farmland information center fact sheet | the farmland protection toolbox | american farmland trust

8/14/2019 Farmland Information Center Fact Sheet | The Farmland Protection Toolbox | American Farmland Trust

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This fact sheet provides a brief description of thetools and techniques that state and local govern-ments are using to protect farmland and supportthe economic viability of agriculture. Some of thetechniques result in programs that are enactedand administered at the state level, others areused primarily by local governments. Sometimes,municipal governments adapt and strengthenstate laws to meet unique local needs. Some of the most effective farmland protection programscombine regulatory and incentive-based strategies.

AGRICULTURAL DISTRICT PROGRAMS

Agricultural district programs allow farmers toform special areas where commercial agricultureis encouraged and protected. Typically, programs

are authorized by state law and implemented atthe local level. Enrollment in agricultural districtsis voluntary. In exchange for enrollment, farmersreceive a package of benefits, which varies fromstate to state.

There are 19 agricultural district programs in16 states. California, New Jersey and NorthCarolina offer farmers two levels of benefits.Minnesota and Virginia have statewide and localagricultural district programs. Ohio has twostatewide programs.

Agricultural district programs are intended tobe comprehensive responses to the challengesfacing farmers in developing communities. Tomaintain the land base for agriculture, someagricultural district programs protect farmlandfrom annexation and eminent domain. Manyalso require that state agencies limit constructionof infrastructure, such as roads and sewers, inagricultural districts. A few offer participantseligibility for purchase of agricultural conserva-tion easement programs, and two states includea right of first refusal in district agreements toensure that land will continue to be availablefor agriculture.

Agricultural district programs help create a moresecure climate for agriculture by preventing localgovernments from passing laws that restrict farmpractices and by providing enhanced protectionfrom private nuisance lawsuits.

To reduce farm operating expenses, some pro-grams offer automatic eligibility for differential

assessment or property tax credits to farmerswho enroll.

Some states encourage local planning by limitingdistrict authorization to jurisdictions with

comprehensive or farmland protection plans,requiring the adoption of land use regulations toprotect farmland, involving planning bodies inthe development and approval of districts, andlimiting non-farm development in and aroundagricultural districts.

AGRICULTURAL PROTECTIONZONING (APZ)

Agricultural protection zoning refers to countyand municipal zoning ordinances that supportand protect farming by stabilizing the agricul-tural land base. They designate areas wherefarming is the primary land use and discourageother land uses in those areas. APZ limits theactivities that are permitted in agriculturalzones. The most restrictive regulations prohibitany uses that might be incompatible with com-mercial farming.

APZ ordinances restrict the density of residen-tial development in agricultural zones. Maximumdensities range from one house per 20 acres inthe eastern United States to one house per640 acres in the West. Exclusive agricultural useAPZ prohibits non-farm residential developmentNon-exclusive APZ ordinances use differentapproaches to limit density. Large minimum lotsize APZ sets a minimum lot size for each resi-dence. For example, some ordinances require40 acres per dwelling unit. Area-basedallowance APZ uses a formula to achieve adesired density on the parent tract but allows orrequires houses to be situated on small lots of 1or 2 acres. The ratio may be fixed or based on asliding scale that requires more acreage perdwelling for larger parcels.

In addition to limits on residential development,some APZ ordinances also contain limits on sub-division, site design criteria and right-to-farmprovisions. They may also authorize commercialagricultural activities, such as farmstands, thatenhance farm profitability. Occasionally, farmersin an agricultural zone are required to preparefarm management plans.

TheF ARMLAND I NFORMATION C ENTER

(FIC) is a clearinghouse for information about farmland protection and stewardship.The FIC is a public/private partnership between the USDA Natural Resources Conservation Service and American Farmland Trust.

