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Disappearing Farmland: Little Protection Exists For Midwest Farmland
America has lost millions of acres of farmland over three decades to urban and rural development.
By Midwest Center for Investigative Reporting
9/25/2018
Christopher Walljasper
America has lost millions of acres of farmland over three decades to urban and rural development.
Despite conservation efforts by state and local governments and increased financial incentives for farmers, urban development and the expansion of rural residential real estate over the last 25 years has eliminated farmland across the country at levels not seen since the early 1970s.
Since 1992, nearly 31 million acres of farmland have been developed for residential use around urban centers and rural communities, according American Farmland Trust’s latest report, “Farms Under Threat.”
And as residential development mingles with agricultural production on the outskirts of major metropolitan areas, the tension between the two increases. Recent clashes include lawsuits in North Carolina over odor and disease from Smithfield hog operations and new research on pesticide drift affecting schools and adjacent homes.
MIDWEST LAGGING ON PRESERVATION
In Kane County, Ill., leaders saw the threat and made a commitment to keep half the county’s land dedicated to agricultural use and open spaces.
But that’s a rarity in the Midwest and in Illinois, a state that has lost more than 735,000 acres since 1997.
While nearly 100 counties and municipalities across the country have implemented some form of farmland protection policies, less than a dozen of them are in the Midwest.
In Kane County, the solution was to offer farmers the opportunity to sell the development rights of their land to the county, using something called a conservation easement. Easements ensure the land stay in agricultural production, in perpetuity.
“We were trying to create some balance in terms of what gets developed and where,” said Janice Hill, Farmland Protection Manager for Kane County. While the county was facing development around both suburbs and rural communities, the county didn’t distinguish between the two. “It’s just the pattern of development, because large lot estate zoning is, in some ways, the worst development for ag soils.”
SOME CONSERVATION EFFORTS WORKING
From 1976 to 2016, more than 23,500 parcels of land have been acquired through conservation easement programs at the municipality, county or state level, totaling more than 3.6 million acres of farmland protected nationwide.
Most of these programs are on the east coast, with only Michigan, Ohio and Wisconsin offering state-level easement programs in the Midwest.
Most programs are funded through taxes, bonds or appropriation spending, though Kane County primarily funds its easement program through gaming revenues. More than $5.7 billion has been paid to farmers through easement programs at the state and local levels in the last 40 years, according to the Farmland Information Center.
Map: State easement spending. The darker states have spent more at the municipal, county and state levels to protect farmland through easements. Click on the states to see specific figures.
One of the biggest concerns about conservation easement plans is that they are permanent. But Hill said that’s also the appeal for farmers concerned about the legacy of their land.
Read More: Database: Disappearing Farmland
“At any point in time you have to think about policies that are going to work over a 50-year period or a 100-year period, not just what the market is interested in,” said Hill. “If the land becomes a forever farm, as some of our families say, that really gives a lot of peace of mind, especially the families that have their land for generations and pass it down through generations. They truly feel a calling to keep their land in agriculture.”
But there are barriers to conservation easements. Hill said one reason more counties in the Midwest haven’t started programs is that it takes a significant financial investment to start a program. While Kane County easements are primarily funded through gaming revenue, planners are looking at other funding sources, including fees from urban development within the county.
Another reason the Midwest has so few county protection plans is that the threat is still too intangible. Much of the Midwest is still flush with agricultural land.
PREFERENTIAL TAXATION
A more widely adopted method of incentivizing landowners to keep land in agriculture has been preferential taxation, where taxes are paid based on the land’s value in farming, instead of its market value.
“You might have an acre of land that, in a developed use, would be worth $10,000, but only pays its property tax on $800,” said Lori Lynch, professor of agricultural and resource economics at the University of Maryland.
She said tax incentives have gone a long way to slow down farmland development in the Northeast. Unlike conservation easements, preferential taxation doesn’t lock the land into farming forever. When land is no longer used for agriculture, a conversion tax is paid.
“The county or the state has been getting a lower tax revenue from this land for quite some time,” Lynch said. “This is a way for the county and state to recoup some of that benefit that the landowner received.”
More than easements or preferential taxation, the 2008 recession significantly slowed the development of farmland. But Hill said farmers still wanted to protect the legacy of their land.
“Even when the development pressures slowed down due to the recession, we still had a strong interest in the program. So to me that says that it's not just about the context of the surrounding land pressure for development,” Hill said. “It's also about true conservation principles and protecting the family farm.”
WHO BENEFITS FROM FARMLAND PROTECTION?
Clearly, farmers and ranchers benefit from easements and tax breaks for agricultural land use. But Paul Gottlieb, associate professor of agricultural, food and resource economics at Rutgers University, points out that it’s not the farmers leading the charge for farmland protection.
