PB86-218 351
v>EPA
United States
Environmental Protection
Agency
Region 5
230 South Dearborn Street
Chicago, Illinois 60604
September 1 984
Water Division
Agricultural Land
Preservation
In Region 5
905R84105
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REPORT ON AGRICULTURAL LAND
PRESERVATION IN REGION V
U. S. Environmental Protection Agency
230 South Dearborn Street
Chicago, Illinois 60604
U.S. Environmental Protection Agency
Region V, U:v..;; /
230 South Du:,, ;;-;:n >:..:,,.:
Chicago, Illinois 60304
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U-S. Environment:! r ' l'-n Agency
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TABLE OF CONTENTS
TABLE OF CONTENTS i
LIST OF FIGURES Ill
LIST OF TABLES Ill
1.0. INTRODUCTION 1-1
2.0. BASIC METHODS OF AGRICULTURAL LAND PRESERVATION 2-1
2.1. Causes of Agricultural Land Conversion 2-1
2.1.1. Economic Factors 2-1
2.1.2. Nuisance Factors 2-2
2.1.3. Taking for Public Use 2-3
2.2. Methods of Farmland Protection 2-3
2.2.1. Indirect Methods 2-3
2.2.1.1. Tax Relief 2-4
2.2.1.2. Agricultural Districts 2-6
2.2.1.3. Right-To-Farm Legislation 2-8
2.2.2. Direct Methods 2-8
2.2.2.1. Agricultural Zoning 2-9
2.2.2.2. Purchase of Development Rights .... 2-15
2.2.2.3. Transfer of Development Rights .... 2-17
2.2.3. Integrated Programs 2-18
2.3. Current Use of Agricultural Land Preservation Methods . . 2-18
3.0. OVERVIEW OF FEDERAL POLICIES AND REGULATIONS 3-1
3.1. Federal Regulations 3-1
3.1.1. Farmland Protection Policy Act 3-1
3.1.2. National Environmental Policy Act 3-4
3.2. Federal Policies, Authorities, and Legislative Background 3-4
3.2.1. Council on Environmental Quality Memo, Aug. 30,
1976 3-4
3.2.2. Council on Environmental Quality Memo, Aug. 11,
1980 3-5
3.2.3. US Department of Agriculture Secretary's
Memorandum, June 21, 1976 3-5
3.2.4. US Department of Agriculture Secretary's
Memorandum No. 9500-3, March 22, 1983 3-6
3.2.5. US Environmental Protection Agency - USEPA
Policy to Protect Environmentally Significant
Agricultural Lands, Sept. 8, 1978 3-6
3.2.6. USEPA Implementation of Procedures on the National
Environmental Policy Act 3-8
4.0. STATE AGRICULTURAL LAND PRESERVATION POLICIES AND REGULATIONS
IN REGION V 4-1
4.1. Illionis 4-1
4.1.1. Tax Incentives 4-1
4.1.2. Executive Order and Farmland Preservation Act . . 4-1
4.1.3. Agricultural Districts 4-3
4.1.4. Right-To-Farm Legislation . . .-. 4-4
4.1.5. Agricultural Zoning ... 4-4
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TABLE OF CONTENTS (concluded)
Page
4.2. Wisconsin 4-5
4.2.1. Wisconsin Farmland Preservation Program 4-5
4.2.2. Wisconsin Agricultural Impact Statement Program . 4-10
4.2.3. Right-To-Farm Legislation 4-11
4.3. Minnesota 4-12
4.3.1. Minnesota Agricultural Land Preservation and
Conservation Policy 4-12
4.3.2. Tax Incentives 4-14
4.3.3. Metropolitan Agricultural Preserves Program . . . 4-15
4.3.4. State Environmental Review Program 4-17
4.3.5. Metropolitan Council Guidelines 4-17
4.3.6. Right-To-Farm Legislation 4-18
4.4. Michigan 4-18
4.4.1. Michigan Farmland and Open Space
Preservation Act 4-18
4.5. Indiana 4-20
4.5.1. Tax Incentives 4-21
4.5.2. Right-To-Farm Legislation 4-21
4.5.3. Zoning 4-21
4.6. Ohio 4-22
4.6.1. Tax Incentives 4-22
4.6.2. Agricultural Districts 4-22
5.0. AGRICULTURAL LAND PROTECTION PROGRAMS USED IN OTHER STATES . . 5-1
5.1. Oregon's Agricultural Land Protection Program 5-1
5.1.1. Policy Statements 5-1
5.1.2. Definition of Agricultural Lands 5-2
5.1.3. Uses of Agricultural Land 5-2
5.1.4. Land Division Standards 5-3
5.1.5. Exceptions 5-3
5.1.6. Benefits for Protected Lands 5-3
5.1.7. Encouragement of Growth in Alternative Areas . . 5-4
5.2. Maryland Agricultural Land Preservation Foundation . . . 5-4
6.0. QUANTITATIVE METHODS FOR ASSESSING IMPACTS TO
AGRICULTURAL LAND 6-1
6.1. Agricultural Land Evaluation and Site Assessment .... 6-1
6.1.1. Farmland Evaluation 6-2
6.1.2. Site Assessment 6-2
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LIST OF FIGURES
Figure Page
2-1. Alternative Rural Development Patterns 2-10
2-2. Dwelling Units Allowed per Parcel under a Quarter/Quarter
Ordinance 2-13
2-3. Dwelling Units Allowed per Parcel in the Sliding Scale Area-
based Allocation Zone of Shrewsbury Township, Pennsylvnia 2-14
2-4. Relationship of the Value of Development Rights to Market
Value and Agricultural Use Value 2-16
Table LIST OF TABLES
2-1. Numbers of dwelling units permitted In the sliding scale
area-based allocation zone of Shrewsbury Township,
Pennsylvania 2-12
2-2. Status and type of agricultural land protection legislation
and methods used in the U.S 2-20
4-1. Maximum tax credit schedule: Wisconsin Farmland Preserva-
tion Law 4-8
Cover photo credit: Gregory A. Vanderlaan
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1.0. INTRODUCTION
The preservation of agricultural lands addresses two main concerns:
(1) the reduction in the quantity or acreage of the nation's agricultural
lands, and (2) the lessening of available farmland through soil erosion or
other factors. Together, these two patterns may lead to a general diminu-
tion in the nation's agricultural production. Because of the Importance of
protecting and preserving America's farmlands, a number of studies have
been completed which examine various aspects of this issue. A brief des-
cription of these studies, as well as related national policies, is pre-
sented below.
From the early 1920s through the 1960s, agricultural policies were
directed at reducing surpluses of crops and livestock, partly by withhold-
ing land from production. Between 1935 and 1974, the number of farms
declined from 6.8 million to 2.3 million, while farm output more than
doubled. In recent years, however, the adequacy of the nation's agricul-
tural land base to meet future food production needs has been questioned.
Factors leading to this concern include:
Uncertainty as to whether worldwide population growth will
exceed our ability to increase production by applying tech-
nology and energy to land and water resources.
Changes in the nationwide agricultural system, including
production, transportation and marketing, that threaten the
continued economic viability of farming as a commercial
enterprise.
