Seed Permit Holder Bond

The Iowa Seed Permit Holder Bond amount is fixed at $25,000. The surety's aggregate liability under this bond does not exceed $25,000, regardless of how many contracts you have with growers. The bond is a continuing obligation that remains in effect until canceled by the surety with 60 days' certified mail notice to both the principal and IDALS, though liability continues for existing contracts.

If a seed permit holder fails to honor their contractual obligation to repurchase seed at the agreed-upon above-market price, the Iowa grower can file a claim against the Seed Permit Holder Bond. The surety will investigate the claim and, if valid, compensate the grower for their financial loss up to the $25,000 bond limit. The bond acts as a financial guarantee protecting growers from permit holders who breach their repurchase agreements.

You need the Iowa Seed Permit Holder Bond if you hold a seed permit in Iowa and enter into contracts with Iowa growers that meet all three conditions: (1) you contract to purchase agricultural seed from the grower, (2) you do not furnish seed stock to the grower at no cost, and (3) you agree to repurchase the produced seed at a price exceeding the current market price. This bond is required under Iowa Code § 199.16 and must be filed with IDALS before entering into such contracts.