By Andi Anderson
The state of Iowa has announced that the one-quarter-cent-per-bushel grain indemnity fee will remain in place for at least another year, extending through August 31, 2025.
This decision comes as the state aims to rebuild its Grain Indemnity Fund, which was significantly depleted following a series of grain warehouse failures in 2021 and 2022.
The Iowa Department of Agriculture and Land Stewardship reinstated the indemnity fees in 2023 after the fund balance fell below $3 million. This was the first time in over 30 years that such fees had been reintroduced.
The fees are required by law when the fund's balance drops too low and will continue until the fund reaches a target balance of $8 million or until the board votes to suspend the fees.
As of the start of the assessment in 2023, the fund's balance was only $311,929.98. The first three quarters of fee collection, which took place in December 2023, March 2024, and June 2024, increased the balance to $4.7 million.
However, based on estimates for the fourth quarter, the fund is not expected to reach $8 million, necessitating the continuation of the fees for a second full year.
The Grain Indemnity Fund was established by the Iowa Legislature in 1986 during the farm crisis to protect farmers from financial losses in the event of a grain warehouse or dealer failure.
The fund covers 90% of a farmer's losses, up to a maximum of $300,000 per claimant, for grain on deposit in licensed Iowa warehouses or sold on a cash basis to state-licensed grain dealers.
The fund paid out several claims in 2021 and 2022 after the failures of Pipeline Foods LLC, Global Processing Inc., and B&B Farm Store, which left many farmers with unpaid grain and significant financial losses.
Since its creation, the Iowa Grain Indemnity Fund has paid out more than $19 million in claims to over 1,600 grain producers, highlighting its importance in providing financial protection to the state’s farming community.
With the continued collection of fees, the state aims to restore the fund to its full capacity, ensuring it can support farmers in future crises.
Photo Credit: pexels-karolina-grabowska
Categories: Iowa, General