Other economic factors which also threaten the continued
viability of farming including the high market value of land
near urban areas, tax assessments on farms for services they
don't use, inheritance taxes, and conflicts between agricul-
tural and urban land uses.
The recent trend of increased population growth in rural
areas; during the 1970s, the rate of population growth in
rural areas exceeded that of urban areas for the first time
in this century.
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The difficulty in developing and implementing local, state
and Federal policies and regulations to protect agricultural
land while recognizing the prevailing national ideal that
land ownership entails the opportunity to use land to meet
personal needs if those needs do not threaten the health,
safety and welfare of the community.
The importance of maintaining the nation's agricultural potential thus
involves such issues as the agricultural system itself (increased producti-
vity at the expense of increased inputs of energy); national and inter-
national economics (agricultural exports as a means of reducing trade defi-
cits); regional and national land use considerations (the right to free
movement and settlement); legal implications (the dichotomy between com-
monly-held perceptions concerning land ownership and legal interpretations
which hold that land ownership only entails the right to use land in ways
which are consistent with the common good as defined by units of land gov-
ernment); and other factors. Hence, the concern over the nation's ability
to maintain a level of agricultural potential that meets the needs of the
country, and to a greater extent in the future, the world, involves a
complex dynamic of forces that affect the importance of agricultural land
from an economic, political and social perspective.
Much of the current debate over the preservation of agricultural land
was sparked by the publication of the National Agricultural Lands Study
(NALS) in 1981. According to the Study, three million acres of agricul-
tural land are being lost each year to non-agricultural uses. The NALS
reports have received considerable scrutiny and have stimulated much dis-
cussion since their publication, including the fact that a growing number
of experts have concluded that there is no crisis in the supply of agricul-
tural land, either at present or in the future. This conclusion is based on
the belief that the information presented in the NALS reports are based on
inadequate data and inaccurate analyses. Further, many experts believe
that the conversion of land to urban uses is affecting agricultural produc-
tion significantly less than other factors such as crop yields, erosion,
and scattered rural development.
Regardless of the amount of agricultural land that is actually con-
verted to urban uses on a yearly basis, or the significance of other fac-
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tors that threaten the viability of farming as a commercial enterprise,
there is no question that the maintenance of an adequate resource base and
sound agricultural economy is an important national priority. Although the
debate as to the real or imagined threats to agriculture in the United
States, is still unfolding, decision-makers at all levels of government and
interested citizens are becoming increasingly aware of the importance of
agriculture to the nation's economic and social well-being. As a result, a
number of local, state and federal policies and programs have been de-
veloped to address particular issues concerning the preservation of agricul-
tural land and the maintenance of an agricultural potential sufficient to
meet future needs.
The objective of this Report is to provide the US Environmental
Protection Agency (EPA) and state agency personnel with an overview of the
factors affecting the conversion of agricultural land, as well as the
programs and policies that have been used or could be applied In order to
maintain agricultural potential. This Report summarizes the factors in-
fluencing the conversion of agricultural land and the measures that have
been taken at the state and federal level to minimize the continued loss of
agricultural land to other land uses. Some of the basic causes of agricul-
tural land conversion are described in Section 2.0. along with a discussion
of the direct and indirect methods that have been developed to protect
farmland. An overview of federal policies and regulations concerning
agricultural land protection is presented in Section 3.0. The programs and
policies that are being used in US Environmental Protection Agency (EPA)
Region V (Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin) to
preserve farmland are described in Section 4.0. Two State programs (those
of Oregon and Maryland) that attempt to address in a comprehensive manner
the protection of agricultural land are discussed in Section 5.0. Finally,
Section 6.0. describes a quantitative method for assessing the impacts of
proposed actions on agricultural land (the Agricultural Land Evaluation and
Site Assessment methodology).
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2.0. BASIC METHODS OF AGRICULTURAL LAND PRESERVATION
In recent years the conversion of agricultural land to other types of
land uses has gained an increasing amount of attention. Many articles,
books, and conferences have focused on the causes and solutions to the loss
of agricultural land. This chapter summarizes available information.
2.1. Causes of Agricultural Land Conversion
Agricultural land is converted to other types of uses for a variety of
reasons. These reasons can be catgorized into three broad areas: economic
factors, nuisance factors, and the taking for public uses.
2.1.1. Economic Factors
The economic factors that eventually lead to agricultural land conver-
sion are, for the most part, directly related to urban development that
occurs in an agricultural area. In general, agricultural lands near or
contiguous to developed areas are appraised at a higher market value than
are lands that are not; this difference in market value reflects the land's
potential for urban development. However, while an increased market value
may be desired by the landowner, the higher appraised value results in a
greater property tax burden on the farmer. Many farmers cannot afford the
additional property taxes and decide to relocate their operations else-
where, selling the land to developers or speculators.
Another type of economic factor that plays a role in farmland conver-
sion is the special assessment taxes on farmland. When a municipality
provides services or improvements such as water, sewerage, or drainage to
an isolated developed area, the lines or other improvements may run along
the edge of a farm or across it. The owner of the farm is assessed a
portion of the improvement's cost based on the front-footage or other
method. Even though the farmer has no use for the service or improvement
in his farming operations, he is required to pay for their construction
costs, thus creating an economic burden that may force him to sell his land
and farm elsewhere.
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A third economic factor leading to farmland conversion is "the increase
in property tax millage rates as a result of nearby urban development. As
nearby towns and villages experience growth in population and physical
size, additional services such as schools, hospitals, fire protection,
libraries, transportation systems, etc. are required by the residents. To
fund such services and facilities the tax millage rate is often increased
to produce greater tax revenues. Therefore, farmland within the tax juris-
diction often has higher annual tax bills, creating an additional economic
burden that makes farming of the land less profitable and leading to con-
version of the land.
A final economic factor sometimes resulting in the conversion of
farmland to other uses is the federal taxation policy on inheritance and
gifts. The federal estate and gift tax provisions may pose substantial and
unique barriers for farmers in the transfer of wealth (In this case, farm-
land) from one generation to the next. Estate taxes are so substantial
that often the beneficiaries of farmland are forced to sell part of their
inheritance in order to pay the tax. This situation results in a larger
number of smaller agricultural parcels that may not be suitable for effi-
cient farming operations. Also, depending on the location of the farmland,
the parcel sold to pay taxes may be used for other uses instead of agricul-
ture; thus, the conversion of farmland takes place.
2.1.2. Nuisance Factors
A basic incompatibility exists between farming activities and residen-
tial or other urban land uses. Farming activities can create noise, dust,
odors, and other inconveniences that affect nearby non-farm land uses. As
residential development becomes more common in rural areas, farmers become
subject to lawsuits by residential landowners who claim that the farm
operations are a nuisance. Residential landowners may force local offi-
cials to pass ordinances which restrict both the type of operations that
may occur on a farm and the hours of such operations. The end result is
that the farmers are harrassed by their neighbors and are forced to defend
themselves against legal proceedings and/or severly limit the types and
times of farming activities to suit the residential population. This
aggravation and harrassment are expensive and time consuming to the farmer.
