The House Agriculture Committee passed House Study Bill 131 (Grain Indemnity Bill) by a bipartisan vote of 21-1. HSB 131 makes several modernizing changes to the state grain indemnity program which is now nearing four-decades old.

Since the 1980s, when this program was created, Iowa production of grain has nearly doubled as have grain prices. Additionally, the rise of special grain sales such as for organic grain has created unforeseen risks in the program which in part precipitated the reinstatement of indemnity fees in 2023 when the Indemnity fund was drawn down by the bankruptcy of several specialty grain purchasers.

Additionally, new ways of selling grain have proliferated with some having significant risks.

HSB 131 proposes new definitions and regulations surrounding credit-sale contracts. Specifically extending grain indemnity coverage to deferred pricing credit sales contracts, but not to deferred payment sales contracts. The difference between these two contracts is that in a deferred pricing contract the farmer and the elevator have not established the final price, so the contract is not final. In a deferred payment contract the price and the sale of grain has occurred and the farmer does not want to receive payment until a later date.

Almost always this contract occurs because the farmer wants to take the income from this sale into the next year. The bill modifies the conditions under which indemnity fund fees are assessed and outlines the process for indemnification claims. The changes aim to enhance the financial security of grain depositors and sellers while clarifying the responsibilities of licensed grain dealers.

HSB 131 was amended in committee to further clarify which credit-sale contracts will be covered under this legislation with deferred pricing being covered and deferred payment not. Farmers will still be asked 1/4 cent per bushel on the sale of all grain until the fund reaches $16 million. This bill is a compromise of all the stake holders involved. As in most legislation everyone gets some of what they want but not everything they want. Those of us involved in working on this bill believe that adding in deferred payment contracts puts great risk on the fund, which will cause the fund to be depleted and cause the fund to take longer to fill, which will force farmers to pay the 1/4 cent for a longer period of time.

Key aspects of HSB 131 as passed by the committee include:

• Defines ‘deferred-payment contract’; and defines ‘deferred-pricing contract’ under credit-sale contracts and clarifies participation and per-bushel fee payment timelines.

• Establishes that the per-bushel indemnity fees will only be assessed on grain sold under credit sale contracts deferred-pricing contracts, but not deferred-payment contracts.

• Strikes provision of current law that allowed the use of grain indemnity fund monies to fund Iowa Department of Agriculture and Land Stewardship administration of grain indemnity program and regulation of grain dealers.

• Increases the thresholds for waiving and reinstating indemnity fees from $8 million to $16 million and from $3 million to $8 million, respectively.

• Clarifies the process for indemnification claims, prioritizing depositors and sellers while specifying differing payout limits based on the type of contract.

• Cash sale and depositor covered grain getting 90 percent of price for losses amounting up to $300,000,

• Deferred pricing covered grain getting 70 percent of price up to $210,000.

Should community colleges offer 4-year degree programs?

The Higher Education Committee held a hearing earlier this year with representatives from Iowa’s community college system to explore the idea of the community colleges offering four-year degrees.

The committee asked the colleges to conduct an initial feasibility study of this idea and deliver a report no later than May 31. At minimum, the study should:

• Identification of unmet work needs and academic disciplines where baccalaureate programs at community colleges could address gaps.

• Analysis of existing capacity and resources at Iowa’s community colleges to support baccalaureate programs including faculty, facilities, and accreditation readiness.

• Exploration of funding models to support baccalaureate programs, including state appropriations, tuition, and other sources.

• Review of best practices and outcomes from other states to allow community colleges to confer baccalaureate degrees.

• Assessment of potential impact on underserved student populations, including rural and place bound students.

• Evaluation of potential tuition costs, financial aid availability, and affordability for students.

• Consideration of workforce outcomes, such as job placement rates, employer satisfaction, and regional economic impact.

Please let me know what you think about this.

State Rep. Mike Sexton, R-Rockwell City, represents Calhoun, Pocahontas and Sac counties plus western Webster County.