begin utilizing EWRs for MALs within these 36 states.
Grain and oilseed elevators, producers, lending institutions and other entities interested in additional information or in participating in the trial system should contact eGrain, Inc.