Modernized Grain Indemnity Fund signed into law

May 29, 2025 | Bethany Baratta

Earlier this week, Iowa soybean farmers witnessed the culmination of efforts to modernize the Iowa Grain Depositors and Sellers Indemnity Fund, ensuring farmers are paid for their grain in the event of a co-op or grain elevator failure.

Iowa Governor Kim Reynolds signed the Grain Indemnity Fund bill into law. The Fund provides safety net revisions to repay farmers in the event of grain elevator or co-op failure.

The modernized fund will now offer a 75% payout on credit sale contracts, excluding deferred payment contracts. It also increases the total individual payment cap from $300,000 to $400,000 (with a maximum claim of $300,000 for credit sale contract losses). Previously, the fund covered only cash sales at 90% of contracted value.

Iowa Soybean Association (ISA) Advocacy Manager Megan Decker says there was strong consensus among farmers to modernize the fund and extend the coverage.

“Modernizing the Grain Indemnity Fund ensures that a safety net remains adequate in the event of a grain elevator failure,” she says. “ISA supported modernizing the fund and extending coverage to credit sale contracts and believes excluding deferred payment credit sale contracts was the right approach—expanding coverage while thoughtfully maintaining the fund’s sustainability.”

The fund originated in the 1980s as a result of the farm crisis. With modernized language, the fund’s minimum is now $8 million. If the fund dips below that threshold, a ¼-cent per bushel assessment is triggered until the fund reaches $16 million, the new maximum.  This change reflects the increased volume and value of Iowa grain since the fund’s inception. In recent years, various elevator failures have demonstrated a need to modernize the fund.

After the initial bill failed to pass in 2024, farmer leaders on ISA’s Advocacy committee examined the approach for the 2025 legislative session.

“ISA's Advocacy Committee took a comprehensive look at how to modernize the fund and expand coverage while not ballooning liability,” Decker says. “The committee also considered the coverage of specialty crops and niche markets. Because specialty crops are assessed at the same rate as commodity crops, they should be paid out at respective commodity prices and not a premium.”

ISA led on this legislation, bringing forward a comprehensive update to the fund.

Story written by Bethany Baratta.

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