Land Use, Value, and Management: Farmland Protection

Land Use, Value, and Management Briefing Room Major Uses of Land Agricultural Land Use Change Urbanization and Agricultural Land Farmland Protection Agricultural Land Values Agricultural Land Management Measuring Interactions Between Urban Population and Agricultural Production

• Farmland Protection Programs
• Federal Purchase of Development Rights Programs
• Smart Growth
• Programs in Selected States

Farmland Protection Programs

Over the past half century, the conversion of farmland to developed uses has raised concerns at the local, State, and national levels. There is little evidence to support concerns about food availability in the United States. Other reasons to preserve farmland include:

• Concerns about the strength of local communities
• Concerns about local agricultural economies
• Concerns about the provision of open space and other rural amenities.

As a result, farmland protection legislation has been enacted at the Federal, State, and local level. These measures include:

• Agricultural zoning
• Preferential treatment of farmland for tax purposes
• Transfer of development rights
• Purchase of development rights or easements.

Federal efforts to protect farmland from conversion to nonagricultural uses began with the 1981 Farm Bill, which required Federal agencies to evaluate the impact of federally funded programs that converted farmland to nonagricultural uses and to consider alternative actions that would lessen the adverse impacts.

All 50 States have preferential assessment programs, through which farmland is assessed at its agricultural-use value for property tax purposes, and "right-to-farm" laws, which protect farmers from nuisance lawsuits brought by nonfarm neighbors. Some States have programs to purchase development rights from farmland owners. State programs are summarized on the American Farmland Trust website.

Local governments protect farmland through a number of techniques, including zoning ordinances and the transfer and/or purchase of development right programs.

Over the last decade, several nonprofit organizations have also become active in farmland protection.

Federal purchase of development rights programs

The Federal Government has a long history of supporting rural land conservation programs. Most of these programs have involved cost-sharing with farmers to encourage conservation practices and the idling of environmentally sensitive cropland.

In recent years the Government concentrated on preserving the uses of rural lands, especially farmland. In particular, the Natural Resources Conservation Service's Farmland Protection Program (FPP) is designed to preserve land uses through the purchase of development rights.

The 1996 Federal Agricultural Improvement and Reform (FAIR) Act established the FPP to provide funds to States, nongovernment organizations (NGOs), local governments, and tribal entities that have existing farmland protection programs. FPP provides up to 50 percent of the fair market value of the conservation easement on privately owned farmland. Originally, FPP allocated $35 million from CCC to fund the purchase of conservation easements on 170,000-340,000 acres. Funded in several waves since its inception, as of December 2001, $50 million had been spent to protect about 107,000 acres of land on about 540 farms, with a total easement value of about $190 million.

The 2002 Farm Act mandated CCC funding of about $100 million per year through 2007 and removed the limit on acreage enrollment.

Smart Growth

"Smart growth" is a catchall phrase to describe a number of land use policies for influencing the pattern and density of new development.

Without prohibiting development outside designated areas, smart growth policies use incentives and disincentives to direct new development to existing urban areas with appropriate infrastructure. Using these incentive-based mechanisms and voluntary preservation programs avoids the property rights issues that have hampered prior land use regulatory programs.

Among the policies considered smart-growth strategies are:

• Designation of urban growth boundaries and priority funding areas within which State-level financial incentives for development are concentrated
• Elimination of barriers that hinder higher density development and redevelopment within growth areas
• Coordination of transportation investments with development goals
• Targeting farmland and environmental resource preservation programs.

Programs in Selected States

A recent ERS report considered what farmland protection programs tell us about the public demand for a variety of rural amenities and other nonmarket goods. A set of case studies of the rural land policies in several northeastern States were conducted as part of the report.

The mosaic that we see as the rural landscape is shaped by policies applied by a variety of governmental bodies. These land use policies have developed incrementally, with the number and combination of land use policy instruments varying dramatically across States.

For example, almost all States have implemented some form of use-value assessment taxation, legislated right-to-farm laws, and designated State parks. Some States, such as North Dakota, have essentially no other laws pertaining to farmland protection and the provision of rural amenities. A few, such as Maryland, have complex arrays of laws that influence landowner decisions concerning land use through an interaction of policies emanating from all levels of government, as well as nongovernment organizations.

The existence of these more or less complex arrays of policy means that the interpretation of farmland protection legislation must occur within the context of programs that act as substitutes or complements. These include programs that protect parks, natural resource areas, and other areas that provide either direct public access or visual open space.

These case studies of State land use policies describe how the mosaic of programs and policies form a network that embodies a State's farmland protection efforts. In particular, the overall purpose is to better understand which rural amenities and other nonmarket goods society was attempting to preserve when it implemented rural land use programs.

For instance, what can we learn concerning the relative emphasis farmland preservation programs place on preserving scenic landscapes, compact growth policies, or open-space preservation programs?

Five Northeastern States were selected for this indepth review, chosen largely because they have the most active portfolios of programs aimed at preserving rural amenities.

• Maryland
• Massachusetts
• New Jersey
• Pennsylvania
• Vermont

Each of the five States chosen has a relatively complex set of land use programs, making these States especially interesting to evaluate.

In addition, these five States have spearheaded purchase-of- development-rights (PDR) programs, which are a primary indicator of the intensity of demand for rural amenities provided by farmland. Based on the characteristics of PDR program rationale and procedures, we can discern information about the public's interest in (demand for) individual components of the rural amenity bundle.

More broadly, all five States utilize programs involving differential assessment, agricultural conservation easements, and right-to-farm laws. Maryland, New Jersey, and Pennsylvania incorporate agricultural district programs into their portfolios. Further, though transfer-of-development-right (TDR) programs are in operation in all of these States, TDR programs are implemented at the local, rather than State, level.