A M E R I C A N F A R M L A N D T R U S T F A R M L A N D I N F O R M A T I O N C E N T E R

FARMLAND INFORMATION CENTEROne Short Street, Suite 2Northampton, MA 01060

Tel: (413) 586-4593Fax: (413) 586-9332

Web: www.farmlandinfo.org

NATIONAL O FFICE1200 18th Street, NW, Suite 800

Washington, DC 20036Tel: (202) 331-7300Fax: (202) 659-8339

Web: www.farmland.org

February 2008

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In most states, APZ is implemented at the countylevel, although towns and townships may alsohave APZ ordinances. Zoning can be modifiedthrough the local political process. Generally, theenactment of an APZ ordinance results in a

reduction of permitted residential densities in thenew zone. This reduction in density, also calleddownzoning, may be controversial because it canreduce the market value of land. A change inzoning that increases permitted residentialdensities is known as upzoning. A change in thezoning designation of an areafrom agriculturalto commercial, for exampleis known as re-zoning. Successful petitions for upzoning andrezoning in agricultural protection zones oftenresult in farmland conversion.

APZ stabilizes the agricultural land base by

keeping large tracts of land relatively free of non-farm development. This can reduce the like-lihood of conflicts between farmers and theirnon-farming neighbors. Communities can useAPZ to conserve a critical mass of agricul-tural land, enough to keep individual farmsfrom becoming isolated islands in a sea of resi-dential neighborhoods. Maintaining a criticalmass of agricultural land can ensure that therewill be enough farms to support local agricul-tural service businesses. By restricting the devel-opment potential of large properties, APZ limits

land speculation and helps keep land affordableto farmers and ranchers. Finally, APZ helps pro-mote orderly growth by preventing sprawl intorural areas, and benefits farmers and non-farmersalike by protecting scenic landscapes and main-taining open space.

CLUSTER ZONING

Cluster zoning ordinances allow or requirehouses to be grouped together on small lots toprotect open land. The portion of the parcel thatis not developed may be restricted by a conser-

vation easement. Cluster developments are alsoknown as cluster subdivisions, open space oropen land subdivisions.

Cluster subdivisions can keep land available foragricultural use, but generally they are notdesigned to support commercial agriculture. Theprotected land is typically owned by developersor homeowners associations. Homeowners mayobject to renting their property to farmers and

ranchers because of the noise, dust and odorsassociated with commercial agricultural produc-tion. Even if the owners are willing to let theland be used for agriculture, undeveloped por-tions of cluster subdivisions may not be large

enough for farmers to operate efficiently, andaccess can also be a problem. For these reasons,cluster zoning has been used more successfullyto preserve open space or to create transitionalareas between farms and residential areas thanto protect farmland.

COMPREHENSIVE PLANNING

Comprehensive planning allows counties, cities,towns and townships to create a vision for theirjoint future. Comprehensive plans, which are alsoknown as master or general plans, outline local

government policies, objectives and decisionguidelines, and serve as blueprints for develop-ment. They typically identify areas targeted for avariety of different land uses, including agricul-ture, forestry, residential, commercial, industrialand recreational activities. Comprehensive plansprovide a rationale for zoning and promote theorderly development of public services.

A comprehensive plan can form the foundationof a local farmland protection strategy by identi-fying areas to be protected for agricultural useand areas where growth will be encouraged. It

may include policies designed to conserve naturalresources and provide affordable housing andadequate public services. Some counties haveused the comprehensive planning process toencourage their cities and towns to develop desig-nated urban growth areas or boundaries (UGBs)and adopt APZ. Others have incorporated theuse of purchase of agricultural conservation ease-ments (PACE) and transfer of development rights(TDR) into their master plans.

CONSERVATION EASEMENTS

Conservation easements are deed restrictionsthat landowners voluntarily place on their landto protect important resources. They are usedby landowners (grantors) to authorize a qual-ified conservation organization or public agency(grantee) to monitor and enforce the restric-tions set forth in the agreement.

Forty-nine states have a law pertaining to con-servation easements. The National Conference

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of Commissioners on Uniform State Lawsadopted the Uniform Conservation Easement Actin 1981. The Act was designed to serve as amodel for state legislation to allow qualifiedpublic agencies and private conservation organi-zations to accept, acquire and hold less-than-fee-simple interests in land for the purposes of conservation and preservation. Since the UniformAct was approved, 23 states have adopted con-servation easement-enabling legislation basedon this model and 26 states have drafted andenacted their own conservation easement-enabling laws.