“Urban and suburban residents in relatively affluent areas have been driving this movement,” Gottlieb said. “Not only driving it but putting up money to pay for the purchase of farmland and for the purchase of development rights.”
Gottlieb said for urban and suburban residents, farmland and open spaces are an amenity. Beyond crop production, farmland provides protection against congestion, traffic, cultural grounding and access to local food. But those benefits to a community aren’t factored into the price of land, which may be why taxation and conservation efforts exist, according to Lynch.
“Those desires are not represented in the market,” she said. “To some extent, that's why the government did come in and set up some of these programs.”
NEW APPROACHES TO THE SUBURBAN/RURAL DEBATE
Kane County continues to evolve its strategy around farmland protection. Realizing that permanently committing land to agriculture may not be realistic for every parcel, planners have created a temporary, or “term” easement, where a landowner with smaller acreage could promise agricultural productivity for 10 to 15 years.
Hill said these short-term plans are ideal for fruit and vegetable producers who operate on smaller farms than traditional row crop farmers. This dovetails with Kane County’s efforts to combat obesity and health problems through a strategy to bring fresh fruit and vegetables to area schools and hospitals.
“I think that also allowing for these term easements to support vegetable farms of any size and other farms that support food for human consumption, that really brings it home for the consumer when they understand that their food could be in the path of development,” Hill said.
Hill said the county has even opened up some of its public land for animal grazing, realizing that preserves and parks may have better use than simply large swaths of grass. She said municipalities should be asking themselves, “Is our land suited for something better than sod? Should we think about leasing it to a small farmer?”
The private market is also looking at blending agriculture into the suburban landscape. In northern Kane County, Serosun Farms is a new housing development that is integrating agriculture into the community, much like parks or a golf course might be woven through a traditionally developed subdivision.
John DeWald is the developer heading up the project, which is more than 400 acres. He said 70 percent of Serosun will remain in agricultural use, including public barns, farmers markets and community farm plots. The area will also include orchards, test plots and conservation woodlands and wetlands.
Communities that mix agriculture and residential development in this way have been around since the 90s but began taking off when the recession pushed developers toward more intentional development. DeWald said researchers have identified more than 100 of what are being dubbed “agrihoods.”
“There are different kinds of farm and food elements to these developments,” DeWald said. “Some of them are more occasional gardens. There’s a participation element to them. It’s a gathering place. Others are large enough and functional enough that they can serve the community to some extent. The intent here at Serosun over the long haul is to build up a much bigger farming and food operation that serves well beyond the borders of the community.”
Serosun is focusing more on integrating fruit and vegetable farming, not large-scale commodity crops or confined animal feed operations.
“It’s something that’s fantastic for people who want their kids or grandkids exposed to farming but still live in a modern suburban home,” Hill said.
DeWald said even though Serosun is residential development of farmland, he is working with Kane County to meet conservation goals as he builds out the residential aspects of the community. But he warns that all “agrihoods” may not be dedicated to responsible development of agricultural land.
“The concern is that developers will use this as a way to get concessions to redevelop agricultural land. They put an acre garden in there and ‘Whoo! We’re an agrihood!’ ” DeWald said. He said while there’s no specific ratio of farmland to development needed to call a development an “agrihood,” it’s a matter of intention. “One of the focuses is preserving agricultural land.”
A LACK OF URGENCY, A LOT AT STAKE
Whether the issue of land development is a far-off concern or knocking on the door, Gottlieb said he appreciates AFT’s focus on the issue.
“I'm all about prudence in acting early to forestall problems associated with the depletion of natural resources,” Gottlieb said.
But without a sense of urgency, it can be hard for the issue to get the attention of lawmakers, or even advocates of the agriculture industry.
“We’ve had so many variables and challenges and threats in agriculture. You’ve got subsidies, you’ve got pests, diseases, markets, international trade. The list goes on and on. It’s a litany of challenges,” said Ann Sorenson, director of research for American Farmland Trust. But she said it all starts with the land. “You're not going to have farming, you're not going to have ranching unless you have the land base.”
This story is the second in a two-part series about farmland loss. To read more about the problem of farmland loss, read Small-Towns Trade Farmland for Residential Development.
Written by Christopher Walljasper for the Midwest Center for Investigative Reporting. The Midwest Center for Investigative Reporting is a nonprofit, online newsroom offering investigative and enterprise coverage of agribusiness, Big Ag and related issues through data analysis, visualizations, in-depth reports and interactive web tools. Visit us online at www.investigatemidwest.org
Read more about Farmland
Ninety-Nine Percent of America’s Farms Are Family-Owned. But Only Half Are Family-Farmed.
As land is passed on to kids and grandkids, millions of acres across the country end up being owned by people who are no longer farmers, and increasingly, never were.
The photograph above was taken on an Iowa family farm. The farmhouse has since been replaced and the land sold. Flickr / Don Graham
Ninety-Nine Percent of America’s Farms Are Family-Owned. But Only Half Are Family-Farmed.
