More than 20% of all farmland in Iowa is owned by someone, or some company, out of state. That’s pushing land prices up, and it’s becoming a major issue in the governor’s race.

Guests

Cami Koons, Iowa Capital Dispatch reporter covering agriculture and the environment.

Rabail Chandio, assistant professor and extension economist in the Department of Economics at Iowa State University.

Also Featured

Jake Bigelow, farmer and owner of Bigelow Family Farms.

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Transcript of Full Broadcast

The version of our broadcast available at the top of this page and via podcast apps is a condensed version of the full show. You can listen to the full, unedited broadcast here:

Part I     

MEGHNA CHAKRABARTI: If the candidates for governor of Iowa can agree on one thing, it’s that land in Iowa should be owned by people living in Iowa. Here’s Republican candidate Zach Lahn.

ZACH LAHN: The soil beneath our feet isn’t a commodity for hedge funds, China, or out-of-state investors to buy and sell. It’s our inheritance as sons and daughters of Iowa.

CHAKRABARTI: And Democratic candidate Rob Sand.

ROB SAND: Too often these days, your neighbor is a home owned by a hedge fund, a farm owned by China, or a data center that’s getting huge tax breaks while our bills go up. It’s wrong. I say we keep Iowa homes and land in Iowa hands.

CHAKRABARTI: More than 20% of all farmland in Iowa is owned by someone or some company out of state. That external ownership is locking local Iowans out of the land market and helping to drive up prices. In 2025, the median price per acre in Iowa hit $11,475. That’s a 66% increase from a decade ago, according to data from Iowa State University.

And those prices have put new acreage out of reach for farmers like Jake Bigelow. He’s a livestock farmer who runs Bigelow Family Farms in Winterset, Iowa. And Jake says there’s not enough land to go around for new farmers or small farmers looking to expand what little they already have.

JAKE BIGELOW: Farming is a way of life, and it’s bred into certain people, I feel like. When I graduated college, I had the opportunity to buy a farm down the road from my parents that had a house that was built in 1910. And so I borrowed everything to buy it, and then worked full-time as an engineer until 2009, and then started working part-time as an engineer, farming part-time.

In 2020, I finally farmed full time. I own 40 acres. I farm about 500 acres. In 2012, we had a drought. People started to invest more in land than maybe other areas, and so land prices really took off.

And so the rate of inflation on land was going up faster than I could save. Now, it’s like a piece of land comes up for sale, and either, one, it is privately sold, or two, it goes on like an auction, and you could be bidding against somebody in New York, California, that might never see the land, but they’re going to buy it and rent it back out.

And so then the investor gets a dividend back, and then in five years, they resell the land. So there’s a lot of competition on the market. There’s not this rollover that we’re seeing to get the land rolled from the older generation to the younger generation.

The fact that I can’t own it and take care of it the way that I want to is very disappointing, stressful, depressing.

The fact that I can’t own [farmland] and take care of it the way that I want to is very disappointing, stressful, depressing. Jake Bigelow

The bigger farmers are able to buy more land and keep industrial farming it. Are they going to be able to change over to more soil health, regenerative type farming that I think is needed? In the last 20 years, we’ve come so far in soil biology and soil health that we’re leaving out a whole generation of farmers that aren’t coming back to farm that might be able to implement that might be able to say, “Hey, if I had 500 acres, I could do this.”

And it’s disappointing for me that transition from a renter to an owner isn’t taking place. I don’t wanna be 60 years old and then trying to figure out how is my farming operation changing, and then how is it that I’m going to be able to do it at 60?

I’m probably gonna be a renter most of my life or all of my life.

It’s the next generation that’s getting the big squeeze because they’re not even getting the access to that. They’re coming in and they’re saying I’m gonna be a hired hand, and that might be all I get to do.

CHAKRABARTI: Farmer Jake Bigelow lives in Winterset, Iowa. Now, there is an interesting difference between the high cost of housing, which most of us are familiar with, and the high cost of land.

