The conversion of farmland to urban uses reduces local
agricultural production capacity as well as scenic views,
cultural heritage, and other amenities associated with
agriculture. Rising conversion rates in some areas have
motivated growing public financial support for farmland
protection at local, State and Federal levels. Preventing
conversions of private grazing lands to cropland, as
well as developed uses, has recently emerged as a Federal
conservation priority.
Trends in Farm and Grazing Land Losses
Conversion of farmland to urban usesincluding
residential, commercial, and industrial developmentis
on the rise. On average, 2.2 million acres per year
of farmland were converted to urban uses between 1992
and 2001, versus 1.1 million acres per year during
the previous
decade. Still, this annual rate represents barely
0.2 percent of the Nation's 1.03 billion acres of
cropland, grassland, pasture and range, suggesting
little threat to the Nation's
capacity to produce food and fiber.
The increase in farmland
conversions to urban development since World War
II has been fueled primarily by population and economic
growth, which have occurred in conjunction with increased
automobile ownership, declines in average household
size, and larger average residential lot sizes beyond
the urban fringe. The movement of urban populations
to suburban locations has also increased development
pressures. Urban area has more than doubled since
1960, although total land in urban uses accounted
for about 3 percent of U.S. land area (excluding
Alaska) in 2002. Developed areawhich includes
urban areas plus large lot development, development
in rural areas, and rural roads and transportationmade
up about 6 percent of U.S. land in 2002.
Although these same urban forces have recently driven
conversions of grassland as well as cropland, grassland
conversions have traditionally been fueled mostly by
cropland expansion, particularly in years of strong
crop demand. Reductions in grazing land resources nationwide
(defined here as grasslands, rangelands, and pasture),
however, mask regional variability in land-use coverage
over time. In marginal cropping areas, conversions to
cropland (and reconversions to grassland) may be influenced
by relative returns to crop and livestock production
and changes in agricultural policies. In some locations,
these trends are countered by Federal cropland retirement
initiatives that have resulted in increased grassland
area that may be grazed under specified conditions.
Thus, land moves into and out of different uses for a
variety of reasonsbut not all of the movements
are permanent. Movements of land into urban uses, however,
tend to be permanent because once farmland is developed,
it is typically economically infeasible to revert back
to farming. In 1982-97, 13.9 million farmland acres were
converted to urban uses, including about 5.4 million acres
of prime farmland. However, the share of land converted
that was prime (22 percent) was very similar to the share
of the farmland base that was prime in 1982 (20 percent),
so prime farmland was not disproportionately converted.
d
Regional Trends
The roughly 445 million acres in cropland uses remained
nearly constant nationwide between 1945 and 2002, comprising
about 23 percent of U.S. land area (excluding Alaska
and Hawaii)even though surplus production, acreage
reduction programs, and other Federal policies induced
short-term fluctuations in some regions.
Other regions have
experienced a fairly consistent downward trend in cropland
during the period.
d
The Northeast and Appalachian regions lost 34 percent
(20 million acres) of the cropland that existed in 1945,
with every state in these regions experiencing a decline.
Together, Southeast and Delta regions lost 27 percent
(13 million acres) of their 1945 cropland base. In contrast,
cropland area expanded in much of the West. The Pacific
and Northern/Southern Plains regions experienced modest
increases in cropland of 2 percent (500,000 acres)
and 7 percent (10 million acres) respectively. The
Mountain region added 43 percent (14 million acres).
Losses in the East are likely due to increased urbanization,
while gains in other regions are likely due in part to
expansion in irrigation.
While remaining the predominant use of land nationwide,
grassland pasture and range have declined from 659 million
acres (35 percent) in 1945 to about 584 million acres
(31 percent) of U.S. land in 2002. As with cropland, grassland
is consistently declining in some regions, most notably
in the Northeast and Appalachian regions. Losses in these
regions exceeded 60 percent (nearly 15 million acres)
between 1945-2002. Causes include natural regeneration
of forests and losses of grassland to urban development.
Losses in the Corn Belt and Lake States were nearly 50
percent (nearly 18 million acres) during the same period,
due partly to nonpermanent conversions to cropland. Grassland
losses in the Mountain and Pacific regions averaged about
10 percent (36 and 4 million acres, respectively), due
in part to Federal range withdrawn for wilderness or lands
reclassified as unsuitable for grazing. The Northern and
Southern Plains experienced little change, although State-level
data reveal the declines in the four states in the
Northern Plains were offset by gains in the two Southern
Plains states.