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Often, the farmer's only solution to the problem is to sell the farm,
subjecting the agricultural land to conversion to other uses.
2.1.3 Taking for Public Use
The final general category of factors leading to farmland conversion
is the public taking of land by eminent domain. Agricultural land is taken
through the power of eminent domain for public uses such as highways,
reservoirs, parks, airports, power line corridors, and pipeline rights-of-
way. These types of public projects can consume and irreversibly convert
large amounts of agricultural land.
2.2. Methods of Farmland Protection
A variety of methods have been devised to protect farmland from con-
version to other uses. These methods are categorized as follows: indi-
rect, direct, and integrated. Indirect farmland preservation methods are
those incentives offered to the farmer for the purpose of either reducing
economic burdens caused by nearby development or protecting the farmer from
local nuisance ordinances that might interfere with normal farming opera-
tions. Indirect farmland incentives include tax relief programs, agri-
cultural districting, and right-to-farm laws. Direct farmland preservation
methods are those land use controls aimed at specific lands designated for
agricultural protection and/or preservation. Typically, these land use
controls are zoning and the transfer or purchase of development rights.
Integrated methods are comprised of two or more of the direct or indirect
methods formed into a unified program of farmland preservation. The
following sections briefly describe these methods and their effectiveness.
2.2.1. Indirect Methods
Indirect farmland preservation methods include programs that offer tax
relief to farmers, create agricultural districts to discourage farmland
conversion, and right-to-farm legislation.
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2.2.1.1. Tax Relief
Tax relief programs are designed to remove some of the economic bur-
dens that are associated with farming. These programs consist of preferen-
tial assessment, deferred taxation, tax credits, and preferential assesment
for inheritance tax purposes.
Preferential assessment programs assess farm property for real pro-
perty tax purposes at its agricultural or current use value, rather than at
its fair market value (FMV). The FMV includes the development potential of
the land, thus raising land values and assessments beyond the means of many
fanners. The overall effect of preferential tax assessment is to reduce
farm taxes by the difference between fair market value and a current use
value assessment. The effectiveness of preferential assessment as a method
of preventing the loss of farmland may be measured by the percentage of
farmers that are able to take advantage of the program. However, strict
eligibility requirments may cause fewer farmers to participate in the
program. Moreover, the land must meet certain eligibility conditions in
order to be included in the preferential tax assessment program; the condi-
tions though minimal, may include the requirement that the land be in
agricultural use presently, or has been agricultural use for a predeter-
mined number of years. Also, it is likely that farms in the vicinity of
urban growth areas would obtain higher benefits than other farms because of
the higher market value of land closer to developed urban areas.
Pefer red taxat i on programs combine an economic deterrant to later
agricultural land conversion with the preferential assessment of farmland.
Eligible farmland is assessed at current use value for real property tax
purposes, however, if the farmland owner decides to convert the land to
non-farm use he has to pay some or all of the taxes that had been deferred
previously. This type of program is designed to deter landowners from
converting their farmland to other uses and to recoup some of the lost tax
revenues if such conversion occurs. The length of time for which deferred
taxes must be repaid varies from two to twenty years, but is typically
between four and seven years. Another variation of 'eferred taxation is
the land use change tax which simply makes the deferred tax equal to a
stated percentage of the FMV. The relative effectiveness of deferred
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taxation methods depends largely on the magnitude of the penalty. The
larger the penalty imposed, the less attractive the sale of the land will
be to a prospective developer. Used alone, the deferred taxation method
has proven not to be an effective deterrent to farmland conversion.
Tax c red it s are another method of reducing the economic burden of real
property taxes on farmers. These programs are called "circuit breakers" in
that they allow an eligible owner of farmland to apply some or all of the
property taxes on his farmland to a tax credit against his state income
tax. This type of program relieves the farmer of additional real property
taxes once they exceed a given percentage of his or her income. Eligi-
bility requirements vary, but generally a specified minimum gross acreage
and gross annual income from agriculture is stated. Currently, Michigan
and Wisconsin use tax credits as part of their farmland prevention program.
Preferential assessment for inheritance tax purposes is intended to
relieve the economic burden on the heirs to farmland in order to keep the
farmland estate intact and operable as a farm. The Tax Reform Act of 1976
(P.L. 94-455) and the Revenue Act of 1978 (P.L. 95-600) made major changes
in estate and inheritance tax provisions affecting farmers. Many states
have incorporated some or all of these provisions into their own death tax
laws. Basically, these laws call for the appraisal of eligible farmland
for inheritance tax purposes to be made at the farm value instead of FMV.
The Tax Reform Act of 1976 also has provisions for deferral of tax payment,
thus enabling the executor of an estate to defer payment of taxes for five
years and then make equal payments over a period of ten years. These
inheritance tax provisions both at the federal and state levels reduce
estate taxes for farm families and, as a result, lower the rate at which
farmland might be converted to non-farm use by effectively reducing the
number of farm estate sales caused by insufficient liquidity.
In assessing the overall effectiveness of tax relief methods two
factors must be examined the effectiveness of reducing economic burden
and the effectiveness of reducing the rate of farmland conversion. Tax
relief programs for farmers are generally effective in reducing the eco-
nomic burden of taxes. However, the magnitude of the reduction varies
greatly from one location to another as does the number of eligible farms
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and farmers. Tax relief programs in themselves, are not effective tech-
niques for reducing the rate of conversion of farmland to non-farm uses.
If a farmer is under pressure to sell his land for other uses, tax incen-
tives only postpone the sale a few years, at best. Tax incentives, alone,
cannot outweigh other considerations such as high offering prices for
farmland on the fringe of urban development.
2.2.1.2. Agricultural Districts
The creation of agricultural districts is another example of indirect
incentives. Agricultural districting provides a geographical and organi-
zational framework within which certain incentives can be made available to
farmers. The farmers voluntarily join the district, thereby enjoying the
benefits which make their farms free from undesirable factors. The posi-
tion of agriculture as a livelihood and land use in the district and com-
munity as a whole is thereby significantly strengthened and reinforced.
These districts are legally recognized areas whose formation is initiated
by one or more farmers and approved by the appropriate government agencies.
The individual farmers that comprise the district join for a fixed, but
renewable, period of years, usually ranging from four to ten years.
Agricultural districting programs are made up of several elements
(incentives). In the districting programs developed to date, 13 elements
have been used in varying combinations. These elements are:
Differential assessment of real property taxes to reduce
economic burden on fannowners;
Protection from local government ordinances which hinder
farming activities;
Limitations on public improvement investments that promote
non-farm developments within the agricultural district;
Limitations on the use of eminent domain by public agencies to
acquire land within agricultural districts;
Limitations on special assessments for community services;
State agency regulations and procedures supportive of con-
tinued agricultural activities within districts;
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Limitations on annexations of district lands by municipali-
ties;
Requirements for sound conservation practices;
Limitations on the rate of tax increases;
Compensation to local government units for tax revenue losses
due to other program elements;
Zoning land adjacent to agricultural districts so as to reduce
conflicts and development pressures;
Purchase of development rights or easements to lands within
the district; and
Limitations on development of districted land with zoning or
other restrictions.
