For many years, the Legislature has bent over backward to help the ethanol industry.

Since 1990, the industry has benefited by $272 million worth of tax credits funded by taxpayers and checkoff fees from farmers.

Too bad that state senators were not as solicitous toward the people who do business with ethanol companies.

Farmers in Nebraska recently found out that the contracts they signed to deliver corn at a set price are void if the company declares bankruptcy.

The farmers have no recourse.

The Legislature should correct the omission.

In contrast to Nebraska, farmers in other ethanol-producing states often have protection in the form of bonds, an indemnity fund or a combination of both.

Iowa, for example, has a grain indemnity fund of $8.2 million that plays claimants for 90 percent of their loss up to a maximum of $90,000. Indiana has a bond system coupled with a voluntary indemnity fund that pays 80 percent of a contract.

Those states, in fact, believe after the experience of the past few months that their protections are inadequate and are talking about upgrades. Some have suggested that Iowa should boost the size of its indemnity fund to $12 million. In South Dakota, which just started requiring bonds last year, some are suggesting that the bond requirement be increased to $1 million.

Motivating discussion of stronger protection is the realization that ethanol plants have become a major force in agriculture.

Nebraska ranks second in the nation in ethanol production with production capacity of more than 1 billion gallons annually. The state’s more than 20 plants use about a half billion bushels of corn a year. A few of Nebraska’s plants were built by farmer-investor groups. Today, most of the state’s plants are operated by corporations.

As Chris Klenklen, a Missouri regulator, told the Journal Star’s Art Hovey: “We’re not used to these guys being this big, buying this much grain and having a business model put in such a position that it’s causing them concern.”

In Nebraska, Jerry Vap of McCook, a member of the Public Service Commission, is touting creation of an indemnity fund over bond requirements, pointing out that “a $300,000 bond is not going to cover even one day’s processing.”

While consensus on the right approach may not yet have emerged, there should be agreement on the goal.

The need is obvious for at least minimal protection for farmers and others who sustain losses when an ethanol plant can’t pay its bills.

State senators have given ethanol plants plenty of breaks over the years. Now they need to cut a break for the people who depend on the plants to live up to their business obligations.