It might seem obvious, but it’s important. We can build more housing, which ideally could then decrease the cost of housing. But when it comes to land, there simply is what there is. We cannot create more of it. Okay, maybe some islands out in the ocean, but the fact that we cannot create more land, that is the source of its preciousness, especially when it’s used to feed people, and it’s one of the reasons why this question of who owns land in Iowa has become central in this year’s governor’s race.

So let’s talk about that with Cami Koons. Cami is a reporter with the Iowa Capital Dispatch, and Cami covers agriculture and the environment, and joins us from Des Moines. Cami, welcome to On Point.

CAMI KOONS: Thank you so much for having me.

CHAKRABARTI: Okay, so tell me a little bit more about how this issue of land ownership is playing out in the gubernatorial race.

KOONS: Yeah, what’s interesting is, as you mentioned, this is actually an issue that the two candidates agree on. That this is an issue, and I think it’s something they’re hearing a lot of from farmers and from rural communities which is why it’s something that they both have put into their policy platforms.

So we’ve got the Republican candidate for governor, Zach Lahn, who has talked about calling for human-level disclosure of land ownership. Saying what the farmer we had on has said himself, like, going to land auctions, sometimes it’s people bidding on the phone. You don’t even know who is buying this land. And basically, saying that we don’t know who owns the land in Iowa even while farmers are trying to purchase it, and they maybe cannot.

I think that it also gets onto the idea of if people are not living on that land, living in that community and farming it they don’t have as strong of a connection to it, aren’t going to take care of it as well, or care about what happens in that community as much. Both candidates have proposed tax policies that would essentially incentivize the people who live on the land to own that land and maybe make it less attractive for outside ownership to continue owning that land.

CHAKRABARTI: Okay. So let’s take a step back here for a second Cami, before we go more into sort of how both candidates want to repair this problem, because I think a lot of people who live in more urban contexts might, they might say this is a familiar story, right? LLCs or REITs or just some corporation who isn’t local owning property and you know both the upsides and the downsides of that.

How did it become such an issue in Iowa? How did it get, do we know, to that 20% of out-of-state ownership of acreage in the state?

KOONS: Yeah, so this is an interesting question and something that I was also interested in … and wanted to look into more. So I spoke with some researchers here in Iowa who look into land ownership trends and things like that.

And basically, a lot of this trend that we’re seeing has come from family farm succession planning. Which is the idea of, my grandpa is retiring, he wants to pass down the land. I’ve got four siblings, only one of us farms or maybe none of us farm, but we don’t wanna give up the land because it’s our family land.

We want to keep it in the family, so we put it into maybe an LLC or into a trust. Then we all live outside of state. We rent that land out to farmers. We still own the land. We still have ties to Iowa, but we’re not directly living on that land, farming it. I think that’s a trend that is continuing to happen as more people move away from the farm, and also as it becomes more difficult to sustain a family on a single farm income, especially, depending on the size of your farm. A farm that supported your grandparents is probably not going to support you and your four siblings now.

CHAKRABARTI: Yeah. Okay, so actually later in the show, we will have an economist who’s done a really deep dive, maybe even someone you’ve actually spoken with Cami about the decades-long trajectory of this land ownership question. There is something though that I wanted to ask you about, because in those clips that we heard from both the gubernatorial candidates, it was really interesting to me that they said, and these were both from ads, right? But they said, “Hedge funds, China, or out-of-state investors.”

Actually, they said it in the same order, both the Republican and Democratic candidate. So those first two, hedge funds or China, do we know whether the majority of this out-of-state land ownership is with those two, let’s say, provocative potential owners?

KOONS: Yeah. This is a really interesting question, and certainly it presents itself as a great talking point, I think.

If you’re a local farmer, you don’t want China or someone who just has a bunch of money owning the land down the street from you. So I think it’s a really kind of provocative talking point to say that. But when we look at the data, and again, you can speak with Rabail about this later to get more into specifics, that’s a small percentage of this land, especially the land owned by China.

That is a big talking point that we have heard especially from the Trump administration. They’ve even launched a whole initiative on stopping the Chinese ownership of agricultural land. But here in Iowa, that is, I want to say it’s less than 1% of land that’s owned by China. It’s a very small percentage, but certainly I think it sounds like a scary talking point. But it’s something we should stop.