Agricultural conservation easements are designedto keep land available for agriculture. Grantorsretain the right to use their land for farming,ranching and other purposes that do not interfere

with or reduce agricultural viability. They holdtitle to their properties and may restrict publicaccess, sell, give or transfer their property, asthey desire. Producers also remain eligible forany state or federal farm program for whichthey qualified before entering into the conserva-tion agreement.

Easements may apply to entire parcels of land orto specific parts of a property. Most easementsare permanent; term easements impose restric-tions for a limited number of years. All conser-vation easements legally bind future landowners.

Land protected by conservation easements re-mains on the tax rolls and is privately ownedand managed. While conservation easementslimit development, they do not affect otherprivate property rights.

Agricultural conservation easements are a flexiblefarmland protection tool. Private land trusts andother conservation organizations educate farmersabout the tax benefits of donating easements,and state and local governments have developedprograms to purchase agricultural conservationeasements from landowners. In addition, agricul-

tural conservation easements can be designed toprotect other natural resources, such as wetlandsand wildlife habitat.

EXECUTIVE ORDERS

State executive orders are policy statementsissued by governors to accomplish specific

purposes. They may be advisory or carry the fullforce and effect of law, depending on the state.Governors from at least nine states have issuedexecutive orders directing state agencies to avoidcontributing to the conversion of agricultural

land. These state-level policies mirror the federalFarmland Protection Policy Act (FPPA), whichwas enacted as a subtitle of the 1981 Farm Billto minimize the extent to which Federalprograms contribute to the unnecessary conver-sion of farmland to non-agricultural uses.Some orders identify a lead agency, typicallythe state department of agriculture, to reviewstate agency activities that may result in farm-land conversion. These policies may help headoff condemnation and/or may be used to justifymitigation.

Massachusetts Executive Order 193, forexample, issued in 1991, has been used by theDepartment of Agricultural Resources (DAR)to negotiate mitigation for farmland loss. TheDAR seeks mitigation for projects involvingstate funds and privately funded developmentprojects subject to the states environmentalpermitting process. Mitigation options includepermanently protecting equivalent agriculturalland by granting an agricultural preservationrestriction to the Commonwealth or by makinga financial contribution to its farmland protec-

tion program, a municipality or a qualified con-servation organization.

Other executive orders have created task forces toinvestigate farmland conversion and recommendpossible solutions. For example, Ohios executiveorder created a state-level farmland preservationtask force and ultimately led to the creation of thestates easement acquisition program.

State executive orders have the potential to buildpublic and institutional support for other farm-land protection programs. By restricting the useof state funds for projects that would result inthe loss of agricultural land, executive ordersalso can influence the actions of local govern-ments. To the extent that they call attention tothe problem of farmland conversion and facilitatediscussion about solutions, orders can serve as abuilding block of a comprehensive farmland pro-tection program.

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FARM VIABILITY PROGRAMS

Farm viability programs provide technical assis-tance and, in some cases, small grants toimprove the profitability of farm operations.These programs are administered by departmentsof agriculture, extension and/or nonprofit orga-nizations. Typically, teams of experts work withoperators to evaluate the current operation anddevelop individualized plans. Funds may also beavailable to implement practices or undertakecapital projects identified in the planningprocess. Some of the programs include farmlandprotection and resource conservation compo-nents. The Massachusetts Farm ViabilityEnhancement program, for example, awardsimplementation grants in exchange for termeasements. All viability programs assume that

changes at the farm levelbe it better manage-ment of existing resources or a new direction inmarketing and/or products offeredcan lead toenhanced farm profitability.

The first two agricultural viability programswere developed in Massachusetts and Minnesotain the mid 1990s. Subsequent programs havebeen adopted by Connecticut, Maine, New

Jersey, New York and Vermont. In the 2002Farm Bill, a federal Farm Viability Program wascreated, authorizing the Secretary of Agricultureto provide grants to eligible entities withapproved farm viability programs. The federalprogram has not yet been implemented.

