Lawmakers might increase size of emergency fund for farmers

The amount of money held in a state fund that is meant to protect farmers who aren’t paid for their grain would double in size with a bill that received preliminary approval in the Iowa House on Thursday.

The state’s Grain Indemnity Fund was almost completely depleted last year after its balance dwindled for more than a decade and three grain dealers with outstanding debts to farmers went bankrupt in 2021 and 2022.

By current law, the fund should operate with a balance of between $3 million and $8 million. Because it dipped below that lower threshold, a long-dormant fee on grain sales — a quarter-cent per bushel that is generally paid by farmers — was reinstated last year.

House Study Bill 572, which was advanced by a House subcommittee Thursday, would aim to keep the fund balance between $8 million and $16 million.

The fund was established about four decades ago, and lawmakers have not adjusted those fund balance requirements. Indiana, for example, keeps between $20 million and $25 million in its fund.

Not included in the proposal is an increase in the potential payouts to farmers, who are eligible for up to $300,000 per grain sale. State lawmakers doubled that total payout amount in 2009. Last year, an Iowa Senate bill that was not ultimately adopted would have increased the maximum payout to $600,000.

Kevin Kuhle, of the Iowa Farm Bureau Federation, said his group’s members support increasing the size of the fund and the maximum payments, along with extending the protections to credit-sale contracts — when dealers delay their payments for grain purchases.

A House subcommittee unanimously recommended the bill for further consideration.

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