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A state fund meant to protect farmers who haven’t been paid for their grain would double its holdings under a bill that received preliminary approval in the Iowa House of Representatives on Thursday.
The state’s grain compensation fund was nearly depleted last year after more than a decade of declining balances and bankruptcies in 2021 and 2022 of three grain distributors with unpaid debts to farmers.
According to current law, the fund should operate with a balance of $3 million to $8 million. The long-dormant grain sales fee, typically a quarter cent per bushel paid by farmers, was reinstated last year because it fell below that floor.
House Review Bill 572, introduced Thursday by a House subcommittee, aims to keep the fund balance between $8 million and $16 million.
The fund was established nearly 40 years ago, but lawmakers have not adjusted these fund balance requirements. For example, Indiana has her $20 million to her $25 million endowment.
The proposal does not include potential increases in payments to farmers who qualify for up to $300,000 per grain sale. The state Legislature doubled that total amount in 2009. An Iowa Senate bill last year that ultimately failed to pass would have increased the maximum payout to $600,000.
Kevin Kuehl of the Iowa Farmers Federation said his organization’s members would like to increase the fund size and payout limits, as well as expand protections for credit sales agreements if dealers delay payments on grain purchases. He said he supports it.
A House subcommittee unanimously recommended further consideration of the bill.
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