Grain Indemnity Fund Coverage in the State of Iowa
Coverage: Persons who have grain stored in a warehouse licensed by IDALS and persons who sell grain to a grain dealer licensed by IDALS. In a loss situation, the indemnity fund pays the claimant for 90% of the claimant’s loss up to a maximum of $300,000 per claimant.
For stored grain there is no distinction made between grain on warehouse receipts and grain in “open storage” or “unsettled”. Grain that is priced at the time of delivery is not stored, it is sold and the coverage is provided as such. Unpriced grain on a credit-sale contract is not stored, it is sold and no coverage is provided.
Exceptions on sold grain: Coverage on grain sold to a grain dealer is limited to sales that took place within six months of the incurrence date (explained below). No coverage is provided on grain sold to a grain dealer on a credit-sale contract. No coverage is provided on grain sold by one grain dealer to another.
For sold grain, the coverage is typically on priced grain delivered to a dealer that has not yet been paid for within the legal 30 day limit and on grain checks that have been returned NSF from the grain dealer’s bank and that are not more than six months old.
Exception on stored grain: No coverage is provided to grain stored in a warehouse licensed by USDA. These warehouse operators are bonded as required by the terms of their federal warehouse operator licenses. Contact USDA at 816-926-6474 for information on federal licenses.
Incurrence date and claim valuation: A claim may not be made prior to an incurrence date. An incurrence is the revocation, termination or cancellation of a warehouse operator or grain dealer license issued by IDALS or the filing of a bankruptcy petition by the license holder. Stored grain covered by the indemnity fund is valued out at current market prices at the date of incurrence. Sold grain covered by the indemnity fund is valued at the contract price.
IDALS Receiverships: When a warehouse operator licensed by IDALS fails, IDALS typically steps in as a limited receiver for the grain. The grain is sold and the funds maintained in a receivership account during a 120 day filing period, during which depositors may file claims jointly with the receivership and the Indemnity Fund (see “Claim forms” section below). Values are established for the grain in storage based on current market prices. Following the 120 day claim period, the grain proceeds are distributed to the depositors1. Based on the joint filing with the receivership and the 90% coverage from the Indemnity Fund this typically yields an overall recovery of more than 90% of the value of grain in storage.
No coverage on contracts for future delivery: There is no coverage for price differentials between current market price and contracts for future delivery of grain. Receivership and indemnity coverage is provided only for delivered grain.
Claim forms: Claim forms are available from the department by calling 515-281-5324 or online. In situations where there is a receivership by IDALS for the grain in storage, the Indemnity Fund claim form acts as a dual claim with both the Indemnity Fund and the Receivership. There are payment options shown on the Indemnity Fund claim form which are explained with the instructions included with the claim form.
- Includes lenders who are holding properly negotiated collateral warehouse receipts issued by an IDALS licensed warehouse operator.
- IDALS means the Iowa Department of Agriculture and Land Stewardship
- Seller" means a person who sells grain which the person has produced or caused to be produced to a licensed grain dealer, but excludes a person who executes a credit sale contract as a seller. However, "seller" does not include a person licensed as a grain dealer in any jurisdiction who sells grain to a licensed grain dealer.
- Credit-sale contracts include, but are not limited to deferred payment, deferred pricing, basis, and minimum price type contracts. Check the top of the contract for the words “Credit-Sale Contract” and check above the signature line for notice of no indemnity fund coverage.
Grain Warehouse Bureau
Iowa Department of Agriculture & Land Stewardship
Henry A. Wallace Building
Des Moines, IA 50319-0053