The Iowa Grain Indemnity Fund Board has taken a significant step to protect farmers in the state by reinstating participation fees for grain dealers and warehouses. The board voted unanimously to collect quarter-cent-per-bushel fee for initial sales, typically paid by farmers, and other fees to generate approximately $6 million annually. The fees, which were last collected in 1989, are expected to help replenish the Grain Indemnity Fund that pays farmers 90% of their losses in amounts up to $300,000.
The Grain Indemnity Fund was established in the aftermath of the 1980s farm crisis and has paid out around $16 million to farmers to cover their losses when grain dealers fail to pay for crops they purchased or if farmers cannot withdraw their grain from warehouses. The recent vote by the Iowa Grain Indemnity Fund Board has been viewed as a positive step for farmers in the state to ensure their protection in case of dealer or warehouse failures.
However, there are still debates and discussions around the best ways to safeguard farmers and ensure the long-term viability of the agricultural industry. One bill that passed the Iowa House proposes to delay the fee collection until September to give grain purchasers time to prepare. Another bill to eliminate the fees and replenish the indemnity fund with existing fees on corn sales has stalled in the Iowa Senate. The establishment of indemnity funds or insurance in the form of bonds is seen as another way to protect farmers from dealer and warehouse failures in Midwestern states.
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Categories: Iowa, Business