DES MOINES — The reinstatement of fees 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) started Sept. 1.
“Existing Iowa law now requires the fund to be replenished for the first time since 1989. We will continue to work diligently to ensure the financial soundness of the grain industry so that we can prevent failures and protect farmers’ investments,” Iowa Secretary of Agriculture Mike Naig said in a news release.
In the case of a failure of a state-licensed grain warehouse or grain dealer, the fund will pay farmers 90% of a loss on grain up to a maximum of $300,000 per claimant.
Because of claims made to the Grain Indemnity Fund following the failures of Pipeline Foods, LLC of Fridley, Minnesota, Global Processing, Inc. of Kanawha and B&B Farm Store of Jesup within the last two years, the balance of the fund, after all approved claims have been paid, is expected to be approximately $384,000. Current law requires that if the fund falls below $3 million, the Grain Indemnity Fund Board must reinstate participation fees for grain dealers and warehouses as well as a quarter-cent per bushel assessment that can be passed on to producers beginning on Sept. 1.
As outlined in Iowa Code 203D, the assessment must remain in effect for at least one full year. Current law also requires these fees — which only apply to cash sales and not grain sold on credit sale contracts — to remain active until the board votes to suspend the collection of fees or the fund reaches a balance of $8 million.