Agriculture remains one of Iowa’s most interconnected economic sectors, affecting everything from manufacturing and energy to transportation and finance, and a new legislative proposal would reshape how the state approaches agriculture policy.

The Iowa Farm Act, introduced in January by Iowa Secretary of Agriculture Mike Naig, brings together policies that have typically moved through the Legislature separately, including tax provisions, regulatory updates, transportation standards, market development and biosecurity planning.

While many elements focus directly on farmers, Naig said the goal is to provide greater coordination and certainty across Iowa’s agricultural economy, with implications for agribusinesses, processors, energy providers and other industries tied to the sector.

Naig said the provisions in the bill stem from months of outreach, including visits to Iowa’s 99 counties, roundtable discussions and meetings with farmers, businesses and other stakeholders, all guided by a central question: What would you like to see in a bill?

“There are some big pieces in here and some small pieces in here, but you do it together, and you focus on ag, and you try to move it as a package,” Naig said.

From an economic perspective, Iowa State University economist Chad Hart said the bill matters for businesses because many of its effects are likely to be felt across the agricultural supply chain, particularly at the processing level and in the connections between producers and end users.

Transportation standards and operational efficiency

One of the most immediate business-related provisions in the Iowa Farm Act addresses transportation standards for large agricultural equipment, an issue raised by equipment dealers in the state.

The bill would extend existing trailer length allowances to lowboy semitrailers used exclusively to haul large farm equipment, aligning agricultural equipment transport with rules that already apply to construction equipment.

“There was a time where really the only very large equipment that would be hauled across the state would be construction equipment,” Naig said. “But as things have modernized in agriculture, the equipment has gotten bigger as well.”

The bill also includes changes affecting milk haulers, increasing permitted gross vehicle weight limits for trucks transporting fluid milk products to or from processing facilities beginning in 2027.

Hart noted that while transportation changes can reduce costs and improve market access, they can also create indirect tradeoffs.

He said some transportation provisions could carry indirect costs, noting that higher allowable weights can reduce hauling costs but may also increase long-term road maintenance expenses.

Tax structure and cost certainty

Several provisions in the bill directly affect business cost structures, particularly in grain handling, energy storage and farm succession planning.

One of the largest changes would eliminate Iowa’s grain excise tax paid by cooperatives and grain handlers beginning in 2027.

Julie Kenney, CEO of the Agribusiness Association of Iowa, said the elimination of the grain excise tax is less about the size of the tax and more about removing administrative friction for licensed grain dealers.

“It’s very small, minimal,” Kenney said. “Honestly, the administration of it is the biggest pain, and so this just eliminates that and creates a more uniform tax system.”

The bill would exempt above-ground storage tanks with a capacity of 91,000 gallons or less from property tax, regardless of use, with retroactive applicability beginning in 2026. The provision affects a wide range of agricultural businesses, including cooperatives and processors that use on-site tanks to store fuel, fertilizer or propane.

Kenney said the provision addresses long-standing inconsistencies in how counties assess the tanks.

“Some county assessors are assessing for these tanks, some are not, and it makes it really difficult for businesses to navigate that and to figure out where they’re going to be assessing and where they’re not,” Kenney said. “This [provision] really provides clarity that these tanks are equipment and should not be assessed, and  gives everybody a fair playing field in a predictable business environment relative to that. It may seem like a small thing, but there are a lot of these tanks across the state.”

In addition, the bill updates income tax provisions related to farm tenancies by expanding eligibility for retired farmer rental income exemptions to include modern business structures such as S corporations, partnerships, trusts and estates.

Hart said the change reflects how many family farm businesses are actually organized today.

“A good number of our farm families are incorporated, and so we need to recognize that when we’re looking at how agriculture interacts with our tax laws,” Hart said. 

Market development and processing connections

Beyond cost and logistics, a significant portion of the Iowa Farm Act focuses on market development, particularly through the Choose Iowa program, a state effort to promote foods, beverages and other agricultural products that are grown, raised or made in Iowa.

The bill would create a Choose Iowa school purchasing program in state law, allowing schools to receive dollar-for-dollar reimbursement for qualifying Iowa-grown food purchases. It also updates how the Choose Iowa program is administered, including membership eligibility and rulemaking authority.

Hart said those efforts are aimed less at short-term support and more at building long-term demand inside the state.

“If we are able to build that program up, that creates long-run benefits for not only agriculture producers here in the state of Iowa, but arguably for all the citizens of Iowa having more homegrown food and agricultural products available and marketed directly toward Iowans,” he said.

The bill also establishes a butchery innovation and revitalization program intended to expand small-scale meat processing capacity by providing financial assistance for facility upgrades, new plants, custom lockers and mobile slaughter units. Eligible businesses must employ fewer than 200 full-time nonseasonal workers, with funding priorities tied to job creation and expanded processing options for local producers.

Biosecurity’s ties to economic stability

While biosecurity provisions may appear less directly tied to day-to-day business operations, industry leaders emphasized their role in protecting the broader agricultural economy.

Kenney said strong biosecurity and disease preparedness are essential to maintaining confidence across livestock supply chains.

“Anything we can do to protect animal health is important,” she said. “… We also need to make sure that when farmers do have an animal health issue or threat that they feel comfortable reporting that.”

The bill includes confidentiality protections for producers during foreign animal disease outbreaks and authorizes the state to lease facilities for rapid response equipment storage.

Naig said those measures are intended to encourage early reporting and faster containment, limiting economic damage across the sector.

“A foreign animal disease is devastating economically,” he said. “… What you’re trying to do is identify where you’ve got an outbreak, identify it quickly, respond quickly, so you can prevent the spread to other farms. … You want to get that producer safely back in business as fast as you possibly can, and do so in a way that they don’t have to worry about that disease anymore.”

Longer-term outlook

From a longer-term economic perspective, Hart said success would hinge on whether the Choose Iowa program continues to build over time, elevating the visibility of Iowa-grown products and developing into a recognizable brand for consumers. If successful, he said, the program could create value for both producers supplying those products and consumers seeking locally sourced food.

Kenney said success for the agribusiness community would be reflected in greater predictability and confidence in Iowa’s business climate.

“When the ag economy does well, all of Iowa’s economy does well,” she said. “Ag is important, it’s the cornerstone of our economy, and so anything that we can do to help agriculture thrive and grow is a really good thing.”

As of publication, the bill has advanced out of a House subcommittee and is expected to see amendments as it moves through the legislative process. 

For business leaders tied to Iowa’s agricultural economy, the proposal touches multiple cost centers, regulatory frameworks and market opportunities that extend well beyond farming.