GROWTH MANAGEMENT LAWS

Growth management laws are designed to con-trol the timing and phasing of urban growthand to determine the types of land use that willbe permitted at the local and regional levels. Atleast 12 states have laws that control develop-ment or set planning standards for local govern-ments. Of these, several address the issue of farmland conversion.

Growth management laws take a comprehensiveapproach to regulating the pattern and rate of development and set policies to ensure that mostnew construction is concentrated within UGBs.They direct local governments to identify landswith high resource value and protect them fromdevelopment. Some growth management laws

require that public services such as water andsewer lines, roads and schools be in place beforenew development is approved. Others directlocal governments to make decisions in accor-dance with comprehensive plans that are consis-

tent with plans for adjoining areas.Oregon has one of the nations strongest growthmanagement laws. As a result of the states 1972Land Conservation and Development Act, everycounty in Oregon has implemented agriculturalprotection zoning, protecting more than 16 mil-lion acres of agricultural land. WashingtonsGrowth Management Act (GMA), passed in1990 and strengthened in 1991, also is provingto be an effective farmland protection tool. Sincethe enactment of the GMA, most of Washingtonscounties have developed inventories of important

agricultural land, and several have adopted agri-cultural protection zoning and/or created pur-chase of agricultural conservation easement andtransfer of development rights programs.Growth management laws in Hawaii, Vermont,New Jersey and Maryland have been somewhatless effective in preventing farmland conversionand promoting the development of local farm-land protection programs.

MITIGATION lawS AND POLICIES

Farmland mitigation laws and policies attempt tocompensate for the conversion of agriculturalland to another use by requiring permanentprotection of comparable agricultural land. In1995, city officials in Davis, Calif., enacted anordinance that requires developers to perma-nently protect one acre of farmland for everyacre of agricultural land they convert to otheruses. Developers can place an agricultural conser-vation easement on farmland in another part of the city or pay a fee in lieu of direct protection.

King County, Wash., has a no net loss of farm-land policy in its comprehensive plan. Thepolicy prohibits the conversion of land subject toAPZ unless an equal amount of agricultural landof the same or better quality is added to thecountys agricultural production zones.

In 2004, Connecticut lawmakers adopted PublicAct No. 04-222, which requires municipalities,towns, cities, boroughs and districts to mitigate

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the loss of active agricultural land taken byeminent domain. Local governments may eitherpurchase an agricultural conservation easementon comparable land within its jurisdiction ORpay a mitigation fee to the states farmland pro-

tection program to protect similar land elsewherein the state subject to the approval of the statesfarmland preservation program and theCommissioner of Agriculture.

PURCHASE OF AGRICULTURALCONSERVATION EASEMENTPROGRAMS (PACE)

Purchase of agricultural conservation easementprograms pay farmers to protect their land fromdevelopment. PACE is known by a variety of other terms, the most common being purchase

of development rights (PDR).Landowners voluntarily sell agricultural conser-vation easements to a government agency orprivate conservation organization. The agency ororganization usually pays them the differencebetween the value of the land for agriculture andthe value of the land for its highest and bestuse, which is generally residential or commer-cial development.

Easement value is most often determined by pro-fessional appraisals, but may also be establishedthrough the use of a numerical scoring systemthat evaluates the suitability for agriculture of apiece of property. Twenty-seven states haveauthorized state-level PACE programs and inde-pendent local programs operate in 18 states.

State and local governments can play a variety of roles in the creation and implementation of PACEprograms. Some states have passed legislationthat allows local governments to create PACEprograms. Others have enacted PACE programsthat are implemented, funded and administeredby state agencies. Several states work coopera-tively with local governments to purchase ease-ments. A few states have appropriated moneyfor use by local governments and private non-profit organizations. Finally, some local govern-ments have created independent PACE programsin the absence of any state action.