Of these thirteen elements, the first six are used most frequently in the
agricultural district programs developed to date.
The criteria and standards for agricultural district formation vary
from state to state, but generally specify a minimum size, contiguity of
parcels, and minimum soil quality requirements. The purpose of a minimum
size criterion is to ensure that the district will be able to support
agriculture even if it is surrounded by non-agricultural development. With
a larger district, more of the land will be located within the interior
which is protected from non-farm land uses. Contiguity of parcels in an
agricultural district is encouraged or required by most programs. This
situation tends to allow the district to function more effectively and
eases administration. In reality, most districts contain land which is not
part of the district. The land characteristics of areas to be considered
for districting is an important concern. Most programs specify that: (1)
the land in districts must be of sufficient quality in order to support a
viable agricultural industry, and (2) the formation of a local advisory
committee be made up of active farmers and other local citizens in order to
evaluate land before its inclusion into the district.
The effectiveness of agricultural districts as a means of reducing the
rate of farmland conversion varies depending on the particular combination
of elements included in the district's program. Most current districting
programs have not been in operation long enough to draw conclusions about
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their effectiveness. At this time, it appears that districts provide
farmers with more of an enhanced sense of security and protection, rather
than reducing the rate of farmland conversion. The continued development
of districting legislation may produce better results for farmland protec-
tion in the future.
2.2.1.3. Right-To-Farm Legislation
The basic incompatibility between some farming operations and residen-
tial uses often results in complaints and nuisance lawsuits by residential
landowners. In at least 17 states, farmers have turned to their state
legislators for relief. So-called right-to-farm laws have been developed
to protect the farming community from harrassment by its neighbors. Three
basic types of laws have been used:
Laws protecting farmers against local government regulations;
Laws protecting farmers against state regulations; and
Laws protecting farmers against private nuisance lawsuits.
Many states provide more than one form of protection, particularly protec-
tion from local government regulations and private nuisance lawsuits in
combination. In some states, such as Illinois, the law only applies to
farms that are included in agricultural districts. Very little information
is available with which to assess the effectiveness of right-to-farm legis-
lation because most existing laws are only three or four years old and have
not been extensively proven in courts of law. The laws' intentions are
good: to protect the farmer against unnecessary and disruptive nuisance
actions and government regulations, while at the same time protecting the
public health and safety. However, such laws alone do not appear to be
effective in reducing the rate of farmland conversion.
2.2.2. Direct Methods
Direct farmland preservation methods include state or local programs
in which the governmental unit has the authority and capacity to prevent
conversion by excluding non-farm development activities. Examples of
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direct methods to prevent farmland conversion include state-mandated re-
strictive zoning, the purchase or transfer of development rights, and
executive- or legislative-imposed restraint of state agencies' acquisition
of farmland for non-farm use.
2.2.2.1. Agricultural Zoning
The use of zoning designations to protect agricultural lands has been
the most common and widespread method to limit the conversion of farmland.
In the preceeding decade, over 270 counties and municipalities have used
agricultural zoning to protect and preserve farmland. Agricultural zoning
ordinances generally differ depending on whether new non-agricultural land
uses are allowed into established agricultural zones. Agricultural zoning
ordinances, therefore, fall into one of two basic categories: non-
exclusive ordinances and exclusive ordinances.
Non-exclusive agricultural zoning ordinances are by far the most
popular approach to agricultural land protection. Non-farm dwellings are
allowed, but agricultural uses are preferred. In these zones, non-farm
dwellings may be permitted either conditionally or as-of-right. Four types
of non-exclusive agricultural ordinances can be categorized:
Large minimum lot size ordinances;
Fixed area-based allocation ordinances;
Sliding scale area-based allocation ordinances; and
Conditional use zone ordinances.
Large minimum lot size zoning ordinances, as the name implies, require
a substantial minimum lot size for single detached dwelling units. Lot
sizes usually range from ten acres to as much as 640 acres (one square
mile) (Figure 2-1). The intent of this type of zoning ordinance is to
discourage non-farm uses in agricultural areas by making the purchase of
land for housing too expensive for the average homeowner, while at the same
time providing for a piece of land that is not too small for profitable
farming. Generally the minimum lot size is related to the typical size of
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Figure 2-1. ALTERNATIVE RURAL DEVELOPMENT PATTERNS
Source: Adapted from Qloay liAAtAT Elan (The Maryland National Park
and Planning Commlaaion, July, 1980)
Existing Farm
Existing Pattern of
Five-acre Rural Zoning
Large Lot
Agricultural Zoning
(1 lot/25 acres)
Area-based Allociation
Agricultural Zoning
(1 dwelling/25 acres)
Rural Cluster
(1 acre minimum lot size)
60% Open Space Preserved
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commercial farming operations in the area or region. Where typical farming
operations are conducted on small acreages, this type of ordinance is not
effective. Minimum lot size ordinances can discourage most non-farm resi-
dences, but because the ordinances do not specifically exclude non-farm
uses, they do not deter the development of "ranchettes," or five- to 20-
acre parcels that are not used for commercial farm purposes.
In fixed area-based allocation ordinances, owners are allowed to build
one house for each unit of land of a specified area that they own, ranging
from one dwelling per ten acres to one per 160 acres (Figure 2-2). The
median allocation is approximately one dwelling for each 40 acres owned.
No units are allowed for remainders of less than the specified number of
acres. Minimum and, sometimes, maximum lot sizes are also established as
part of the ordinance. The use of fixed area-based allocation ordinances
allows the community to establish densities that are suitable in agricul-
tural areas. The major strength of such ordinances is that small lots can
be used for non-farm dwellings while the larger blocks of farmland can be
preserved for agricultural use. Housing units can be required to be lo-
cated on non-farmable land or clustered in the most suitable areas.
Sliding scale area-based allocation ordinances are similar to fixed
area-based ordinances. Both ordinances allocate building rights on the
basis of ownership of units of land of a given area. However, sliding
scale ordinances state that the number of dwellings allocated per acre
decreases as the farm size increases. This method results in fewer
dwellings on farmland, preserving more land for agricultural uses (Table
2-1; Figure 2-3).
The fourth type of non-exclusive zoning ordinance, the conditional use
zone, allows non-farm dwellings as a conditional use only if they meet
specific criteria based on the compatibility of the proposed dwelling with
surrounding agricultural uses. No large minimum lot size requirement is
imposed. Conditional use zones have the potential for producing non-farm
development that is compatible with the purpose of the agricultural zone,
because the zones do not allow non-farm dwellings as a permitted use.
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Table 2-1. Numbers of dwelling units permitted In the sliding scale area-
based allocation zone of Shrewsbury Township, Pennsylvania.
Resulting
Density
(dwelling
Dwellings Permitted units
Si_ze of Parcel by Ordinance per acre)
0-5 acres 1 0.2 to 1.0+
5-15 acres 2 0.133 to 0.4
15-30 acres 3 0.1 to 0.2
30-60 acres 4 0.067 to 0.133
Over 60 acres 5 plus 1 dwelling 0.033 to 0.083
for each additional
30 acres.