Benefits of Retaining Farmland and Grazing Land
Although as a whole the Nation's capacity to produce
food and fiber is not at risk given current development
patterns, about 16 percent of cropland is located in metropolitan
areas, which produces about a third of the value of U.S.
agricultural output.
Some crops are particularly exposed
to development pressures. For example, 61 percent
of U.S. vegetable production is located in areas subject
to urban pressure. Also, public support for farmland protection
is based in part on the "non-market" goods it produces, including local food security,
scenic landscapes, wildlife habitat, cultural heritage
and recreational opportunities.
Grazing lands provide essential forage for the U.S. animal
sector. In 1997, roughly 57 million animal-units (AUs)
were raised, in part, on forage from grazing lands, accounting
for more than 60 percent of AU
production on U.S. farms. Grazing lands, where properly
managed, also provide important ecological functions.
They help to maintain habitat and migration corridors
for wildlife, supporting a rich biodiversity of plant
and animal species. As grazing lands account for large
acreages in many U.S. river basins, they are important
in hydrologic processes involving stream flow, aquifer
recharge, and water filtration. In addition, grazing
lands sequester substantial amounts of atmospheric carbon.
Potential gains from cropland conversion to grassland
have been considered in the context of U.S. policy on
climate change mitigation.
Farmland and Grazing land Protection Policies
and Tools
Since World War II, local jurisdictions and nonprofit
organizations across the country have adopted an expanding
array of programs to protect farmland (including cropland,
grassland and rangeland) from development. Programs comprise
both regulatory and voluntary approaches. Regulatory
approaches include agricultural/rural
residential zoning, which designates areas for alternative
land uses and defines minimum parcel sizes. In some cases,
zoning ordinances may include limitations that restrict
use to farm-related activities (farm family and labor
housing, processing, and marketing). Right-to-farm laws protect farmers from nuisance lawsuits brought
by neighbors objecting to normal farm activities, and
sometimes against local government-imposed ordinances
that unreasonably restrict agricultural activities.
Voluntary approaches include preferential assessment,
which allows jurisdictions to assess agricultural land
for property tax purposes at its value in current agricultural
uses instead of its full market value for potential urban
(developed) uses. In some cases, landowners must forgo
development for a specified time period. Preferential
assessment laws were first enacted at the state level
in Maryland in 1956; by 1989 they had been adopted by
all 50 States. Other voluntary approaches include: agricultural
districts, in which enrolled landowners maintain the
land in an agricultural use for a specified term in
exchange for property tax relief, insulation from nuisance
complaints and other benefits; Purchase
of Development Rights (PDR) programs, in which landowners
sell the rights to develop the land; and Transfer of
Development Rights (TDR) programs, in which landowners
in locally designated "sending areas" privately
negotiate to sell development rights to developers who
use them to develop at higher densities in locally designated
"receiving areas." Use of these incentive-based
mechanisms avoids the property rights issues that have
hampered regulatory programs.
State Trends in Farmland Protection
State and local governments spend millions of dollars
annually on programs to protect all types of farmland
from development. For example, ERS estimated that costs
incurred through use value assessment programs (a "tax
expenditure") range from about $25,000 annually
in Wyoming to $218 million annually in California.
Another major outlay is State and county PDR programs.
Nineteen States have State-level PDR programs, and at
least 41 local jurisdictions operate separate programs
in 11 States (AFT,
2004a; AFT,
2004b). The average easement cost in State PDR programs
was about $1,400 per acre, and nearly $2,000 per acre
in local PDR programs. However, PDR expenditures are one-time
expenditures to restrict development over the long term
(or permanently).
The most active State and local PDR programs exist in
the Northeast. Maryland, Massachusetts, New Jersey, and
Pennsylvania account for 76 percent of State-level PDR
expenditures to date and 58 percent of the acres preserved
to date in State programs. Especially active programs
elsewhere include county-level programs in Sonoma County,
CA, and King County, Washington.
Nationally, ERS estimates total expenditures across all
State PDR programs to average $123 million annually. On
a cumulative basis, State PDR programs have preserved
nearly 1 million acres of farmland at a cost of nearly
$1.4 billion since the late 1970s.
d
States expend far more through use value assessment:
States forgo about $1.1 billion in annual tax receipts through these programs.