CHAKRABARTI: Yeah. And the hedge funds? Is it similarly like a low percentage or is … how do we know?

KOONS: What’s interesting is that Iowa also has really strict anti-corporate farming laws. So there are only certain types of LLCs that can own farmland in Iowa. And part of that is to protect it to be, like, these family LLCs.

So if me and my four siblings that I used as an example, I don’t actually have four siblings, but if we wanted to keep that land in our family, it makes a lot of sense to put it into an LLC or a trust. And Iowa’s laws around this make it so that it’s mostly families or entities, other LLC entities that own land in Iowa can only own up to 1,500 acres.

So trying to really get at stopping that from happening, and if you talk to agronomists, we have or ag economists, excuse me, we have some of the strongest land protection laws in these matters.

Part II

CHAKRABARTI: Rabail Chandio joins us. Rabail is an assistant professor and extension economist at the Department of Economics at Iowa State University, and she joins us from Iowa Public Radio.

Professor Chandio, welcome to On Point.

RABAIL CHANDIO: Thank you for having me.

CHAKRABARTI: Okay. You actually have done extensive research on the, as I said earlier, the trajectory of land ownership in Iowa. So can you pick up where Cami left off and tell us, like, how far back should we look to see the beginnings of a marked change in sort of who owns farmland in the state?

CHANDIO: That’s an interesting question, and that’s a big one. When I think of when we’re trying to deconstruct who owns farmland, there are a couple of different perspectives we need to consider. One is ownership in terms of whether it is more family or individualized, compared to more institutional or formal ownership.

And here I mean if a sole proprietor is owning the land or a joint tenant is owning the land, compared to an LLC or a trust. That doesn’t mean the LLC is not owned by an individual farmer. That just means the way it shows up on the books will be more formal or more institutionalized.

And when we consider that lens, there is a rise in institutional ownership. And it used to be around 10% of land was in a more formal sort of ownership, things like LLCs, trusts in 1982. And over 40 years, the latest data point we have is in 2022, that has increased all the way up to about 40%. So that has increased almost fourfold.

So there is a rise in more formal and institutional form of ownership. But as Cami also mentioned, a lot of that is tied to succession planning. That doesn’t mean that these trusts and LLCs don’t have families or individual farmers behind them. That just means that these people prefer these forms of ownership now because likely it makes it easier for succession planning, for taxation, for paperwork, for continuity, for accounting, for having several inheritors that now have an interest in this land instead of one single person who owns, operates, controls, and makes all the decisions.

CHAKRABARTI: If I may just jump in here. To be clear, in succession planning, whether you own farmland or your home, forming a trust is the de facto advice that people get these days, right? In order to keep your property out of probate and to have a good plan for what happens when you pass.

In a sense, that should be a completely non-controversial shift even in Iowa.

CHANDIO: Yes, Meghna and it is promoted. And in terms of making succession easier we would like it to be at a much higher amount than it even currently is right now. So it covers about 40% of farms, but that also means it doesn’t cover the majority of farms right now, and that means the majority will likely face these troubles or struggles when succession comes around because of not having these formal structures in place.

So in a way we want it to be even higher.

CHAKRABARTI: Yeah. In terms of succession within families. Understood. And LLCs are an interesting one. I want to come back to that, even if they’re sole proprietor LLCs. But then I guess the question I’m left with, is what’s the issue then? What’s causing the pressure that people, farmers like Jake Bigelow, have been voicing recently?

He feels locked out of the land market in Iowa.

CHANDIO: So two perspectives around here. The first is access for farming for beginning farmers, for new farmers. And there’s a lot of factors that go in there, including consolidation, including the scale of farming. A 200, 300 acre plot was profitable and was enough to sustain a family a couple of decades ago, three, four decades ago maybe.

But in the current scale of things, in the current way farming has transformed with the machinery and equipment being massive and massively expensive as well, and all of the leverage that’s required to afford it all, the minimum efficient scale of farming or the profitable scale of farming has increased from a couple hundred to at least a couple of thousand acres.

That’s where the big access issue comes in. So you could maybe get a loan to buy a few hundred acres, as long as there’s some family support, and that was a viable option for new people. But you cannot get enough credit as a new college grad to buy 2,000, 3,000, 4,000 acres when they’re about $10,000 an acre on average, and on the high end they go even higher.

