Ceiling of Iowa capitol with painting

(Photo: Iowa Soybean Association / Joseph Hopper)

Key policies impacting soybean farmers

October 26, 2023 | Jeff Hutton

What happens in Des Moines and Washington, D.C., has a direct impact on the livelihoods of Iowa’s soybean farmers.

That’s why the Iowa Soybean Association (ISA) and its farmer-members are working proactively to ensure farmer fortunes aren’t left to legislators alone to determine what’s best for those out in the field.

State issues

ISA Senior Director of Public Affairs Michael Dolch says ISA is focused on a number of issues for the remainder of 2023 and throughout 2024, specifically at the Iowa Statehouse.

“Much of what we’re looking at is carryover from this past year,” he says.

In terms of Iowa’s Grain Indemnity Fund, Dolch says ISA is pushing legislators to look at revamping and updating the fund to ensure its success in the future.

“After a few grain warehouses revocations these past three or four years, we’re working with IDALS (Iowa Department of Agriculture and Land Stewardship) on the changes needed to have Iowa’s Grain Indemnity Fund updated,” he says, noting that research into similar programs in surrounding states is under way.

The restoration of fees on grain sold to or deposited at Iowa’s licensed grain dealers and warehouses began on Sept. 1.

This past April, the board that oversees the state’s grain indemnity fund agreed to reinstate producer fees after the fund balance dropped below the statutory $3 million floor as outlined in Iowa code.

The fund, established in 1986, was designed to offer some protection coverage for farmers who have stored grain in a warehouse licensed by IDALS and those farmers who sell grain to a licensed dealer.Sr. Director of Public Affairs

Those who have grain stored in an IDALS-licensed warehouse and those who sell grain to a licensed dealer are covered by the fund. In a loss situation, the fund pays the claimant for 90% of the claimant’s loss up to a maximum of $300,000.

Over the history of the fund, more than $19 million in claims have been approved to more than 1,500 grain producers, according to IDALS. The fund has generated approximately $9 million in assessed fees, which were last collected in 1989. Interest income, combined with the fund’s ability to recover losses from defunct grain dealers and warehouses, has provided additional revenue.

However, recent claims made to the fund following the failures of three dealers/warehouses over the past two years meant the fund has dropped below $3 million.

Current law requires that if the fund falls below $3 million, the Grain Indemnity Fund Board must reinstate participation fees for grain dealers and warehouses as well as a ¼-cent per bushel assessment that can be passed on to producers. The assessment will remain in effect for at least one full year. These fees – which only apply to cash sales and not grain sold on credit sale contracts – remain active until the fund reaches a ceiling of $8 million.

But there has not been a lot of education around the fund’s existence since it was created, much less about its coverage and potential participation fees, Dolch says.

ISA President-elect and District 1 Director Brent Swart of Spencer says getting legislators to understand the value of the fund and its importance should be a top priority.

“We need to get that back on track and make it more modern for today,” he says.

Iowa Water & Land and Legacy (IWILL) funding of the Natural Resources and Outdoor Recreation Trust Fund also continues to be a focus, Dolch says.

The trust fund, created in 2010 as a constitutional amendment and supported by more than 60% of Iowans, has sat empty over the past 14 years.

To trigger IWILL, the measure would have eliminated the local-option sales tax and increased the state sales tax by one cent, reserving 3/8th of a cent for the trust fund.

Dolch says ISA continues to support the measure because it would be a permanent and protected funding source designed to support clean water, productive agricultural soils and protecting wildlife habitat.

He says in 2024, IWILL will increase conservation efforts and prove a good investment in water quality which benefits all of Iowa.

Dolch concedes that the measure has been untouched by legislators all these years and will be a tough sell again because there has been a push to save taxpayers from that kind of spending.

Meanwhile, Dolch says there will be a push by Iowa Gov. Kim Reynolds to address property tax reform and “help drive down property taxes for Iowans. Under that specific ISA lens, that’s an opportunity to alleviate some of that tax burden for our farmers.”