When capitalized at 4 percent, the present value of U.S.
public expenditures on use value assessment is estimated
to be $27 billion.
The amount of land preserved through PDR programs represents
less than 1 percent of cropland that ERS estimates to
be subject to some degree of development pressure (fig.
8). The total cost of preserving cropland subject to
development pressure could be as much as $130
billion.
d
To help counter urban development pressures on farmland,
States have begun to implement "smart growth"
strategies. 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. PDR programs
are one tool used to meet these goals. The effectiveness
of smart growth will depend on how the incentive
effects of new policies differ from pre-existing policies.
The high costs of permanently preserving farmland through
government funded easement programs have generated support
for locally sponsored TDR programs, at least where urban
development pressures are the major driver in land use
change. While the sponsoring jurisdiction faces fewer
costs, garnering taxpayer support in areas targeted
to receive the urban densities being transferred is
difficult, as is balancing the supply of and demand
for development rights. Fifty local jurisdictions have
passed TDR ordinances, but only 15 TDR programs have
individually preserved more than 100 acres.
Many land trusts exist to preserve farmland. These private,
nonprofit organizations accept donations of conservation
easements on farmland and environmentally sensitive land.
The donations benefit landowners in the form of Federal
and State (in 10 States) income tax deductions. In Colorado,
South Carolina and Virginia, formal markets are developing
that allow a landowner who donates an easement but cannot
use the State tax credit to sell the unused credit to
a third party (Conservation Fund, 2002). In addition,
private land trusts often assist in administering public
and private funding for land easement acquisition.
d
Federal Trends
Despite State and local prerogatives in land use management,
the Federal Government is increasingly partnering with
local/State agencies and non-profit organizations to
protect farmland. Federal efforts to protect farmland
began with the Agriculture and Food Act of 1981, 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. Direct Federal
involvement in permanent farmland protection did not
begin until 1996, when the Federal
Farmland Protection Program (FPP) was established
to help State, local, and tribal governments purchase
agricultural conservation easements to protect prime
topsoil. The FPP distributed approximately $50 million
during 1996-2001 in matching funds.
The 2002
Farm Security and Rural Investment Act reauthorized
the FPP, which was renamed the Farm and Ranch Land Protection
Program (FRPP) through Executive rulemaking. FRPP provides
up to 50 percent of easement costs on qualified, privately
owned agricultural land. It also expanded the set of entities
eligible to apply for funding to include nongovernmental
organizations (primarily land trusts). Authorized funding
increased to approximately $100 million per year for the
6 years beginning in 2002. With this increase, FRPP is
now authorized to spend almost as much annually as all
State PDR programs combined.
The 2002 Act also authorized the Grassland
Reserve Program (GRP), which targets preservation
of grazing operations on private grasslands. The program
is designed to preserve grasslands for livestock grazing
and other uses from conversions to cropland and urban
uses. Participating landowners voluntarily sell cropping
and/or development rights under permanent or long-term
(30-year) easements with a single upfront payment, or
via long-term rental agreements (10, 15, and 30 years)
with annual payments. An approved grassland resource management
plan is required for all enrolled lands, with compensation
for the use of approved practices. Program funding averaging
42 million annually ($254 million in total) is authorized
over FY 2002-07, with a total enrollment cap of 2 million
acres nationwide.
Issues in Farmland and Grazing Land Protection
Whether the benefits of farmland and grazing land protection
programs exceed program costs depends heavily on local
conditions. Making this determination is complicated
by the fact that the public benefits that are lost when
these lands are converted to other uses cannot be readily
measured in monetary terms. Instead, the benefits can
be estimated based on what people are willing to pay
to avoid losses associated with farmland conversionssuch
as the loss of rural amenities when farmland is converted
to urban uses. No studies have examined how much people
will pay to prevent the conversion of grazing land to
cropland, but estimates do exist for willingness to
pay for protecting all types of farmland from development.
Variation in local conditions leads to a wide range
in estimatesfrom
a fraction of a penny to more than a nickel per acre
annuallyto prevent the development of farmland.
One analysis suggests this willingness to pay may exceed $1
billion annually for the U.S.
The costs of protecting farmland include the direct
costs of purchasing easements and program administrative
costs, as well as the forgone value of urban benefitsand, in the case of grazing land easements, cropping
benefitswhen land is preserved. Estimates for
these opportunity costs are not readily available.