So one problem with access comes from that and or the trouble of sort of controlling farmland or having new people in the market.

CHAKRABARTI: Okay. So this is the many decades old story of the corporatization of American farming then.

CHANDIO: I wouldn’t call it corporatization. I would call it’s a matter of consolidation.

CHAKRABARTI: Consolidation. Okay.

CHANDIO: Yes. The second aspect comes from financialization. Who controls these acres, and how has that control evolved? And that is also not something new. Every now and then it comes back up as a concern, but that’s been a decades old, if not a centuries old phenomena. We can go back about a whole century and talk about the increase in lawyers and bankers and all these non-farming entities buying farmland in the 1920s because at that time it was as a promising diversifying venture.

But when the Great Depression came around in 1930, that outside interest subsided. So there was a big wave of non-farmers buying farmland, creating that financialization. And whenever waves like that come, a lawyer is not going to take the tractor on the land. That creates a need for somebody else to manage that farm.

That coincides with farm managers and other entities or tenants managing the farm. So that separates ownership from control. That’s where the second aspect of issue comes from. How much has ownership separated from control? So I mentioned 1920s, but then that rose again, or that interest picked back up again in the 1970s, ’80s.

And after the financial crisis, in fact, it made it easier for the other entities to buy farmland for cheaper when there were a lot of foreclosures, when values of farmland really declined, really sharply fell after, a lot of farmers couldn’t hold on or service the debt that they had at that time.

So in our case, in Iowa particularly, those entities do not look like big corporations. We have very strict anti-corporate laws. But some of our neighboring states, we go over to Illinois, Indiana, they don’t have those laws. So there we did see the financialization pick up a lot quicker. We saw big pension funds; investment institutes buy up farmland.

And there we see a lot more investor activity than we see here in Iowa just because of the state regulations. So that would be the second or more recent round of financialization. The third and most recent would be the same thing happened, but post-ethanol boom, when again, farming is very attractive, very profitable.

CHAKRABARTI: Okay. I feel agriculture is both, there’s a simple fact of it, right? That farmers take care of land, they grow food, and we eat it, right? It’s like just the core of the American story. But also, it seems very complicated. And Cami, I’m gonna come back to you in a second here but Professor Chandio, I’m still, as a non-farmer, I’m still trying to, I’m still confused about why farmers are feeling so distressed. The new farmers like you described, okay, I get that, or people who want to expand. It’s hard for them to acquire the critical mass of new acreage that they need in order to become financially stable as a farming production.

But if the rules on corporate ownership are as strict as they are in Iowa, like fundamentally, has the ownership structure of who owns land in Iowa changed? It would still, it might be LLCs and trusts, but it’s still families, right? I’m just wondering how young farmers or smaller farmers 30, 40, 50 years ago were able to acquire more acreage.

Does that make sense?

CHANDIO: Yes. Yes, and that’s a great point that you raise, Meghna. So the ownership structure has changed a little bit but out of necessity. We have most of our farmland, more than two-thirds, is owned by somebody we classify as a late-stage farmers. They are 65 years of age or older. And that is the majority farmland owners category where a lot more land was in the hands of mid-stage or relatively younger farmers a few decades ago.

And the reason that transition is not happening, or the reason that it creates an ownership, I wouldn’t say concentration, but I would say it is an ownership and control in more established or more existing farmers’ hand, is because we don’t need as many people on the farm anymore as we did before, and that has led to a lot more consolidation.

Where there were 100 operations before, now there are 10. They look a lot bigger. They have a lot more machinery, but there are 10. So where those 100 operations needed 100 owners or 100 operators, we don’t need those 100 people to operate the same amount of farmland anymore, and that’s where the separation from ownership and control comes.

Like Cami mentioned, a lot of the owners might be inheritors, a second generation or third generation of farmland, farmland owners who have now chosen some other careers. They’re a lawyer in Minnesota. They’re a banker in Colorado. They still own that farmland. But what that does is … that goes into professional farm management.