Exclusive agricultural zoning ordinances share the following charac-
teristics:
Non-farm dwellings are prohibited;
The communities use a performance definition of a farm or
farm use rather than defining a farm by a large minimum lot
size or area-based allocation; and
Each request to build a farm dwelling is reviewed on a
case-by-case basis according to specific standards and
criteria.
The primary advantage of exclusive agricultural zoning is that the
conflict between residential and farm uses is minimized because non-farm
dwellings are prohibited. The disadvantages of exclusive agricultural
zoning are that such zones do permit, or conditionally permit, non-farm
uses such as landfills, mining, cemetaries, and utility lines. Such zoning
ordinances are also more expensive to administer because each proposed
dwelling must be evaluated to determine if it meets the applicable cri-
teria. Exclusive agricultural zoning ordinances are often difficult to
adopt because they foreclose residential development to farmland owners.
In exclusive agricultural zones, and in non-exclusive zones where a
proposed development does not meet existing criteria, a rezoning procedure
2-12
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is required to permit a non-farm dwelling If a community fails to develop
and apply adequate criteria for rezoning, the protection accorded to agri-
cultural activities may be reduced and, perhaps, lost.
The typical rezoning request involves a landowner who wishes to rezone
a parcel from the most restrictive agricultural zone and to a less re-
strictive agricultural or rural residential zone. Guidelines for consider-
ing such rezoning requests usually contain five principal criteria. These
criteria address: (1) soil quality; (2) parcel dimension; (3) parcel slope
and vegetation cover; (4) conflict with adjacent agricultural or non-agri-
cultural use; and (5) effects of the change (if granted) on public services
and facilities.
2.2.2.2. Purchase of Development Rights (PDR)
The right to build over, on, and beneath the land is known as the
development right(s) of the property owner. Farmland preservation can be
achieved by acquiring the right(s) to develop the land, leaving the farm-
land without the capability to be developed. The acquisition of these
development rights, as well as their separation from the actual property,
is similar to the acquisition of an easement on the property. Thus, the
acquisition of development rights is alternatively referred to as the
acquisition of a development, conservation, or scenic easement. These are
known as negative easements because they simply prevent the landowner from
doing something with his land.
Development rights may be acquired in two ways. An outright purchase
(or donation) of the development right can take place, or the land can be
bought in full fee and then sold or leased back with restrictions on
development imposed. The purchase of development rights (PDR) is used more
commonly in this country. Usually, a governmental body will purchase the
development rights, holding them intact and removing them from possible use
(Steiner 1981).
PDR programs are effective in permanently removing agricultural lands
from development, but the price is usually very high in areas where devel-
opment pressures are great (Figure 2-4). Funding for most programs comes
2-15
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Figure 2-4. Relationship of the Value of Development Rights
to Market Value and Agricultural Use Value
'w'ww
Market Value
''1
Value of
Development Rights
Value of
Development
Agricultural Use Value
4 * "« »****«******
Area of High Development Pressure
2-16
-------
from the sale of general obligation municipal bonds, earmarked tax re-
sources, and in some areas, matching funds from other governmental units.
Regardless of the funding source, the cost per acre of protected land is
high. As of 1981, approximately 10,300 acres of land have had development
rights purchased by such programs nationwide, at an average cost of $1,848
per acre.
2.2.2.3. Transfer of Development Rights (TDR)
This method of farmland protection, also quite new, involves the same
development rights of land as described previously. Instead of purchasing
the development rights of a parcel of land and holding them intact, the
development rights are purchased or exchanged for the right to develop in
another location. Generally, land in a jurisdiction is divided into
originating zones and receiving zones. The originating zones are comprised
of farmland that is worthy of preservation as farmland. The receiving
zones are basically non-sensitive areas that can be developed for urban
land uses. The development rights of land in the originating zone are
purchased by a developer, for instance, so that he or she can build more
houses per acre than is normally allowed in a subdivision located in the
receiving zone. Although TDR programs are much more complicated than this
simplified explanation, the three basic components or tasks required to set
up the program are: (1) designating the originating zones; (2) designating
the receiving zones; and (3) developing a legal mechanism of transferring
the development rights from the originating to receiving zones.
Presently, TDR programs have been instituted in ten municipalities and
two counties. Other government units are investigating the establishment
of TDR programs to protect not only farmland but other ecologically and
historically fragile areas. With limited exceptions, developers have shown
little interest in participation in TDR programs. A demand for higher
density development must be presented in order for TDR programs to be
successful. Hopefully, the newer programs which have been adopted by large
suburban counties may include development locations where the market will
support higher densities and where the county government will provide
sufficient facilities and public services so that developers will find it
profitable to purchase and transfer rights.
2-17
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2 2.3. Integrated Programs
Integrated programs for agricultural land preservation combine both
incentives and controls to form an overall program. The various elements
of an integrated program may be administered from one level or from
differing levels of government. As an example, an integrated program may
be comprised of tax relief programs and right-to-farm legislation at the
state level, and an agricultural zoning ordinance at the county or local
level. On the other hand, an integrated program may be implemented solely
from one level, such as the state level, where incentives and controls are
provided in the form of preferential tax assessments; these incentives and
controls are dependent on whether or not local governments adopt agricul-
tural preservation plans or zoning controls. The number of combinations of
such integrated programs is almost limitless and can be tailored to fit the
particular needs of the area or subarea based on specific agricultural and
development characteristics of the region.
In many areas the problem of agricultural protection can be addressed
realistically and effectively only by considering its relation to the
entire system of land use and development within a given region. In other
words, the goal of protecting farmland must be balanced with other compet-
ing and supporting interests of the region, such as providing housing and
jobs for current and future residents, protecting environmentally sensitive
areas, providing adequate public services and facilities, and keeping
fiscal expenditures at a minimum. The need to incorporate agricultural
protection into an overall growth management program is especially impor-
tant in metropolitan areas where development pressures on agricultural land
are greatest.
2.3. Current Use Of Agricultural Lancl Preservation Methods
Because of the recent nationwide concern and publicity highlighting
the farmland protection issue, all 50 states have enacted some form of
legislation to assist farmers and/or prevent the conversion of farmland.
Table 2-2 depicts the type of legislation presently in place in each state.
The legislation is broken down according to seven broad categories: tax
incentives; agricultural district enabling legislation; purchase of devel-
2-18
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opment rights; transfer of development rights; agricultural zoning;
right-to-farm legislation; and state policy statements or governors'
executive orders.
As Table 2-2 indicates, all states, except Kansas, have some form of
tax incentive program to assist farmers. Fifteen states use agricultural
districting as a means of protecting agricultural land. Purchase of de-
velopment rights legislation has been enacted in ten states, not including
Michigan which has a modified version of this type of program. Only five
states allow a transfer of development rights program; this type of method
is relatively new and may be used more frequently in the future. Almost
half (22) of the states allow agricultural zoning at either the county or
local level. The right-to-farm laws are fairly common throughout the
nation, with 37 states protecting farming with this method. Only 11 states
have explicit policy statements that provide a basis for a concerted effort
by state agencies to halt the conversion of farmland to other uses.
