AG and Industry Working Together

Elsewhere in this publication you are reading about the agriculture industry and the suppliers and manufacturers that support them. It may be the manufacturers that build the machinery to help farmers get crops in the ground or businesses like bio-refineries and food processors that add value to our crops and livestock and get them to market. Each year, manufacturing and agriculture compete to determine which sector is the largest contributor to the state’s gross domestic product. Both are essential, complementary parts of Iowa’s past and are critical for the state’s future.

For manufacturing, it may have started as simply as a self-cleaning plow blade manufactured to save time and effort during fieldwork. In current times Iowa boasts a robust manufacturing base that succeeds when it creates greater outcomes in the ag economy.

A former Governor of Iowa famously lamented the sight of barge after barge of Iowa corn and soybeans headed down the Mississippi River. The sight was understood as a lost opportunity to create wealth in Iowa by adding value to crops here instead of shipping that opportunity downriver. Fast forward and with that insight and federal policies, Iowa is now a biorefinery and food production hub.

This symbiotic evolution took great ingenuity and insight by ag players and manufacturers – complemented with foresight from policymakers at both the state and federal levels. It also took great investment. Investment in land by farmers. Investment in land, buildings and infrastructure by manufacturers and processors.

All that investment in property reflects the wealth created by the value-added agriculture proposition. When taxed, it also provides essential revenue for local governments. When taxes rise, there is a danger that the value-added proposition will falter or tax regimes in other places will be comparatively more attractive.

Members of the 91st General Assembly are now known as the results of the November election have been established. The majority party has pledged to reform property taxes in response to the wishes of voters. Here at ABI, we stand ready to assist in that effort and remind policymakers that the business share of local taxes is 55.9% property tax dollars collected statewide. Policymakers have an opportunity to unleash wealth creation during a careful review of property tax policy by ensuring the final product of reform treats these important sectors as essential to growth. ABI