The Iowa farm Bureau Federation, the country’s most financially rewarding farm bureau, impacts most aspects of farming policy in the state. One lucrative loan underscores how big and facility the organization has actually become.

By sky Chadde and also Eli Hoff, inspection Midwest; mark Ossolinski, Watchdog Writers team | October 7, 2021

This story is a collaboration between Investigate Midwest and Watchdog authors Group.

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In May, an elderly executives at the Iowa farm Bureau Federation finalized a little-noticed gaue won maneuver the could boost their revenue for years to come. While a nonprofit, the farm Bureau own a very profitable, publicly traded insurance business, FBL gaue won Group. For practically a year, the executives — whose incomes depended upon FBL — had actually wanted to privatize the company.

But the move spurred numerous lawsuits, through a significant investor publicly accusing the farm yard Bureau of low-balling the continuing to be shareholders it to be attempting come buy out. To settle, the farm Bureau paid investors more, and the transaction closed this spring.

If history is any indication, the move was a clever one, at least for farm yard Bureau leaders. A review of public filings, depositions and also internal memos display Farm bureau leaders have benefitted for years native the nonprofit’s bulk ownership the the insurance money company. The story of FBL likewise highlights the complex nature of the modern Iowa farm Bureau, and the potential disputes of attention at the heart of the nonprofit company that sits atop lot of for-profit companies.


The political tasks of farm bureaus at the state and federal level room well-documented. Yet the scope of the Iowa farm Bureau’s sprawling gaue won operations is much less understood. Through expanded investments, it has reaped huge profits. End the past decade, its full revenue has actually increased about 200%. And, lately, about 80% that it comes from investments, according to taxation documents. No various other farm bureau even approaches the ratio.

The Iowa farm Bureau freshly reported full revenue of about $100 million, the many of any type of farm bureau by far and almost three times the of the prominent national umbrella group, the American farm yard Bureau Federation. This day its invest portfolio is worth an ext than a exchange rate dollars. Executive compensation is in the high six figures.

The farm yard Bureau has actually reaped this gains while many farmers have actually suffered v expensive seed and also fertilizer prices yet low revenue prices for your products. The bureau’s stated mission is to carry out a “vibrant future” to farm families, however it has actually been criticized because that piling increase cash if Iowa farmer struggle. In current years, Iowa farmers have suffered with low-to-negative profit margins, follow to Iowa State University research reviewing 1999 come 2015. And, in the 2010s, Iowa continued its tendency of losing ranches as operator revenue dropped 21%, follow to U.S. Department of agriculture data.

“By every metric, they’ve failed your membership,” said Austin Frerick, a aboriginal Iowan who has studied the farm yard Bureau and also been a vocal critic. In the 2018 congressional midterms, he ran together a Democratic. “The economic instance is obtaining worse because that farmers in Iowa, and (it) keeps obtaining bigger, and also that’s the crux. They room not what your mission states. They space actually working versus it.”

FBL, the insurance allowance company, is the engine behind lot of the farm yard Bureau’s profits. It likewise illustrates the innate tension within the farm Bureau’s for-profit and nonprofit entities. A formerly unreported loan to FBL, expanded in 2008, drives to the heart of these tensions.

In 2008, the Iowa farm yard Bureau feared the FBL to be poised to fail. The fall, the insurer’s stock to be cratering in the middle of the global financial crisis. This posed a an individual problem for senior Farm office executives — they were compensated by the insurance allowance business. They took action. As the stock price fell, follow to court records, the farm yard Bureau borrow its struggling subsidiary $25 million.

Transactions in between related reality within together an organization are often scrutinized since of your potential because that malfeasance. They are not problematic in and also of themselves, yet it is vital that organizations impose strict controls, together as dispute of attention policies and the public reporting of insider transactions. This helps ensure the nonprofit leader don’t usage supposedly independent entities to enrich themselves or execute sweetheart deals favor loans with below-market interest rates.

The 2008 loan farm yard Bureau prolonged to FBL might raise red flags amongst regulators if it wasn’t properly controlled or reported. Several specialists said the loan to be questionable because the farm Bureau and FBL re-superstructure executives and also the loan was no reported in financial filings. (Now the FBL is private, it’s not subject to the same reporting requirements enforced on publicly traded businesses.)

When asked around the loan, Iowa farm Bureau spokesman Andrew Wheeler claimed the office “has never straight participated in a loan to FBL gaue won Group, Inc. Any information to the contrary would be not correct or the end of context.” Wheeler did not return many requests for clarification over the previous three months.

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The farm yard Bureau additionally did no respond come a perform of in-depth questions around the loan or components of this story, such together criticism about the disparity between its finances and also those of many Iowa farmers. In its taxes documents, the farm Bureau claimed it does no make its conflict of attention policies easily accessible publicly. A committee evaluate potential disputes of interest each year and makes judgments, follow to its taxes forms.

Contribute to our reporting. Carry out you have information on just how the Iowa farm yard Bureau, or an additional farm bureau, handle its financial affairs? wednesday love to hear from you. Email sky.chadde