(Iowa Capital Dispatch) – Iowa Secretary of Agriculture Mike Naig said he plans to file the first Iowa Farm Act, to support farmers and rural communities in the state with tax relief, expanded economic opportunities and enhanced biosecurity.
Naig, in an interview Wednesday with Iowa Capital Dispatch, said the bill is like a federal farm bill in that it “comprehensively brings in multiple facets” of farm and rural policy into one bill.
“I think there’s value in having something that really cuts across and brings together the diverse, different interests of agriculture,” Naig said. “What that allows us to do, too, is to then have a platform, have a vehicle that we can talk to legislators about … a nice opportunity to create a focal point for ag and ag policy during a session.”
The bill includes provisions for expanded economic opportunities for farmers, tax relief for farm families, support for beginning farmers and ranchers and strengthened biosecurity procedures. Naig said the policies in the bill were derived from conversations with different groups across Iowa about their priorities.
Naig said while the Iowa Legislature moves a “tremendous amount” of ag-related policy each session, the bill comprises priorities from small groups like Iowa beekeepers and specialty crop farmers with the ag needs from livestock and row crop commodity groups.
Naig has been Iowa secretary of agriculture since 2018 and is seeking reelection in 2026.
Economic opportunities
According to a news release from the Iowa Department of Agriculture and Land Stewardship, the bill seeks to expand economic opportunities for farmers by modernizing zoning exemptions and agritourism definitions to better support on-farm operations. Specifically, the department notes activities like value-added processing and direct-to-consumer marketing should be acceptable exemptions. The news release also said Christmas tree farms should be “explicitly” included in agritourism liability protections.
The bill would make permanent the Choose Iowa School Purchasing Pilot Program. The pilot program helps schools to purchase locally grown and raised products, which in turn, helps farmers to have a consistent local buyer.
Specialty crop and small-sized farm operations advocated for the program to be permanently funded in the 2025 legislative session after the Trump administration ended a similar federal program.
The measure was proposed as an amendment to the state’s budget for agriculture and natural resources, but was not accepted. The pilot program awarded 33 schools a total of $70,000 in funding in May.
The farm act would prioritize young and beginning farmers in the state’s Choose Iowa grant programs, and “provide flexibility” to expand Choose Iowa marketing opportunities.
In addition to the Iowa Farm Act, IDALS said in a release it plans to ask for a 1.6% budget increase, about $1.3 million, to maintain “essential operations.”
Naig said the decision to pull some of these issues out of the budget proposal and into the Iowa Farm Act gives legislators some “optionality” and puts a “focus” on the different ag policy issues the department sees.
Tax provisions
The bill has several tax provisions, including one that expands farmer rental income tax exemptions for retired farmers to include “modern” business structures like S corporations, trusts and estates.
It would also eliminate the grain excise tax, which is currently paid on a per-bushel basis to the local property tax system.
Naig said while the grain excise tax is technically paid by grain dealers, it “tends to get passed on to farmers in one form or another.” Eliminating the tax, he said, would help farmers and also increase government efficiency by alleviating the need for the state to collect and then redistribute the taxes to counties.
Naig said the elimination of the credit would likely have an impact on local governments, but he said that implication would be part of broader property tax discussions planned in the Legislature.
The legislative proposal, which is not yet filed, was supported in the news release by officials from livestock, dairy, propane and row crop commodity groups.
Mark Mueller, president of the Iowa Corn Growers Association, said in the release that the package “addresses the real needs facing rural communities today.”
“We are especially encouraged by the focus on modernizing regulations, delivering tax relief and growing new markets for Iowa corn and other farm products,” Mueller said.
The farm act would also exempt sales tax on the purchase of honey bees, bringing the industry in line with tax protocols for other livestock industries. The Iowa honey industry has asked for this change for several years.
The bill would exempt storage tanks under 91,000 gallons from property taxes.
Naig said some provisions of the Iowa Farm Act have low or no cost to the state, but the overall price tag for the act won’t be known until the fiscal notes are released.
The farm act also has provisions around biosecurity. Naig said these were included in response to the ongoing outbreak of the highly pathogenic avian influenza, which since February 2022 has impacted more than 185 million commercial and backyard birds.
The bill would “safeguard” producer confidentiality during foreign animal disease outbreaks in an attempt to increase early reporting. It would also authorize the state to lease space for equipment used to respond to outbreaks.
Josh Berg, president of the Iowa Turkey Federation, applauded these sections of the proposed policy and said they are “critical” to responding to a foreign animal disease outbreaks.
“These forward-thinking provisions will enhance Iowa’s ability to support Iowa’s family farmers during times of crisis,” Berg said.
Naig said the bill text is still being finalized, but he is “hopeful” the Iowa Farm Act will become law this legislative session.
“We’ve been briefing and talking with (leadership) throughout the process,” Naig said. “We respect the legislative process. This is something that I can do, is to introduce a bill and introduce these concepts and then work to secure passage of that. Very hopeful that we see a large percentage of this actually make it across the finish line and signed by the governor.”
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