That goes into leasing of land to others. And the person who’s leasing the land, now they need to lease 2,000, 4,000, 6,000 acres. So there’s a much more separated ownership and control than there was before.

Those two things used to be much more connected before.

CHAKRABARTI: Okay. So this, now it’s starting to be clear to me.

I’m sorry if I struggled there for a little while, but I really wanted to have clarity on what the cause of the concern is for many, for an increasing number of Iowa farmers. So it’s that consolidation issue. So Cami, tell me what you’re hearing from farmers now about the distance that they’re literally feeling over the control of the land they’re farming since many of them are not direct owners.

KOONS: Yeah, I think there’s a concern, and what’s interesting is that this issue also came up in the Secretary of Agriculture is an elected position here in Iowa. This also came up in a debate between the candidates for that position as well with one of them being a big water quality activist and talking about how maybe mandating conservation practices on specifically rented land would incentivize those owners to disinvest in that land so that the people who are farming it can actually buy it.

Because there’s this notion of if you own this farmland, you’re going to take better care of it, you’re going to be a better steward of it, versus if live in Colorado and you’re leasing it the farmer who’s gonna farm that is gonna treat it as just a place to turn a profit.

They’re not gonna invest in things like cover crops or buffer strips along the outside of it. I think that’s a big part of this as well.

CHAKRABARTI: Professor Chandio, I wonder if you would like to comment on the political aspect of this that’s happening right now in the governor’s race, because I can’t stop thinking about the fact that both Lahn and Sand are talking about this issue in a misleading way, right?

Because the consolidation creating a disconnect between ownership and control, that is real, as you’ve described it. The increasing price of farmland, also real, as you’ve described it. But neither of the candidates are saying, “And it’s because of LLCs that are owned by family members of the original farmers who lived in Iowa.”

No. Instead, they’re saying, “Boogeyman hedge fund. Boogeyman China.” Does that give you, first of all, what do you make of that?

CHANDIO: I understand having a concern for who owns and controls farmland, specifically in a state like Iowa where agriculture and agriculture-related industries are primary income driver.

So most people in Iowa are ag or ag related, and most of our income comes from that. So who controls that really is a concern for the population. It’s not one person’s concern, it’s everybody’s concern.

CHAKRABARTI: I totally agree, right? Because farming touches everybody in Iowa, whether or not you’re directly on a farm and working on a farm.

But I’m wondering if a person seeking office actually wants to find a real solution to a problem, accurately identifying what the problem is, I would always think is the first step. If the problem is out-of-state ownership by the descendants of Iowa farmers, that’s not the same thing as trying to solve a problem when you say it’s hedge funds that are owning a farm.

CHANDIO: That’s an interesting question. So in terms of defining a problem, you’re absolutely correct. The problem is very hard to pin on one single entity, and especially when we do that, the hedge funds or foreign owners are not necessarily big movers of farmland markets in Iowa. But in terms of defining the problem before solving it, I would think it is hard to figure out a way to solve the problem.

It’s very hard to decide how to create better access to farmland. So it’s not necessarily a very simple thing where you say, “Okay, let’s do A, B, C, and now farmers will have the access.” So we’re talking about one aspect of it, but the other aspect of it is why did this happen? We cannot stop consolidation.

It happened because farmers needed to make money in a major business way. The business acumen or the way the farm operation works now dictates that this be the way it operates. We need more acres. Why we went there? We went there because we wanted to increase our yields. We needed the bigger equipment, the bigger machinery, and we want to compete internationally.

We have, we are already neck to neck with Brazil when it comes to soybean production or even corn for our international markets. So we need to be more productive. We need to increase the yield. That requires consolidation. That requires big machinery, which creates this offshoot problem of people having difficulty accessing farmland.

So it’s a sort of a roundabout problem. It’s very hard to pick which end to get behind and how to solve it. In some cases, and it might not be relevant for Iowa, but the investors as well. Investors are not necessarily the ones that are going to outbid farmers in a market. Investors have incentives of turning the land around in three to five years, where it doesn’t make sense to overpay by a large margin because you won’t be able to sell for a profit in five years.