2-19
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3 0. OVERVIEW OF FEDERAL POLICIES AND REGULATIONS
The Federal government administers a variety of programs that affect
land use at the state and local levels. Federal projects and federally-
assisted projects for highways, housing, water resource development, waste-
water treatment, and other public works projects have often directly or
indirectly contributed to the conversion of agricultural land uses. Until
the mid-1970s little attention was focused upon the problem of conversion
of agricultural land as a result of federal actions. This chapter identi-
fies and describes the specific federal regulations and policies that have
been developed to protect agricultural lands from conversion pressures.
3.1. Federal Regulations
The two major federal regulations which address the issue of agricul-
tural land protection are the Farmland Protection Policy Act and the
National Environmental Policy Act; both of these acts are described below.
3.1.1. Farmland Protection Policy Act
The Farmland Protection Policy Act, Subtitle I of Title XV of the
Agriculture and Food Act of 1981 (P.L. 97-98) establishes a national policy
to minimize the extent to which Federal government programs contribute to
the unnecessary and irreversible conversion of farmland to nonagricultural
uses. This Act proposes to assure that all Federal programs are admin-
istered in a manner which will be compatible with public and private pro-
grams and policies that protect and preserve farmland.
The Act authorizes the Department of Agriculture (USDA), in conjunc-
tion with other Federal agencies, to establish criteria and procedures for
identifying the effects and potential impacts of Federal programs on the
conversion of farmland to nonagricultural uses. Specifically, all Federal
agencies are required to use the following criteria:
1. To identify and take into account the adverse effects of Federal
programs on the preservation of farmland;
3-1
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2. To consider alternative actions, as appropriate, that could
lessen such adverse effects; and
3. To assure that such Federal programs, to the extent practicable,
are compatible with state and local government and private
programs and policies to protect farmland (Section 1541(b) of the
Act (7 U.S.C. 4202(b)).
The identification of possible federally funded adverse effects on farmland
included such actions as the review of current laws, rules and regulations,
policies and procedures by all Federal departments, agencies, independent
commissions and other units of government (Section 1542 of the Act (7
U.S.C. 4203)).
Remaining sections of the Act provide for technical assistance, the
establishment of farmland information centers, and the authority to issue
grants and contracts to carry out the purposes of the Act. Two significant
limitations are also written into the Act. The Act applies only to Federal
agencies and Federal programs; the Act has no bearing whatsoever on pre-
venting private landowners from converting their property to nonagricul-
tural uses. In addition, the Act cannot be used as a basis for any legal,
or other action, by any state or local government, or person or class of
persons challenging a Federal project, program, or other activity which may
adversely affect farmland.
The draft rules for the implementation of the Farmland Protection Policy
Act were published on July 12, 1983, in the Federal Register (Vol. 48, No.
134, 31863-31866). The proposed rule, Part 658 of this Act, contains auth-
orization for three major activities: (1) the establishment of criteria
for determining potential adverse effect to farmland; (2) guidelines for
use of the above-mentioned criteria, and (3) the provision of technical
assistance. These three activities are discussed briefly below.
The criteria for determing potential adverse effect to farmland are
addressed by the proposed rule in two ways. First, five land evaluation
criteria are examined by the USDA, Soil Conservation Service (SCS). Based
on detailed information about the significance of the site and the amount
of potential farmland that may be lost by a proposed project, the SCS will
3-2
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assign each parcel of farmland an overall score between 0 and 100; the
higher the score, the greater the land's value as farmland. The second set
of criteria involves 16 site assessment criteria. These criteria are to
be used by the Federal agencies in assessing the suitability of each pro-
posed site for protection as farmland. Each criteria will be given a score
on a scale of 0 to 10, with 10 representing the most suitable use as farm-
land. These criteria address, for example, the land use of adjacent par-
cels, other protective measures that may be in place, the relation of the
proposed project to other comprehensive plans for the area, the availabil-
ity of utilities and other needed public facilities, and the present and
proposed farming practices.
According to the proposed rule, for each proposed Federally-funded
project which may have an adverse effect on farmland, the following proces-
ses must take place:
1. The SCS will measure the relative value of the site as farmland,
in accordance with the land evaluation criteria.
2. The individual Federal agencies will measure the suitability of
the site for protection as farmland according to the site evalu-
ation criteria.
3. The score from the land evaluation and site evaluation will be
combined for USDA use and analysis.
4. Many states and local governments have developed and adapted Land
Evaluation and Site Assessment (LESA) systems to evaluate the
productivity of agricultural land and suitability or nonsuitabil-
ity for conversion to nonagricultural use. These LESA are pre-
pared with the assistance of the SCS. In cases where a proposed
project is located within an area that has already been examined
by the LESA, the USDA will analyze the LESA evaluation.
Part 658 of the Act specifies that USDA will provide technical assis-
tance to states, units of local government, and nonprofit organizations in
developing their programs or policies to protect farmland from unnecessary
conversion. This technical assistance may include the availability of maps
and soils information; the preparation of LESAs; the provision of aerial
photography, crop history data and related information; the identification
of farmland protection issues and problems, including resolving conflicts,
developing alternatives, deciding on appropriate actions and implementing
those decisions.
3-3
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In summary, the Farmland Protection Policy Act Is based largely on the
findings and recommendations of the National Agricultural Lands Study
(NALS) which was sponsored by the DOE and the Council of Environmental
Quality (CEQ). The purpose of the NALS is to determine the availability of
the nation's agricultural lands, the extent and causes of their conversion
to other uses, and ways in which these lands might be retained for agricul-
tural purposes. Critics have recently charged the study with the careless
or deceptive use of statistics concerning the quantity of agricultural land
converted in the past and projected to be converted in the future. Contin-
ued criticism of the NALS could eventually erode support for the Act.
3.1.2. National Environmental Policy Act
The National Environmental Policy Act (NEPA; 41 USC, 4321-4347, Sec-
tion 102) provides the legislative mandate for environmental planning and
assessment. Section 102 provides for the consideration of environmental
impacts resulting from major Federal actions significantly affecting the
quality of the human environment. This requirement is the basis for the
environmental impact statement (EIS). The Act also includes the require-
ment that a detailed statement be developed which addresses the relation-
ship between local short-term use of man's environment and the maintenance
and enhancement of long-term productivity, as well as any irreversible or
irretrievable commitments of resources which would be involved in preposed
actions should such actions be implemented. NEPA provides the basic foun-
dation for Federal involvement in agricultural land protection.
3.2. Federal Policies, Authorities, and Legislative Background
The Federal policies and authorities dealing with agricultural land
preservation are found most commonly in the Council on Environmental Qual-
ity, the USDA, and the USEPA. These agencies are described below, as they
relate to this issue.
3.2.1 Council on Environmental Quality (CEQ) - Memorandum for Heads of
Agencies - Analysis of Impacts on Prime and Unique Farmland in Environ-
mental Impact Statements. August 30, 1976.
