USA- The Iowa Grain Indemnity Fund Board rejected nearly US$1.5 million worth of claims from people who sold grain to Global Processing- a now-defunct soybean dealer that filed bankruptcy in October 2022.
The indemnity fund was created amid the 1980s farm crisis and seeks to protect farmers from grain dealer and warehouse bankruptcies.
The fund has dwindling reserves and is the subject of proposed legislation that might overhaul its funding mechanisms and a tax on farmers’ grain will reactivate in July to replenish the fund.
The board approved 35 claims of about US$2.1 million out of 46 claims that totaled US$3.6 million.
The main reason for the rejections was that several soybean producers made claims on grain sales that happened more than six months before the state suspended Global Processing’s grain dealer and warehouse licenses in October.
By law, to be eligible, those deliveries needed to happen on or after April 24, 2022.
Some of the affected suppliers beseeched with lawmakers to loosen the time restrictions to allow for older payments.
Additionally, the fund rejected some claims wholly or partly because soybeans were delivered to Minnesota, which lacks the protections that Iowa has for dealer and warehouse failures.
In October, Global Processing filed for bankruptcy, saying it owed 100 to 199 creditors US$10 to US$50 million.
The Iowa Department of Agriculture suspended the company’s warehouse and grain dealer licenses citing insufficient funds to cover producer grain checks and file monthly financial statements as Iowa law requires.
At the time of the filing, the state agriculture department was unsure how many farmers were caught up in the company’s financial troubles but urged farmers to file claims through the state’s grain indemnity fund.
According to Iowa Department of Agriculture and Land Stewardship data, the dollar amount for the rejected Global claims is the highest ever for any single bankruptcy in Iowa. The next highest was about US$975,000 for Aplington Elevator Co. in 1991.
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