As land is passed on to kids and grandkids, millions of acres across the country end up being owned by people who are no longer farmers, and increasingly, never were.
May 24th, 2018
by Beth Hoffman
“My parents were farmers, both of my grandparents were farmers. Probably as far back as ever we were farmers,” says 77-year-old Shirley Gray. We are sitting in the wood-paneled dining room of her family’s farm in south-central Iowa. “My husband’s parents were farmers, his grandparents were farmers. So we have always been farmers.”
Always, that is, until 2009, when Gray and her late husband decided they would stop farming and rent out their land instead. Gray’s kids and grandkids had all moved away from the farm and taken jobs in cities and towns throughout the region, ending the family’s 156-year farming tradition.
“The way it is set up, it will just keep right on being rented out,” Gray tells me when I ask what will happen to the farm when she is no longer alive to make decisions about it. “But we will keep the farm in the family, hopefully.”
Beth Hoffman
Most American farmland will be passed on to the next generation via wills, trusts, or sale to other family members, much as Shirley Gray’s farm is set up
Today, 99 percent of American farms are still “family farms” owned by families, according to the United States Department of Agriculture (USDA). But like Shirley Gray’s, increasingly, many of them are not actually family-farmed.
Roughly 355 million acres nationally—almost 40 percent of all farmland—are rented out by non-farming landlords to other farm operators. In Iowa, that number is much higher. More than half of all farmland in the state is farmed by renters, generating rental revenue of $3.7 billion (the second-highest rental revenue in the country, after Illinois).
And although more than 60 percent of America’s farmland is owned by people aged 65 and older, most of this farmland is not expected to come up for sale when owners die. In fact, only about 2 percent of farmland in the country will be sold to people other than family members in the coming years. Instead, most land will be passed on to the next generation via wills, trusts, or sale to other family members, much like the way Shirley Gray’s farm is set up. In other words, it will be kept in and owned by the family—even if the family never farms it.
The double whammy
Part of what is driving this trend in the Midwest and around the nation, is the exorbitant cost of both land and machinery. One piece of new farm equipment—a John Deere combine for harvesting corn, for example—can cost as much as $500,000. Even if farmers buy only good quality used equipment, they are still looking at an estimated initial investment of at least $600,000 to get started.
In Iowa, as in much of the country, land is equally unaffordable. With the average price topping $7,000 an acre, a 300-acre farm in the state is worth a hefty $2.1 million. (The average size of an Iowa farm is 330 acres.) That’s an investment not easily borne by a new farmer, especially since the price of corn and soybeans has essentially flatlined for the last five years.
“A quarter of the land in Iowa is owned by the same owner for the last 40 years; half has been owned for over 20 years. So owners are after long-term returns.”
But most Iowa landowners are not new. “You don’t own land for one or three years,” says Wendong Zhang, an extension economist at Iowa State University (ISU). “A quarter of the land in Iowa is owned by the same owner for the last 40 years; half has been owned for over 20 years. So owners are after long-term returns.”
This pattern of long-term ownership means not only that there is very little land available for sale in Iowa (which drives prices even higher), but also that most of the state’s farmland was purchased back when that land was far less expensive. Shirley Gray and her husband bought their farm in 1958 for $55 an acre, which made the total cost for their 500 acres $27,500—the equivalent of about $238,000 today. That same land in 2018 costs around $4000 an acre, or more than $2 million for a farm similar in size to the one the Grays purchased 60 years ago.
And here’s one other result of the long-term land ownership trend: As much as 80 percent of the land in Iowa is owned free and clear of debt. So as long as the rent pays the taxes, retired farmers and their families can make money on their land even if no one in the family is farming.
When city folk own the farm
As land is passed on to kids and grandkids, millions of acres across the country end up being owned by people who are no longer farmers, and increasingly, never were. Currently, 40 percent of all rented farmland in Iowa is owned by people who have never farmed, and in more and more cases have never lived on the land they now own.
Beth Hoffman
If the only purpose of land ownership is to provide income for both parties, then the level of toxicity from chemicals sprayed, the health of the ecosystem as a whole, and the lasting fertility of the soil become far less important
“I’ve seen an increase in 50- and 60-year-olds who are inheriting the farm from the farmers who have passed away in their 70s and 80s,” says David Baker, a farm transition specialist with ISU’s Beginning Farmer Center. “They have been off the farm for the last 30 or 40 years while their parents farmed. They are now inheriting these farms and need to decide what to do with it.”
But deciding to rent the land out may have its drawbacks. As any of us who’ve rented an apartment or a car will attest, renters don’t often treat things with as much care as they would if they were the actual owner. The same could arguably be said about landowners, who are sometimes less attentive to the land because they are not actually on it. If the only purpose of land ownership is to provide income for both parties, then the level of toxicity from chemicals sprayed, the health of the ecosystem as a whole, and the lasting fertility of the soil become far less important.