Outbidding the record prices that we’ve hearing about in Iowa we talked about the average or median price being around $10, $11,000. But the records here, you might have heard about them, are $32,000 an acre.  That’s the most expensive, yeah.

Part III

CHAKRABARTI: Cami, let me just go back to you here for a second because we talked about succession-based trusts a little earlier in the show, which is pretty straightforward.

But I wanted to ask you about LLCs. And I wonder what your reporting has shown about do LLCs complicate the picture in a different way in Iowa?

KOONS: Yeah, what’s interesting is this is how I got into writing about this story is looking at the LLC ownership specifically because we’ve seen Zach Lahn, the Republican candidate for governor, talking about calling for human-level disclosure and particularly villainizing LLC ownership of ag land.

But again, as I looked into it, and basically what I found is a lot of these LLCs are done for family planning purposes. Or again, we’ve got those strict laws in Iowa to prevent LLCs from owning too much land. And even laws that require you to have family ties to have an LLC owning land.

CHAKRABARTI: Really? Okay. Professor Chandio, did you want to add to that?

CHANDIO: Yes. And like Cami said, we want more LLCs or more trusts, because succession is a big problem. And our university and extension program is actually promoting to adopt those sort of ownership structures to save the next generation a lot of trouble when farming when it comes to farming.

CHAKRABARTI: Okay. Let me go back to Cami for a second here, because you were talking about that Zach Lahn wants to have basically rules that say you have to fully disclose who owns the LLC. I wonder if he knows that the Trump administration, the Treasury Department, just issued a rule that’s eliminating any kind of disclosure requirements that we had for the past couple years.

We did a whole show on this. That there was a short period of time in the last few years where the government required all business entities essentially, but especially LLCs, to report beneficial ownership. So you could actually go to the federal government and look up who owned any LLC.

That rule has now been eliminated by the Trump administration, so I’m not quite sure what good Zach Lahn’s proposal would do, Cami.

KOONS: That’s interesting. I can’t speak to what he knows on that topic if he’s aware of that or what his stance is on it now.

But I do know that I don’t necessarily know that we have a good idea of what human-level disclosure is, what that would look like. And also, the more that I looked into this, the harder it was to really get a sense for I guess why that was necessary or what the pain point is among farmers.

Do they not know who their neighbor is? Where is that really becoming a stressor? And I wasn’t really able to get a clear answer on that.

CHAKRABARTI: It’s interesting. I think … So the fact that you couldn’t get a clear answer tells us something about the nature of this problem. At the end of the day, Cami, is it simply, is the end result of all of the economic history that Professor Chandio walked us through, that it’s just too expensive?

The land has become too expensive for many of the farmers who are farming the land.

KOONS: It certainly seems like there is a lot of pain because of that point, and I think that we love a scapegoat and something we can point to and say, “Hey, maybe this could be a solution.”

CHAKRABARTI: Yeah.

Okay, so Professor Chandio, let me go back to you because you were saying just before the break, and I’m sorry I had to interrupt you there, that there have been some eye-popping auction prices per, for acreage in Iowa, and I think you had said something like $30,000 per acre in some cases?

CHANDIO: Yes. $32,000 an acre, and that broke the previous record of $29,000 an acre. And both of those purchases were made by existing farmers. Investors will never pay that kind of money because it doesn’t make them a return in the short run, in the three to five years time span in which they will often turn over the land.

So that sort of pricing only comes from the existing established farmers. So to me, the divide is more between beginning farmers, people who are renting land, who are trying to buy a few acres at a time to build up that viable farming operation, versus the more established farmers who have the capital built up, who have the equity already to bid at the scale that we see in these sort of instances.

CHAKRABARTI: Are these established farmers in Iowa?

CHANDIO: Yes. In one of these cases it was a bidding between brothers, I believe, in another … who are operating in the same county. In another, in another case it was again one of the neighbors. Because when you are paying that much, most of the time the reason is because this one particular farm only came onto the market once in your entire lifetime, and this is your chance to buy it before it goes away from the market for, let’s say, another 50 years, 100 years. Who knows how long. So they will pay whatever it takes to buy this particular farm because it’s likely adjacent to their operation. It’s likely specifically this farm is the one that really makes things easy for them. Nobody else will pay that much money because an investor somewhere else out of state doesn’t value this one particular farm that much.