3-4
-------
This original memorandum on agricultural land protection directed
Federal agencies to attempt to determine the existence of prime and unique
farmlands in the areas of impact analyzed in environmental impact state-
ments as required by NEPA regulations. The importance of such farmlands
was stressed and procedures for inter-agency contact and coordination were
outlined.
3.2.2. Council on Environmental Quality - Memorandum for Heads of Agen-
cies - Analysis of Impacts on Prime and Unique Agricultural Lands in Imple-
menting the National Environmental Policy Act. August 11, 1980.
This memorandum updates and supercedes the August 30, 1976, CEQ memo
mentioned above. Rather, this memorandum was developed in response to
studies which indicated that Federal agencies had not adequately assessed
potential project impacts on agricultural lands. The memo suggests that
agencies closely follow CEQ and NEPA regulations, and further states that
the assessment of effects on prime and unique farmlands must be made an
integral part of the environmental assessment process and must be addressed
in deciding whether or not to prepare an EIS. An EIS is required if sig-
nificant effects to prime or unique farmlands may occur as a result of an
action. According to this memorandum, the USDA is directed to cooperate
with all Federal agencies in planning projects, assessing impacts and de-
fining alternatives which serve to protect and preserve farmland. USDA is
further directed to provide technical assistance and review EISs regarding
potential impacts on prime and unique farmland. Where USDA review of pro-
posed Federal actions determines adverse impacts to farmlands, the proposed
action is referred to CEQ for further information.
3.2.3. US Department of Agriculture Secretary's Memorandum - No. 1827,
Supplement 1, Statement of Prime Farmland, Range, and Forest Land.
June 21, 1976.
This memorandum outlines USDA's concern for the irretrievable conver-
sion of prime agricultural lands to other non-farm uses. Six policy recom-
mendations were issued to guide the agency's actions concerning such lands.
These policies place the agency in an advocacy position concerning preser-
3-5
-------
vation of prime farmlands; make the agency responsible for assuring that
environmental impact statements and reviews adequately address the issue of
prime farmlands; and place emphasis on both cooperative programs with other
agencies and USDA programs to increase concern and interest for the reten-
tion of prime lands.
3.2.4. US Department of Agriculture Secretary's Memorandum - No. 9500-3,
Land Use Policy, March 22, 1983.
This memorandum acknowledges the importance of preserving America's
unique natural reaources, including farmlands, forest lands, range lands,
flood plains and wetlands. According to this memo, USDA has adopted the
policy of promoting land use objectives which (1) retain a farm, range and
forest land base sufficient to produce an adequate national supply; (2)
assist individual landholders and state and local governments in defining
and meeting needs for growth and development in such ways that the most
productive farm, range and forest lands are protected from unwarrented con-
version to other uses; and (3) assure appropriate levels of environmental
quality. In promoting the abovementioned land use objectives, USDA at-
tempts to manage its own programs and lands according to these goals. Ad-
ditionally, USDA conducts a wide variety of multidisciplinary research and
public education programs on these issues, and assists in various planning
efforts that may directly or indirectly have a negative impact on the Na-
tion's farmlands. USDA further acts as an advocate among Federal agencies
with regard to issues involving either the retention of important farm-
lands, rangelands, forestlands, and wetlands, or the reduction of the risk
of flood loss and soil erosion.
This memorandum supercedes Secretary's Memorandm 8500-2, dated March
10, 1982.
3.2.5. US Environmental Protection Agency - USEPA Policy to Protect Envi-
ronmentally Significant Agricultural Lands. September 8, 1978.
3-6
-------
This document establishes USEPA policy regarding the protection of
certain agricultural land types. The document recognizes the food produc-
tion and environmental value of agricultural lands, and the necessity to
protect them from impacts in the implementation of programs administered by
USEPA. The policy is intended to guide USEPA actions, regulations, program
guidance, and technical assistance to reduce or eliminate adverse impacts,
and to encourage farmland protection efforts which are consistent with en-
vironmental quality goals.
This USEPA policy defines seven categories of environmentally signi-
ficant agricultural lands: prime farmland; unique farmland; additional
farmland of statewide importance; additional farmland of local importance;
farmlands in or contiguous to environmentally sensitive areas; farmlands of
waste utilization importance; and farmlands with significant capital in-
vestments in Best Management Practices (BMP). The specific directions for
USEPA action include the following:
Specific project decisions involving the planning, design, and
construction of sewer interceptors and treatment facilities
should consider farmland protection. Consistent with USEPA
cost-effectiveness guidelines, interceptors and collection
systems should be located on agricultural land only if neces-
sary to eliminate existing discharges and serve existing
habitation.
USEPA permit actions which are subject to NEPA review shall
ensure that the proposed activity will not cause conversion of
environmentally significant agricultural land. The permit
process shall consider farmland protection alternatives and
ensure that the least damaging environmental alternative is
implemented.
Primary and secondary impacts on agricultural land shall be
determined and mitigation measures recommended in environ-
mental assessments and reviews of environmental impact state-
ments of USEPA decisions, and reviews of action proposed by
other Federal agencies.
Agricultural land protection efforts of states, local govern-
ments, or other Federal programs shall be supported through
intergovernmental coordination and USEPA project reviews.
Opportunities for review and comment on proposed USEPA actions
that impact agricultural land shall be made available.
3-7
-------
The regional or local significance and economic value of
farmlands to communities shall be considered in USEPA enforce-
ment actions.
USEPA technical assistance activities in the development of
air quality, water quality, and solid waste plans shall sup-
port and encourage state and local government agricultural
land protection programs. Significant farmlands recognized in
these programs shall be incorporated into USEPA-required
environmental plans and implementation approaches.
The responsibility for implementing USEPA's agricultural land pro-
tection policy rests with each agency program and Regional Office. The
Office of Federal Activities has the responsibility for monitoring imple-
mentation of the policy and for reporting progress made in carrying out the
policy.
3.2.6. US Environmental Protection Agency - Implementation of Procedures
on the National Environmental Policy Act, 40 CFR Part 6.
Section 6.302(c) of Subpart C states that before undertaking an ac-
tion, the responsible USEPA official shall determine whether there are
significant agricultural lands in the planning area. If significant agri-
cultural lands are identified, the direct and indirect effects of the
undertaking on the land shall be evaluated and adverse effects avoided or
mitigated, to the extent possible, in accordance with USEPA's Policy to
Protect Environmentally Significant Agricultural Lands.
3-8
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4.0. STATE AGRICULTURAL LAND PRESERVATION POLICIES AND REGULATIONS IN
REGION V.
4.1. Illinois
Illinois' program for farmland protection is comprised at the present
time of tax incentives, agricultural districts, agricultural zoning at the
county and local levels, right-to-farm legislation, and an Executive Order
of the Governor and accompanying State Act directing most State agencies to
establish an agricultural land preservation policy. These components are
discussed in the following sections.
4.1.1. Tax Incentives
In the early 1970s, landowners and governmental officials began to
note a significant increase in the value of Illinois agricultural land.
From November 1974 to November 1976, inflation caused a 70 percent increase
in the average value of farmland in the State (Gardner 1980). This infla-
tion in farmland values not only affected the purchase of such land, but
also the amount of property taxes that the farmers were required to pay.