“When you have farm owners looking for the top dollar for rental, that often will come at a cost,” says Ann M. Johanns, an extension program specialist at ISU. “That cost might be the long-term conservation or long-term productivity of that land because the tenant is paying the highest dollar. They might not take care of it as if it were their own. They might not put nutrients back into the soil like they should, and so they leave that land worse than they found it.”
How a potential tenant plans to take care of the land is an essential question for owners in search of renters.
Baker agrees. “Those looking for the highest price in cash rent for their farms will search for those who will pay the highest price, regardless of what they will do to the farm,” he says. “And once you sign a lease, you have given up control of that farm to that tenant. Unless you have stipulations in that lease requiring him to farm it in a certain way, you’ve in effect said, ‘I’ve got my $250-an-acre cash rent, it is in the bank, I’m good. Do what you want to with the farm.’”
A new kind of landowner?
But increasingly, says Baker, he is fielding calls from a new kind of landowner—many of whom have college degrees and have lived in cities for years—who remember how their grandparents took care of the land and are interested in bringing ecological values with them to their farm ownership.
“I get calls every day asking questions,” Baker says. “’How do I take care of the farm?’ ‘How do I make improvements to the land, to the water?’” I want them to maximize the income they can receive but also to share some of values that the community has. What does it mean to the state of Iowa instead of just thinking about it as investment.”
How a potential tenant plans to take care of the land is an essential question for owners in search of renters. A 2012 survey on farmland ownership conducted by ISU found that 93 percent of landowners said “good land stewardship” was by far the most important tenant attribute, well above knowing the farmer (52 percent) or even renting to a family member (25 percent).
Long-term ownership not only means there is very little land available for sale in Iowa but also that most of the state’s farmland was purchased back when that land was far less expensive. Pictured above: Knoxville, Iowa | Beth Hoffman
Additionally, farmland owned solely by a woman—sometimes the result of land inherited after a spouse has died—now accounts for a quarter of all farms. And while many of them have never had to make farm decisions alone, they have a “strong conservation ethic,” says the Women’s Food and Agriculture Network, adding that female landowners often struggle to find advisors and tenants whose business plans align with their ecological values.
Baker says this increasing interest in doing things differently has resulted in more requests for information about niche markets—like organic. “There is a strong effort in the 40-50 age groups saying, ‘We own this small farm and we want to know what to do with it. We’ve heard of others raising local products and we want to get involved in that.’” Baker also works with many hopeful beginning farmers who are looking to pursue small-scale production or retail agriculture on their land.
Opportunity Abounds
In Iowa, there’s something of an untapped opportunity to be found in matching new landowners with new farmers—both for conventional farmers and those interested in growing crops outside of the corn and soybean norm. Because land rental is so much more affordable than owning land outright, renting gives those who are new to the trade the ability to make money farming without diving deeply into debt.
“A lot of rental agreements include more than just farming the land.”
Landowners can also encourage “good stewardship” on their land by allowing multi-year leases, which better guarantee that the time and money tenants invest in a farm—to transition to organic or even to use cover crops—is worth it. Not charging top dollar can also take the pressure off farmers to make as much money as possible and can encourage them not to grow “fence row to fence row,” ensuring the sustainability of the farm over the long term. (Proposed cuts to the Conservation Reserve Program, or CRP, that were included in the most recent iteration of the farm bill—which the House voted down last week—would have threatened the ability of both tenants and landlords to put aside land susceptible to erosion or other environmental degradation.)
The particular type of lease a renter and owner agree on can also have a big impact on farm sustainability and the overall economic viability of farming for tenants. While “cash rent” leases can mean even more debt for farmers if crops fail in the case of bad weather or disease, “flexible leases” allow tenants and landowners to share in the costs and profits of the farm, mitigating risk for both. With flexible leases, farm payments like insurance and other government programs are also split between tenants and landlords.
But new tenants also need to understand that taking the time to build a relationship with the landowner is an important part of leasing a farm.
“A lot of rental agreements include more than just farming the land,” says Johanns. “There is a relationship between the tenant and landowner where a tenant may be taking care of scooping the driveway, for example. Stopping in and discussing what is happening on the farm, and having coffee. Little things you can’t put a dollar value on.”
In other words, human stewardship is every bit as important to a successful tenant-landowner relationship as land stewardship is.
Beth Hoffman has reported on food and agriculture for more than twenty years, airing on NPR, The World, Latino USA, Living on Earth in addition to writing for many publications. She has a Masters from UC Berkeley's School of Journalism and has completed several documentary projects, including a year cooking with immigrant women in their homes and telling their stories. She also spends summers on her husband's family farm in Iowa and currently is an Assistant Professor in Media Studies at the University of San Francisco.