Cooperative statelocal PACE programs havesome advantages over independent state or local

programs. Cooperative programs allow states toset broad policies and criteria for protectingagricultural land, while county or township gov-ernments select the farms that they believe aremost critical to the viability of local agricultural

economies and monitor the land once the ease-ments are in place. Involving two levels of government generally increases the fundingavailable for PACE. Finally, cooperative pro-grams increase local government investment infarmland protection.

PACE programs allow farmers to cash in a fairpercentage of the equity in their land, thus cre-ating a financially competitive alternative toselling land for non-agricultural uses. Permanenteasements prevent development that wouldeffectively foreclose the possibility of farming.

Removing the development potential from farm-land generally reduces its future market value.This may help facilitate farm transfer to thechildren of farmers and make the land moreaffordable to beginning farmers and others whowant to buy it for agricultural purposes. PACEprovides landowners with liquid capital that canenhance the economic viability of individualfarming operations and help perpetuate familytenure on the land. Finally, PACE gives commu-nities a way to share the costs of protectingagricultural land with farmers.

RIGHT-TO-FARM LAWS

Every state in the nation has at least one right-to-farm law. State right-to-farm laws areintended to protect farmers and ranchers fromnuisance lawsuits. Some statutes protect farmsand ranches from lawsuits filed by neighborswho moved in after the agricultural operationwas established. Others protect farmers who usegenerally accepted agricultural and managementpractices and comply with federal and statelaws. Many right-to-farm laws also prohibitlocal governments from enacting ordinancesthat would impose unreasonable restrictions onagriculture.

State right-to-farm laws are a state policy asser-tion that commercial agriculture is an importantactivity. The statutes also help support the eco-nomic viability of farming by discouraging


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neighbors from filing lawsuits against agricul-tural operations. Beyond these protections, it isunclear whether right-to-farm laws help main-tain the land base.

At the same time, local governments around thenation are enacting their own right-to-farm lawsto strengthen and clarify language in state laws.Local activity has been encouraged by modellocal ordinances developed by state agricultureagencies (e.g., New Jerseys State AgricultureDevelopment Committee) and/or farm advocacygroups (e.g., California Farm Bureau).

Local right-to-farm ordinances can serve as aformal policy statement that agriculture is avaluable part of the county or town economyand culture. Some require that a notice beplaced on the deed to all properties in agricul-tural areas, cautioning potential buyers thatthey may experience noise, dust, odors andother inconveniences due to farming and ranch-ing operations. At a minimum, local ordinanceshelp educate residents about the needs of com-mercial agriculture and reassure farmers thattheir communities support them.

TAX RELIEF

Circuit Breaker Tax Relief Credits

Circuit breaker tax programs offer tax credits to

offset farmers property tax bills. Four stateshave circuit breaker programs. In Michigan,Wisconsin and New York, farmers may receivestate income tax credits based on the amount of their real property tax bill and their income. InIowa, farmers receive school tax credits fromtheir local governments when school taxesexceed a statutory limit. The counties andmunicipalities are then reimbursed from a statefund. In Michigan, landowners who wish toreceive circuit breaker credits must sign 10-yearrestrictive agreements with their local govern-

ments to prevent farmland conversion. InWisconsin, counties and towns must adopt plansand enact agricultural protection zoning toensure that tax credits are targeted to productiveagricultural land.

Like differential assessment laws, circuit breakertax relief credits reduce the amount farmers arerequired to pay in taxes. The key differencesbetween the programs are that most circuit

breaker programs are based on farmer incomeand are funded by state governments.

Differential Assessment

Differential assessment laws direct local govern-ments to assess agricultural land at its value foragriculture, instead of its full fair market value,which is generally higher. Differential assessmentlaws are enacted by states and implemented atthe local level. With a few exceptions, the cost isborne at the local level.

Differential assessment programs help ensure theeconomic viability of agriculture. Since hightaxes reduce profits, and lack of profitability is amajor motivation for farmers to sell land fordevelopment, differential assessment laws alsoprotect the land base. Finally, these laws help

correct inequities in the property tax system.Owners of farmland demand fewer local publicservices than residential landowners, but they paya disproportionately high share of local propertytaxes. Differential assessment helps bring farm-ers property taxes in line with what it actuallycosts local governments to provide services tothe land.