Other state priorities include:

  • Educating policymakers on the value of checkoff programs for Iowa farmers, which according to a recent study, returns just more than $12 for every farmer-invested dollar;
  • Seeking additional funding for biomass-based diesel fueling infrastructure to reduce the current project backlog; and
  • Monitoring and potentially engaging in legislative proposals dealing with foreign ownership of Iowa farmland.

Herbicides and Farm Bill

In Washington, Dolch says ISA is very concerned about an Environmental Protection Agency (EPA) proposal on herbicides that could be devastating to farmers.

In an attempt to bring the EPA’s pesticide program into compliance with the Endangered Species Act (ESA), the agency recently proposed a draft ESA herbicide strategy.

Dolch says the strategy is a set of restrictions on agricultural herbicide use for all new and re-registered herbicide registrations moving forward.

While this proposal would apply to most agricultural herbicide users in the lower 48 states, farmers across four pesticide-use limitation areas (PULA) face greater restrictions due to alleged risks to certain endangered species. The entire state of Iowa is located within PULA 4, meaning all farmers will likely be impacted and face heightened compliance burden and costs.

Dolch says proposed mitigation procedures would be costly and entirely unworkable for Iowa farmers.

Swart agrees.

“This is a critical issue,” he says. “We really need to protect our ability to use these herbicides. It’s an effective tool in our toolbox.”

Meanwhile, Dolch and the ISA are hoping to push forward on the 2023 Farm Bill, which has yet to take root.

The 2018 Farm Bill expired on Sept. 30; however, Congress has until Dec. 31 to either pass a new bill or extend the current legislation.

Dolch noted that for the farm commodity support programs that expire after the 2023 crop year, the consequences of expiration begin on Jan. 1, 2024, when inactive and outdated laws —commonly called “permanent law” — would be restored.

Permanent law would support a number of commodities like dairy and corn but would not support soybeans.

Dolch says this upcoming farm bill is projected to cost $1.51 trillion over 10 years. Roughly 81% is funding for nutrition (food stamps), and leaves less than 20% to supporting production agriculture directly.

Dolch says ISA is engaging members of the House and Senate Agriculture Committees on a host of issues aimed at supporting Iowa soybean farmers, including protecting crop insurance, increasing safety net programs reference prices, enhancing conservation programs, investing in ag research, and promoting more trade funding and opportunities.

“Whether it’s through the farm bill or a stand-alone appropriation, we must focus more on ag research,” Dolch says. “The U.S. is falling behind our competitors. We’ve always prided ourselves on innovation and cutting-edge technology. But there will come a day where some of our competitors will have just have much technology and innovation as we do.”

Dolch says ISA will also be monitoring any potential amendments from legislators that might impact checkoff programs.

He says they are continuing to educate lawmakers about the value of checkoff programs, which have a huge return on investment – an investment made by farmers.

“The good that it’s done for the biodiesel industries, soy-based products, research to increased production – it all can be attributed back to the checkoff,” Dolch says.

And as to trade policy, Dolch says ISA wants to push legislators to focus on agriculture. The Biden administration, as well as the former Trump administration, were more interested in manufacturing trade.

Dolch says while he’s not surprised by that focus, agriculture-oriented trade must be pursued to bring more opportunities for soybean producers in Iowa and across the United States.

Advocating from the farm

Swart, chairman of ISA’s public affairs committee, says addressing policy matters and the advocacy conducted by farmers is extremely important.

“As farmers we’re affected day-to-day at the statehouse and on the Hill,” he says. “We need to have a bigger voice as farmers. It becomes even more critical that we engage with our lawmakers, telling our story and educating them on the many issues we’re facing.”

Swart says while he and other ISA farmer-members are addressing legislators, there is a need for more engagement from the agriculture community.

“If we don’t use our voices and be active, someone else will,” he says.