CHAKRABARTI: But on the other hand, the financialization of farmland, though, does provide a kind of accelerant to the price f that, when it’s seen as an asset, right? That’s why investors invest in places where they feel that they can get a quick ROI. Isn’t that right, professor?

CHANDIO: Yes. And every time the ag industry does well, and ethanol boom was a good example of that, that financialization picks up because that brings it on the radar of investors looking for alternate investments. Farmland has always been very safe, and it’s everybody like you, you also began with that saying, “We’re not making more of it.”

And that’s a perspective held by a lot of people that even if times are bad, you just need to hold out and farmland will eventually appreciate. That has been the case if you look far back enough. You zoom out, you go back 10 years. Let’s say you didn’t make money in the last 10. You zoom out and you look back at the last 20.

If still no, last 30, eventually you zoom out enough, you will have made money on farmland.

CHAKRABARTI: But you have to be willing to do the long hold

CHANDIO: Yes. So it is generally the long hold asset in the big portfolios of pension funds, retirement funds or this is not the asset for them that they will turn over.

The investors, there’s another category of investors who will work with farm managers, and they will buy farmland for renting to tenants professionally, and then they will likely look for a turnover in three to five years. And that is the category that will want an ROI in the short run. For that ROI, the big absurd prices don’t make sense.

They will want it likely cheaper than market, and they will likely be more willing to buy when ag industry is more of in a downturn situation because that time offers them a price that’s going to make a profit.

CHAKRABARTI: Okay. So they’re not bidding up the prices is what you’re saying, which I guess hypothetically, if they’re not bidding up the prices, then the prices that they’re looking at as a potential buy would be hypothetically in the same sort of price range as the smaller farmers who we’ve been hearing who can’t get new land.

CHANDIO: Yes. And in some sense, investors do stabilize the market because they will buy in, let’s say, bad times when less people are willing to buy, so that keeps the prices from going further down. So they will not buy the highs, they will not buy … they will always find, want to find the extreme lows, which generally haven’t occurred recently.

So they do stick around the middle in that sense in terms of pricing, and they don’t have the affordability problem that a beginning farmer does, but in terms of pricing, they will fall in the similar bracket.

CHAKRABARTI: Okay. Cami, can you do me a favor?

KOONS: I’ll try.

CHAKRABARTI: I thank goodness every single day for local reporters because if I were at a gubernatorial event in Iowa right now, here’s the question I would be dying to ask. And I’m gonna request that you consider asking this question of the candidates. Okay? You don’t have to, because you’re the expert here. But right now, what I’m dying to know, and the two … I can’t ask the two of you to answer it, is: … Why do you keep talking about hedge funds in China when the real issue, as described by economic experts in Iowa, is established large-scale Iowa farmers who are bidding up prices and locking up land ownership that’s keeping other smaller Iowa farmers, perhaps their neighbors, out of the market?

How are you gonna solve that problem? That’s what I would ask them.

KOONS: Yeah, I feel like I asked them that for this article and didn’t really get a super clear answer. Or just asked for clarification as to, like, why this was such a big issue.

CHAKRABARTI: And they said … what were their sort of obfuscating answers?

KOONS: Basically “We want to keep Iowa land in Iowa hands.”

CHAKRABARTI: But it is in Iowa hands. That’s what I’m feeling here the… What 80% of it is still in Iowa hands.

KOONS: I think it’s worth mentioning on this issue that it’s not just China or investment landowners that are villainized in this, or maybe villainized is too strong a word, but farmers get upset pretty much any time there’s a taking of agricultural land.

We’ve seen bills in the legislature where trying to restrict the Department of Natural Resources here from being able to acquire land, which they don’t have a whole lot, and they maybe buy 100 or so acres at a time that they add into conservation or to add into parks. There’s opposition towards developers.

There’s opposition towards solar fields or data centers or other electricity generation or big infrastructure projects that are taking agricultural land out of production. That’s always a big pain point here.

CHAKRABARTI: Okay. Let’s actually listen to a little bit of what the candidates themselves have been saying on this issue beyond the ads that we played at the top of the show.

