Background
Farmland is a highly desirable asset for more than just agriculture. As developers, investors, technology companies, and individuals looking for a rural residence all compete with farmers for acreage, the cost of land is steadily becoming disconnected from its value for agricultural production. This trend is strongest around urban areas, precisely where the most profitable market opportunities exist for new farmers, the majority of whom are growing high-value crops for human consumption and selling directly to consumers.
Working Farm Easements
To reduce competition for farmland from non-agricultural buyers, working farm easements have been implemented in Massachusetts, Vermont, and New York.
Working farm easements protect against inflated land costs beyond their agricultural value, and encourage producer ownership. They are designed to ensure that, as real estate pressures change, there will be mechanisms in place to weather that threat and keep farmland in the hands of farmers. Working farm easements include provisions that limit the resale value of farmland to ensure that it remains in farmer ownership.
Generally, farmland protection programs facilitate placement of new easements on unprotected farmland, but working farm easement restrictions can be added to existing easements. By allowing owners of previously protected farmland to reapply for funding to support these additional provisions, we can avoid losing protected farmland to non-agricultural buyers.
Recommendations
(1) Reduce competition for farmland from non-agricultural buyers by utilizing working farm easements that permanently protect farmland and encourage producer ownership.
(2) Expand existing farmland protection programs to support and prioritize implementation of working farm easements.
(3) Ensure that landowners who have already placed agricultural conservation easements on their land can utilize state funds to place stronger working farm easement restrictions on the land as well.
(4) Invest in conservation not-for-profit- and community-led efforts to research and share best practices for implementing and stewarding working farm easements.
(5) Collaborate with local governments to simplify legal and regulatory pathways toward implementing working farm easements.
Existing Legislation
New York, 2018: Assembly Bill A10301B, Working Farm Protection Act – The Working Farm Protection Act helps address farmland access by making working farm easements permanently eligible for funding through the State’s Farmland Protection Implementation Grant (FPIG) program. Working farm easements include farmer ownership and affordability provisions such as preemptive purchase rights, which help keep protected farmland affordable and in the hands of farmers.
Massachusetts Agricultural Preservation Restriction Program – The Agriculture Preservation Restriction (APR) Program is administered by the Massachusetts Department of Agricultural Resources. This voluntary program offers a non-development alternative to farmland owners of qualifying agricultural land. Farmers are paid the difference between the “fair market value” and the “agricultural value” of their farms in exchange for a permanent deed restriction which preserves farmland for agricultural use in the future.
Vermont Housing and Conservation Board – Vermont Housing and Conservation Board (VHCB): was established by the Vermont Housing and Conservation Trust Fund Act of 1987 and charged with not only protecting farmland and the future affordability of that land, but also recognizing the unique relationship in Vermont between farmland, forestland, housing, and historic preservation. In 2003, VHCB adopted the use of the option to purchase at agricultural value to better ensure that state funded agricultural conservation easements are effectively keeping conserved farmland available and affordable for future generations of farmers. VHCB’s 2016 policy guide for funding conservation of agricultural land states that, “The option to purchase at agricultural value is VHCB’s standard tool to promote the goal of maintaining farmer ownership and active agricultural use of conserved farmland, and keeping conserved farmland at agricultural values.” Today, 434 Vermont farms are protected by an option to purchase at agricultural value. // Massachusetts has required the use of option to purchase at agricultural value in all state-funded agricultural preservation restriction (APR) projects completed by the Department of Agricultural Resources since 1994; more than 600 farms have been protected under this provision since then.