DES MOINES, Iowa – The Iowa Grain Indemnity Fund Board recently voted to end assessments and participation fees tied to the fund, starting Sept. 1, after the fund reached a balance of over $10.17 million, surpassing the required $8 million threshold.

“The Grain Indemnity Fund serves as a low-cost insurance policy for Iowa farmers,” said Iowa Agriculture Secretary Mike Naig. “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.”

Established in 1986 during the Farm Crisis, the fund provides financial protection to Iowa farmers in case of dealer or warehouse failure. It covers 90 percent of losses up to $300,000 for grain held in Iowa-licensed warehouses or sold on a cash basis to Iowa-licensed grain dealers.

The assessment was reinstated on Sept. 1, 2023, after the fund fell below the statutory threshold of $3 million due to grain facility (financial) failures in 2021 and 2022, the Iowa Department of Agriculture and Land Stewardship said. Under existing law, the assessment must remain in effect for at least a 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.

The department said second-year collections started on Sept. 1, 2024, and will continue through Aug. 31, 2025. The balance of the fund, as of April 16, was $10,173,347.80. This total exceeds the $8 million dollar threshold and does not include the final two quarters of collections, which will cover cash sales of grain made in March, April and May, and June, July and August.

The department’s Grain Warehouse Bureau regulates and examines the financial solvency of grain dealers and grain warehouse operators to protect Iowa farmers. Members of the fund are appointed by the Iowa governor and are subject to confirmation by the Iowa Senate, the department said.

Brent Johnson, Iowa Farm Bureau Federation president and Manson, Iowa, farmer, told Farm World, “Farm bureau members appreciate that the Grain Indemnity Fund provides protection for farmers from elevator (financial) failures, which are out of farmers’ control.

“Farm bureau members also appreciate the legislature modernizing the fund (updating it with modern technologies, processes, and practices to enhance its efficiency, performance, and overall value for investors or stakeholders) to increase the floor to $8 million and the ceiling to $16 million, along with expanding the fund to cover price-later contracts, which will enhance protections for farmers who are harmed by an elevator (financial) failure,” he added.

When asked how the fund has benefited Iowa farmers, and if it is saving them money, he said, “The Grain Indemnity Fund has benefited farmers by providing financial protection from elevator failures. With the passage of Senate File 608, farmers now have protection for price-later contracts, along with protection for cash sales.”

Senate File 608, a bill which passed April 7 in the Iowa legislature, will regulate the marketing of grain, specifically by updating the Iowa Grain Indemnity Fund, according to Iowa Capital Dispatch.

The bill increases the fund’s minimum to $5 million and maximum to $12 million, up from the current minimum of $3 million and maximum of $8 million. The bill also includes grain purchased under credit-sale contract, meaning grain bought on credit would also be eligible for indemnity protections.