Capital Clicks

Legislature votes to delay reinstated grain fee for farmers

By: - May 4, 2023 12:44 pm

Lawmakers voted this week to delay for two months a fee on grain sales that was reinstated to replenish the state's Grain Indemnity Fund. (Photo by Jared Strong/Iowa Capital Dispatch)

The reinstatement of a fee on grain sales to replenish the state’s Grain Indemnity Fund would be delayed by two months under legislation that was approved by the Iowa House and Senate this week.

The fund will be nearly depleted by pending payouts to farmers who suffered losses when a soybean dealer went bankrupt last year.

The fund was created nearly four decades ago in response to the 1980s farm crisis. It provides payments to farmers of up to $300,000 to compensate them when they are not paid by dealers who buy their grain or when they are unable to recover grain they stored at licensed warehouses.

Its balance has been diminishing for years and has fallen below a $3 million minimum threshold that triggers the mandatory reinstatement of a quarter-cent-per-bushel fee that is applied to initial sales of grain. That fee is typically paid by grain producers and hasn’t been collected since 1989. By law, it must be collected until the fund balance surpasses $8 million.

A board that oversees the fund recently voted to reinstate the fee July 1, as required by law. The newly approved legislation — which was unanimously adopted by the House and Senate — would delay the reinstatement to Sept. 1. It awaits a signature from Gov. Kim Reynolds.

The delay is meant to allow grain dealers more time to adjust their procedures to collect the fee. They will be required to make quarterly payments to the state.

State agricultural officials notified those dealers last fall about the likely reinstatement, and they are planning informational meetings to help aid the transition.

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Jared Strong
Jared Strong

Senior reporter Jared Strong has written about Iowans and the important issues that affect them for more than 15 years, previously for the Carroll Times Herald and the Des Moines Register.