Yanasa TV News
“Farmland, on Paper”: When CRP Collides with Iowa’s Tax Rules
The heart of the fight
Richard Fee’s 50 acres in Scott County, Iowa, were reclassified out of “agricultural,” triggering much higher taxes. The county points to recent years: no visible row crops or livestock, a rebuilt home and pond, and 21 acres in the Conservation Reserve Program (CRP). Fee says he still produces (about 6 acres of hay) and that enrolling acreage in CRP was good stewardship encouraged by the feds. The clash sits at a gnarly intersection: Iowa’s “present, primary, for-profit use” test vs. USDA’s conservation incentives.
For more than three decades, the Conservation Reserve Program (CRP) has been sold to the public as an environmental initiative—retiring fragile farmland to protect soil, water, and wildlife. But for working farmers, CRP can be more than a conservation badge; it can be an investment in the long-term productivity of their ground. By resting marginal acres from row cropping, planting perennial covers, and building soil organic matter, CRP allows the land to recover structure, fertility, and resilience that years of continuous production have worn thin. When those acres return to rotation, they often yield better than before, require fewer inputs, and are less prone to erosion or nutrient loss. In a time when every acre must pull its weight, CRP can function as a strategic pause—one that sustains the health of the farm for the next generation as much as it serves the prairie chicken or the duck.
What Iowa actually requires (and why the survey mattered)
Iowa classifies real estate by present, primary use carried out in good faith with intent to profit. In plain English: if ag isn’t the main thing happening on the parcel right now, you’re at risk of losing agricultural classification. The regulation that assessors and appeal boards use says ag property is land “in good faith used primarily for agricultural purposes,” with buildings for human habitation excluded.
Scott County’s published guidance operationalizes that standard: the assessor uses “best judgment,” weighs many facts case-by-case, and classifies property by its primary (principal, main, predominant) use for taxation purposes. Critically, pasture/woodland/CRP only count as agricultural when they’re operated in conjunction with land that’s already primarily in production agriculture.
So, did the county’s 15–16 question survey matter? Yes—a lot. On appeal in Iowa, the owner usually bears the burden to prove misclassification. Refusing to answer (sales receipts, Schedule F, FSA acreage, hay buyers, etc.) deprives you of the very evidence that establishes “primary, for-profit” ag use. The Property Assessment Appeal Board explicitly says read rule 701-102.1 and be ready to prove it.
Farmer-forward, but candid:
- Fee’s choice to skip the survey and block a site visit hurt his position. Under Iowa’s rules, that invites the assessor to rely on aerials and observable facts, which often tilt toward non-ag classification when CRP/amenity improvements dominate the parcel.
- A better tactic—whether or not you like the process—is to flood the record with proof of production and intent to profit (hay invoices, leases, inputs, Schedule F, FSA reports).
How Iowa treats CRP (and why it feels unfair)
CRP enrollment doesn’t automatically qualify land for agricultural classification in Iowa. If CRP (plus pond, lawn, residential footprint) becomes the dominant onsite use, assessors often determine the parcel’s primary use is no longer active, for-profit agriculture. Scott County’s policy states that CRP/pasture/woodland contribute to ag classification only when the overall tract is already primarily agricultural.
From the farmer’s vantage point, that’s perverse: USDA paid you to retire fragile cropland for the public good—yet the state’s framework can penalize you on classification if conservation becomes the main use. The county can fairly counter: classification is about present, primary use—not federal program labels or past history. But the federal–state mismatch is real.
Is this a bigger, growing problem?
Elements of this conflict are national:
- CRP’s purpose (retire environmentally sensitive acreage; pay rent; improve habitat/water/soil) remains strong public policy. USDA and the GAO describe selection criteria focused on erosion, water quality, wildlife, air, and enduring benefits, balanced by cost.
- Locally, many states and counties (Iowa included) hinge tax classification on primary use. When conservation plantings, ponds, and rural homes become visually and functionally dominant—and owners can’t document active sales/profit intent—assessors reclassify. In Iowa, the appeals channel exists, but the burden of proof is on the landowner.
We don’t have a single nationwide statistic on “CRP-triggered reclassifications,” but the incentive structure is clear: counties under fiscal pressure have reason to scrutinize borderline ag parcels; aerial imagery and questionnaires are standard tools; owners who enroll acreage in CRP and downshift production are exposed—especially if they can’t document ongoing commercial activity. Scott County, Iowa
Do CRP acres help agriculture—or just the environment?
The evidence says they help both:
- Water quality & erosion: USDA-ERS found CRP can generate billions in water-quality benefits, reduce sediment/nutrient loads, and deliver per-acre benefits well above traditional practices. That translates into less ditch dredging, less equipment wear, and, in some basins, lower municipal treatment costs.
- Wildlife & pollinators: Habitat gains for grassland birds, pheasants, waterfowl, and pollinators are well documented; prairie strip research (born at Iowa State) shows dramatic erosion and nutrient-loss reductions while maintaining overall farm resilience.
- Farm resilience & markets: By taking marginal acres out, CRP can tighten supply at the margin, support prices, and “rest” soils so that, at contract end, returning acres often have better structure and organic matter—a genuine agronomic benefit when brought back into rotation. (ERS overview.)
Bottom line: CRP is ecologically valuable and can strengthen long-run agricultural productivity. The snag is tax classification systems that don’t count conservation as “production.”
Where Fee was right—and where he stumbled
He’s right about the policy mismatch:
- The feds encourage CRP and count it as conservation success; the state/countymay treat a CRP-heavy parcel as non-ag for taxes if active production slips below “primary.” That feels like being whipsawed by two governments.
He stumbled on process:
- Refusing the ag-use questionnaire and a site verification removed his best chance to document the very elements Iowa requires: present activity, primary use, good-faith intent to profit. On appeal in Iowa, that documentation is pivotal—and the owner must carry the burden.
Practical playbook (for him—and others in Iowa)
- Paper trail, now. Gather and submit: hay sales receipts/contracts; buyer statements; Schedule F; input invoices (seed/fertilizer/chemicals); FSA acreage & CRP contracts; any grazing/haying permits on CRP (if applicable). These go straight to “present, primary, for-profit” use.
- Map the acres. Delineate the parcel: house/yard/amenity vs. hay ground vs. CRP. Show that more of the tract’s use and value is tied to production than to residential/recreational features. Scott County weighs that.
- Operational plan. Provide a simple forward plan: rotations, haying schedule, expected yields, and sales outlets. Iowa’s standard looks for good-faith intent to profit—not guaranteed profit.
- If CRP dominates, add activity. Where allowed, pursue mid-contract management, controlled haying/grazing, or pair with active acres that clearly tip “primary use” back to ag. (Follow CRP rules, obviously.)
Policy fixes that would make this fair
- Recognize CRP as “ag use.” Amend Iowa’s rule or assessor guidance to treat CRP on historically farmed tracts as counting toward agricultural classification when accompanied by documented for-profit activity (even if a minority of acres).
- Tie classification to whole-farm context. When the parcel is part of an operation with filed Schedule F and FSA records, presume ag classification unless strong contrary evidence exists.
- Transparency & reporting. Require counties to report how many properties are reclassified from ag → residential vs. residential → ag annually. If this isn’t about raising revenue, sunlight will show it.
The bigger picture
This case is a microcosm: classification-driven tax hikes on landowners who still see themselves as farmers—even as conservation and rural amenities creep into primary use. The human impact is real, but so is the policy logic behind primary-use tests. Until Iowa (and other states) reconcile conservation with tax classification, more families will be caught between a federal program that says “well done” and a local tax bill that says “you’re not a farm.”