In addition to program and opportunity costs, farmland
protection programs have other impacts on government budgets,
resident taxpayers, and environmental services. Jurisdictions
may save money on public service costs by preserving farmland
because agricultural uses require reduced public services
relative to residential uses. Nearby residents may benefit,
as preserving land guarantees rural scenic views and open
space for the length of the easement (which often run
into perpetuity). However, farmland preservation may impose
costs on potential new residents who may have to live
in higher densities elsewhere, face higher land prices,
or endure longer commutes if they seek rural land farther
from employment centers. In terms of environmental services,
agricultural lands under proper management may also provide
benefits for habitat, water quality, and groundwater recharge
relative to residential uses. How programs are implemented,
and the distribution of enrolled lands, will determine
the impacts on government budgets, taxpayers, and the
environment.
Farmland protection tools vary in their effectiveness
at permanently preserving these uses and providing intended
benefits. For example, agricultural zoning exemptions
allowing higher density residential development are common,
and various non-agricultural uses (e.g., schools, utilities,
places of worship) may be permitted on agricultural-zoned
land, thus limiting the ability to preserve farmland.
Agricultural districts may have limited success in areas
where landowners commit to not develop only when their
land faces little development pressure. Preferential assessment
does little to preserve farmland in the long run because
the capital gains from developing farmland usually exceed
the rollback penalties for conversion. Preferential assessment
may even encourage land speculation by reducing developers'
costs of holding farmland in inventory.
Because they result in permanent (or at least 30-year)
restrictions on nonfarm development, easement programs
that purchase development rights (i.e., PDR and TDR programs)
are considered to be the most effective in preserving
agricultural lands from conversion to urban uses. However,
the actual effect of these programs on land development
rates and patterns is uncertain. While the number of acres
preserved can be counted, these programs may simply shift
development pressures elsewhere. Similarly, easements
that restrict the conversion of grazing land to cropland
have uncertain effects as they may result in increased
cropping activity elsewhere. Also, compliance with/enforcement
of development or cropping restrictions over the long
term may be difficult to monitor.
An often cited argument in support of easement programs
is that they help keep farmland in urbanizing areas affordable
for new farmers. In theory, once development rights have
been sold, the market value of the preserved land will
reflect only its value in a farming use, and may be significantly
lower than its residential market value. However, a recent
study found little evidence that easement restrictions
on development significantly lowered preserved farmland
prices. It could be that landowners who farm as a recreational
pursuit are outbidding "traditional" farmers
for the land. No studies have investigated the impact
on grazing land prices of easements that restrict both
cropping and development rights.
Economic implications and program effectiveness can differ
even amongst preservation tools that rely on conservation
easements. Some PDR easement programs (due to ranking
criteria and agency efforts to minimize costs) yield a
pattern of preserved parcels that are widely scattered
across the jurisdiction. This raises questions about whether
a "critical mass" of remaining farms and grazing
land can support farm input suppliers, can encourage the
sustainability of remaining farms and thus a continued
supply of amenities, and support successful rotational
grazing patterns. TDR programs, on the other hand, have
often been implemented in conjunction with reductions
in allowed housing density (downzoning) of a large area.
While many of the parcels in the downzoned area are not
technically "preserved," the combination of
zoning and TDRs may be effective at preventing widespread
conversion of farm and grazing land. It is much more difficult
to change zoning on an area-wide basis than on individual
parcels. As a consequence, large clusters of "undeveloped"
farm or grazing land (the down-zoned area) may be preserved
through TDR.
In addition to program design considerations for land
preservation, public programs and policies intended to
address other issues can influence the effectiveness of
easement programs. For example, USDA farm programs have
historically supported returns to crop producers through
price supports and mitigation of crop risk. Farm support
payments have largely been decoupled from production since
1996, but certain
payments (such as loan deficiency payments) continue
to be linked to crop production. While these payments
are not likely to increase farming returns sufficiently
to prevent or delay the conversion of land to developed
uses in rapidly urbanizing areas, they could have an effect
on landowner decisions to convert grassland to crop production.
That is, where USDA programs enhance crop returns relative
to livestock grazing in marginal cropland areas, program
incentives may have the unintended consequence of encouraging
grassland conversion to crop production and discouraging
reversal to grasslands.
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