Every state except Michigan has a differentialassessment law. Differential assessment is alsoknown as current use assessment, current usevaluation, farm use valuation, use assessment

and use value assessment.

TRANSFER OF DEVELOPMENTRIGHTS (TDR)

Transfer of development rights programs allowlandowners to transfer the right to develop oneparcel of land to a different parcel of land.Generally established through local zoning ordi-nances, TDR programs can protect farmlandby shifting development from agricultural areasto areas planned for growth. When the develop-ment rights are transferred from a piece of property, the land is typically restricted with apermanent agricultural conservation easement.Buying development rights generally allowslandowners to build at a higher density thanordinarily permitted by the base zoning in desig-nated receiving areas. TDR is known as transferof development credits in California and in someparts of New Jersey.

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For additional information o

farmland protection and steward

contact the Farmland Informat

Center. The FIC offers a staff

answer service, online library

program monitoring, fact she

and other educational materia

www.farmlandinfo.org

(800) 370-4879

TDR is used by counties, cities, towns andtownships. Two regional TDR programs weredeveloped to protect the pine barrens of LongIsland, N.Y., and New Jerseys Pinelands. TDRprograms are distinct from PACE programs

because they involve the private market. ManyTDR transactions are between private landownersand developers. Local governments approvetransactions and monitor easements. A fewjurisdictions have created TDR banks thatbuy development rights with public funds andsell them to developers and other privatelandowners.

Some states have enacted special legislationauthorizing local governments to create TDRprograms. In 2004 the New Jersey Legislatureenacted the State Transfer of Development

Rights Act. The State TDR Act enables muni-cipalities to develop and participate in intra-municipal and inter-municipal programs. Thislaw also formalized the planning process re-quired to enact TDR and mandated a list of planning documents required prior to adopting aTDR ordinance. The Act also authorized theState TDR Bank Board to provide planninggrants to communities developing programs.

Other states have consistently refused to givelocal governments such authorization. Countiesand towns have created TDR programs withoutspecific state authorizing legislation; municipalgovernments must work with their attorneys todetermine whether other provisions of state lawallow them to use TDR.

TDR programs are designed to accomplishthe same purposes as publicly funded PACEprograms. They prevent non-agricultural devel-opment of farmland, reduce the market value of protected farms and provide farmland owners

with liquid capital that can be used to enhancefarm viability.

TDR programs also offer a potential solution tothe political and legal problems that many com-munities face when they try to restrict develop-ment of farmland. Landowners often opposeagricultural protection zoning and other land useregulations because they can reduce equity. APZcan benefit farmers by preventing urbanization,but it may also reduce the fair market value of their land. When more restrictive land use regu-lations are enacted in conjunction with a TDR

program, communities can maintain equity forlandowners. For example, development rightsfor transfer may be allocated based on theunderlying or prior zoning.

While dozens of local jurisdictions around thecountry allow the use of TDR, only a few of them have used the technique successfully toprotect farmland. TDR programs are complexand must be carefully designed to achieve theirgoal. Communities that have been most success-ful in using TDR are characterized by steadygrowth, with the political will to maintain andimplement strong zoning ordinances and plan-ning departments that have the time, knowledgeand resources to administer complex land useregulations.

American Farmland Trust works to stop the loss of productive farmlandand to promote farming practices that lead to a healthy environment.


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Agricultural Conservation Circuit Differential PACE Right-to-Farm* TDRState Districts Easements Breaker Assessment

Alabama Alaska

Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas

Kentucky

Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey

New Mexico

New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah

Vermont

Virginia Washington West Virginia Wisconsin Wyoming

TOTAL 16 49 4 49 32 50 24

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FARMLAND PROTECTION ACTIVITY BY STATE

State level

Local level

* A number of local jurisdictions also have enacted right-to-farm ordinances. We do not have a complete inventory.

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