So here is Republican gubernatorial candidate Zach Lahn, who was on Tucker Carlson’s show in February, and Lahn said he wants to restore Iowa to a rich agrarian society. That’s what he said.

And a pathway to that, he believes, is through increased land ownership by Iowans and what it would bring.

LAHN: Just that setup of farmstead and neighboring farmstead that care for each other and that did a lot of life together was the most in tuned and connected, I think spiritually, we could probably say we have been as a society or community. And I would like to see that return.

CHAKRABARTI: That community aspect I don’t think many people would disagree with because both of our guests today also talked about that, because farming has an impact on everyone in Iowa. Here is Democratic gubernatorial candidate Rob Sand. He told Iowa’s PBS back in November of last year that he would like to see out-of-state landowners taxed more heavily than in-state landowners.

SAND: The culture of this state has a lot to do with neighborliness and knowing who you’re next to, and I think having people here who we know who they are we know that it’s not a foreign company, country, and that we’re making it a little bit easier for Iowans to be able to afford a piece of Iowa is a good idea.

CHAKRABARTI: Professor Chandio, I wonder if you had a thought on that?

CHANDIO: Taxation is interesting, but to me, an issue that prevents transfer of farmland is the stepped-up basis that kicks in when somebody passes away and it’s a matter of inheritance. So I think that would help a lot more people be able to buy farmland that comes on the market relatively earlier or get transferred relatively earlier if we allow people to transfer land before they essentially die.

So I think rather than focus on the small percentage of non-resident owners, I think access issue is something that will probably get resolved more by trying to figure out how we can restructure. And that’s a big question. I don’t have an answer for that, but that’s a very big question.

Somehow make it easier for access to occur within state.

CHAKRABARTI: That would require perhaps limiting acreage that any one particular person could own, even in Iowa.

CHANDIO: And now let me be the devil’s advocate here. By doing that, if you’re restricting the scale of business, you are essentially making our people not be able to compete with the big global producers. And so that’s not an easy solution to implement.

CHAKRABARTI: Yeah. Okay. So let’s go back and listen to Jake Bigelow, the farmer that we heard at the top of the show. Wanna give him a voice here one more time because as you heard, he’s renting the land that he’s working, and he says it discourages him from making the investments that would benefit both himself economically and the land ecologically.

BIGELOW: As a renter, I would put fences in different spots, but then I’m like, “But how much time and money do I wanna spend on something that I don’t own?” It’s like if you go rent a car for a day from Enterprise Car Rental, you’re gonna drive it, you’re gonna pay the fee, and then you’re gonna return it, and you’re not gonna come back and say you know what? You guys let me rent it, so let me go change the oil.”

CHAKRABARTI: Yeah. We have less than a minute to go here. Cami, overall, can you let me know, like, how much is this land issue really present in the governor’s race? It caught our attention, but vis-à-vis other things that are happening in Iowa, is this sort of a definitive issue or not?

KOONS: It certainly is an issue that comes up. It came up again in the Senate race as well in the debate last night, but I don’t think it’s a central issue to this gubernatorial race, especially since the candidates by and large have the same point of view on it.

CHAKRABARTI: It seems like they have the same point of view that something must be done, but neither of them have any ideas of something effective that could be done.

KOONS: You said it.

CHAKRABARTI: I can say that. I’m a host, not a reporter, professor Chandio, I’m gonna give you the last 30 seconds here, and as I’ve been listening to this conversation, it occurs to me that what’s happening in Iowa right now regarding the land is the agricultural version of income inequality overall in the United States.

We have a small number of very well-to-do people who have a lot of money. In this case, we have a small number of large-scale farmers in Iowa who are doing well, and it’s just keeping everybody out of their potential growth. Does that seem like a fair analogy? I’m sorry, we only have about 15 seconds left.

CHANDIO: Yes. Yes, that’s about correct. The consolidation or the lack of affordability in the housing market can be translated here. For housing, you have big, expensive houses that are available, not affordable. For farming, young beginning farmers cannot afford it, but big existing ones can. Yeah. So it is comparable in that sense.

This article was originally published on WBUR.org.