To spend or not to spend? That’s the question surrounding the issue of North Carolina’s supposedly diminishing farmland. As with many land conservation programs, spending appears to be the answer.
Conservation groups will lobby the state next year for funding to preserve farmland. The nonprofit Land for Tomorrow, which describes itself as a “growing partnership of North Carolina organizations and citizens committed to advocating for state funding to protect places that matter to our citizens and communities,” recommends that the state increase spending for conservation projects by $200 million next year, $22 million of which would go toward the preservation of farmland.
Land for Tomorrow would like to see that $22 million guaranteed for five years, for a total of $110 million. That’s still not enough, said Kate Dixon, director of Land for Tomorrow. Any money the state puts up would hopefully be matched by the federal government.
“The challenge has been not having sufficient funding,” Dixon said. “The federal government has had funding, but that requires a match and then the challenge is where does that match come from?”
The major component behind farmland preservation is the purchase of development rights. Under a development rights program, which is voluntary, land trusts or other agencies linked to local government, make an offer to a landowner to buy the development rights on the parcel. Ownership of land has a bundle of rights associated with that piece of land. These rights include the right to possess, use, modify develop, lease, or sell the land
The right to develop a piece of land for residential, commercial, or industrial purposes is also a right within that bundle. The purchase of development rights involves the sale of that right while leaving all the remaining rights as before.
Once an agreement is made, a permanent deed restriction is placed on the property, which restricts the type of activities that may take place on the land in perpetuity. A fact sheet issued by the American Farmland Trust states that “most agricultural conservation easements are permanent. Most do not restrict farming practices, although some grantees ask landowners to implement soil and water conservation plans.”
Naturally, the current agricultural value associated with land is substantially lower than the value that land has for development. Farmers are offered what is described as “fair market value,” which basically splits the difference between a parcel’s value as a farm and its value as a commercial or residential development.
So where does the funding come from to leverage the federal money? You guessed it: taxpayers. Different areas around the country have come up with different ways to fund development rights programs. Virginia Beach, dedicated a cellular phone tax, a 1.5 percent increase in local property taxes, and some county appropriations for development rights. Several counties in Maryland use local real-estate transfer taxes supplemented by general fund appropriations.
Ironically, a major argument among advocates of development rights programs is they can help give farmers a tax break, especially on estate taxes by keeping the value of the land lower.
Though Dixon thinks preservation of farmland is a nonpartisan issue, she admits it will be tough to find funding in a tight state budget.
“We’ll see next year, but obviously, as you know, the state budget is pretty tight,” she said. “In terms of the interest in the purpose and the importance of this for the future of this state, there’s pretty broad interest in the legislature. But as you know, there are a lot of needs in the state. It really isn’t a partisan thing. I think people really see this as important for the environment and that we have a lot of industries that are really dependent on particular types of land and the quality of life that comes from clean air and clean water and places to go. Our tourism industry is really based on the beauty of our state.”
N.C. Department of Agriculture officials not only support development rights programs, but think more action is needed to help save farmland. In March, the department released its Agricultural Development and Farmland Preservation Strategy. The report cited federal statistics that showed 43 North Carolina counties with a decrease in the number of farms, 41 with a decrease in the amount of farmland and decrease in total cropland in 55 counties.
“Future opportunities for advancement in all the state’s efforts may be better served with a reassessment of funding priorities and the allocation of resources to the protection and promotion of the family farm,” the report reads. “Strategy plans and policy changes alone cannot sustain the family farm. Appropriating monies simply to acquire development rights or conservation easements on existing farms will not provide the support that families need to save the lands this state needs in the future…”
The best way to implement this strategy would be through land conservation agencies, said Jim Cummings, the department’s environmental program manager.
“Of course, we would hope to contract with some of those land trusts and the soils and water conservation districts around the state to work with farmers to purchase development rights and conservation easements,” Cummings said. “In my conversations with the commissioner, he’s had no interest in building another bureaucracy but to work through existing agencies and organizations.”
While this all may fine and good, the question is whether development rights programs are politically feasible. Maybe not, according to a report on development rigghts programs in South Carolina by Clemson University professor Vern House.
“Research findings indicate that public willingness to pay often falls short of the value of development rights,” House writes. “These findings simulate economic behavior, whereas the PDR program will be determined by politics. The debate is likely to focus on the amount of funding to buy development rights, the criteria for targeting funds and whether a bidding process will be used.”
Wendell Cox, principal of Demographia, an international public policy firm in St. Louis, is skeptical of the need to provide public funding to preserve farmland. The reason is simple: The United States is not running out of farmland.
“This deal where we’re basically saying that the cities are chewing up the farmland — not a chance,” Cox said. The amount of farmland in this country is huge compared to the amount of development. There simply is no threat.”
Cox is also concerned about the possible long-term effects of such land conservation programs.
“As we continue to take land off the rolls for development, we are going to be driving the price of land up, which will make home ownership harder,” he said.
Sam Hieb is a contributing editor of Carolina Journal.