The Grain Depositors and Sellers Indemnity Fund
The Grain Indemnity Fund was created by the Iowa Legislature in 1986 as a result of the Farm Crisis and exists to protect farmers from financial losses that are the result of an Iowa licensed grain warehouse or grain dealer failure. The Fund is financed by a per bushel assessment on purchased grain and fees paid by licensed grain dealers and grain warehouses. In accordance with Iowa law, these fees have not been collected since 1989.
The Fund serves as a low-cost insurance policy for Iowa farmers. On an initial investment of $9 million from farmers, in addition to interest income and the recovery of losses from defunct dealers and warehouses, more than $19 million in claims have been approved for payout to Iowa farmers over the last three decades.
Recently, the balance of the Fund has fallen below $3 million which automatically reinstates the assessment and fees in accordance with Iowa law. The per bushel assessment will begin on September 1.
How much does it cost?
A ¼ cent per bushel fee is assessed on all cash grain transactions beginning September 1, 2023.
The fee is paid by the grain dealer, however, they may pass the cost of the fee on to the seller of grain and are required to itemize the deduction on the seller’s settlement sheet.
Based on today’s average corn yields, a farmer can expect to pay approximately 50 cents per acre of corn, which protects approximately $1,200 in grain marketed.
How much coverage do I get?
In the event of a grain dealer or grain warehouse failure, impacted producers are eligible to receive 90% of losses up to a maximum of $300,000 per claimant.
Only cash transactions are eligible for coverage. Credit sale contracts are not covered by the Fund. Examples of credit sale contracts that do not have coverage include but are not limited to:
- Deferred Payment
- Price Later
- No Price Established
- Extended Price
- Minimum Price