The assessment on grain sold to or deposited at Iowa-licensed grain dealers and warehouses as part of the Iowa Grain Depositors and Sellers Indemnity Fund (Grain Indemnity Fund) will continue for an additional year. Barring any further claims made against the fund, the assessment is anticipated to cease on August 31, 2025, in accordance with Iowa law.
Due to claims made against the Fund following grain facility failures in 2021 and 2022, the balance of the Fund fell below the statutory threshold of $3 million. By law, this required the Grain Indemnity Fund Board to reinstate the participation fees for grain dealers and warehouses as well as a ¼ cent per bushel assessment. The assessment was reinstated on September 1, 2023. Under existing law, the assessment must remain in effect for at least one full year and must also remain active until the Board votes to suspend the collection of fees or the Fund reaches a balance of $8 million.
Prior to the start of the assessment, the balance of the Fund was $311,929.98. Assessment collection during the first three quarters, which occurred in December 2023, March of 2024 and June of 2024, has produced a balance now of $4,731,299.22. The final quarter of assessment for this current year will be collected in September of 2024. Based upon fourth quarter collection estimates, the fund balance is not expected to exceed $8 million at that time. Therefore, under law, the assessment must continue, and the Grain Indemnity Fund Board has authorized a second full year of assessment, which will now run through August 31, 2025.
Created by the Iowa Legislature in 1986 during the Farm Crisis to provide financial protection to farmers, the Grain Indemnity Fund covers farmers with grain on deposit in Iowa-licensed warehouses and grain sold on a cash basis to state-licensed grain dealers. In the case of a failure of a state-licensed grain warehouse or grain dealer, the Fund will pay farmers 90 percent of a loss on grain up to a maximum of $300,000 per claimant. Over the history of the Grain Indemnity Fund, more than $19 million in claims have been paid to more than 1,600 grain producers. The Fund has generated approximately $9 million in assessed fees, which were last collected in 1989. Since that time, the Fund was able to recover claim losses from defunct grain dealers and warehouses that when combined with interest earned on the Fund, provided enough additional revenue to prevent the reinstatement of the assessed fees.
The Iowa Department of Agriculture and Land Stewardship’s Grain Warehouse Bureau regulates and examines the financial solvency of grain dealers and grain warehouse operators to protect Iowa farmers. The Grain Warehouse Bureau is responsible for administering the Iowa Grain Depositors and Sellers Indemnity Fund. Members of the Iowa Grain Depositors and Sellers Indemnity Fund are appointed by the Governor and are subject to confirmation by the Iowa Senate. More information can be found on the Iowa Department of Agriculture and Land Stewardship’s website.
Source : iowaagriculture.gov