The increased tax burden on farmland prompted the passage of the Farmland
Assessment Law of 1977. This legislation provided for the assessment of
farmland to be based on the productivity of the land as farmland and not on
its value for other types of uses. The differential assessment system was
designed to reduce the pressure to convert farmland to other more profit-
able uses because of the property tax burden. If a farmland owner decides
to convert his farmland to a non-qualifying use, he or she is required by
the law to refund the tax money he did not pay for the previous three
years, plus five percent interest.
4.1.2. Executive Order and Farmland Preservation Act
An important turning point for farmland protection in Illinois occur-
red on July 22, 1980 when Governor James R. Thompson signed Executive Order
Number 4, entitled Preservation of Illinois Farmland. This Executive Order
and the Act that makes it law, the Farmland Preservation Act (Public Act
4-1
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82-945, 19 August 1982) are the cornerstones of farmland protection in the
State. The Act requires the preparation of policy statements concerning
farmland protection by each of the nine state agencies that may potentially
impact farmland through their various programs. These State agencies
include:
Capital Development Board;
Department of Conservation;
Department of Commerce and Community Affairs;
Department of Energy and Natural Resources;
Environmental Protection Agency;
Department of Mines and Minerals;
Department of Transportation;
Bureau of the Budget;
Illinois Commerce Commission; and
Department of Agriculture.
These policy statements were to have been approved and implemented by July
22, 1982, and include an analysis of the impact on farmland conversions as
a result of agency actions, measures to be used by the State agencies to
mitigate such impacts, and the requirement that the greatest degree of pro-
tection be given to Class I, II, and III lands.
An Inter-Agency Committee on Farmland Preservation was formed as
directed by the Executive Order and Act. This Committee, composed of rep-
resentatives of the nine state development agencies, was created to discuss
initial problems in formulating and implementing the required policy state-
ments, and to develop guidelines for the preparation of Agricultural Impact
Statements (AISs). Other tasks performed by the Committee include the de-
velopment of a conflict resolution process and the definition of criteria
for irreversible conversion.
The Illinois Department of Agriculture (DOA) was directed by the
Executive Order to become the lead agency in enforcing farmland preserva-
tion. The DOA is responsible for reviewing the development projects pro-
posed by State agencies for compliance with the Executive Order and accom-
panying Act. To fulfill this responsibility, the DOA has prepared guide-
lines for an AIS which is conducted when a State project does not conform
to the provisions of the Executive Order and Act, and the sponsoring agency
will not or cannot bring the proposed project into compliance. The AIS is
submitted to the Governor's Office for review and consideration on funding
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of such projects. The DOA also reviews Federal government agencies' proj-
ects to assess impacts on farmland and provides comments on proposed proj-
ects. Other activities and duties of the DOA include providing assistance
to local governments in creating agricultural protection areas, providing
farmland protection information to interested parties, and providing assis-
tance to other State agencies or individuals involved in projects on behalf
of State agencies.
4.1.3. Agricultural Districts
Illinois has had enabling legislation for the creation of agricultural
protection districts since 1979. Public Act 81-1173, the Agricultural
Areas Conservation and Protection Act provides for the establishment of
such districts or areas in order to conserve, protect and encourage the
development and improvement of Illinois agricultural lands for the produc-
tion of food and other agricultural products.
The agricultural areas program initiated by this Act is based on a
county-level initiative. Local farmers may petition their county board to
establish a county Agricultural Areas Committee. Such a committee consists
of four active farmers with no more than two of the same political party,
and one member of the county board. Qualified owners of farmland may
submit a proposal for the creation of an agricultural area to the county
board. The agricultural area must be at least 500 acres in size, as com-
pact and contiguous as possible, and is established for a period of ten
years. Inclusion in the area is on a strictly voluntary basis. If the
area or any part of the area is within 1^ miles from a municipality, that
municipality must be notified. If the municipality objects to the agricul-
tural area formation, then the portions within l\ miles of the municipal
limits are excluded from the area. After a formal public notice period and
public hearing, the area is formally approved and established.
The advantage of participating in an agricultural area for Illinois
farmers is two-fold. First, land in the agricultural area is protected
from local laws or ordinances that would unreasonably restrict or regulate
farm structures or farming practices unless the public health or safety is
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endangered. Second> agricultural areas are exempted from all new benefit
assessments and special a
-------
section is contained in the ordinance which allows the operator of inten-
sive agricultural operations, such as feedlots, dairy facilities, grain
drying, etc., to submit an affidavit to the zoning enforcement officer
indicating the intensive use activity and its location. The location is
indicated on the zoning map in order to warn a potential nsarby property
buyer of the presence of such an activity.
4.2. Wisconsin
Wisconsin's efforts at agricultural land preservation have several as-
pects: the Wisconsin Farmland Preservation Program, the State Agricultural
Impact Statement Program and the Wisconsin Right-to-Farm Law. These ele-
ments are discussed below in the following sections.
4.2.1. Wisconsin Farmland Preservation Program
The Wisconsin Farmland Preservation Program is based on the Wisconsin
Farmland Preservation Act which went Into effect in December of 1977. The
program Is designed to encourage counties and other local governments to
adopt agricultural preservation plans and zoning ordinances to protect
farmland. The encouragement is achieved by offering significant state in-
come tax incentives to farmers if the applicable jurisdiction has enacted
a zoning ordinance that regulates non-farm uses or has an agricultural
preservation plan. The tax incentives increase as the county or municipal-
ity adopts stronger protection measures. The landowner applies for, and
may receive, a "farmland preservation agreement" or "transition area agree-
ment". This agreement is a restrictive covenant whereby the landowner and
the State of Wisconsin agree to hold jointly the right to develop the land.
The Wisconsin program was designed in two phases, and is now in the
second phase. During the first phase (1977-1982) individual farmers could
qualify for tax credits if they contracted with the State not to develop
their land for non-farming purposes. The second phase requires county or
other local government action (in the form of comprehensive planning and/or
zoning) in order for farmers to qualify or continue to qualify for the tax
credits.
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Landowners may qualify for participation in the program if they own 35
acres or more of land in agricultural use which produced at least $6,000 In
gross profits in the last year, or $18,000 over the past three years.
Qualifying landowners must also be residents of the State of Wisconsin.
Furthermore, qualifying landowners must hold land which is located in a
county with a certified agricultural preservation plan in effect, or else
the land must be located in an area zoned for exclusive agricultural use.
In cases where the local jurisdiction has adopted a certified exclusive
agricultural use zoning ordinance, a landowner may apply for a farmland
preservation agreement only if the land is in an area zoned for exclusive
agriculture.
Under the first phase program (until a county enters the second stage
of the program), farmers whose land is included in the program are eligible
for tax credits against their State income tax. The amount of the credit
is based on the household income level, and whether or not the county has
an agricultural plan, exclusive agricultural zoning, or both. Under the
second phase program, different conditions must be met by farraowners in
rural counties and urban counties. In rural counties, which are defined
as having a population density of 100 persons per square mile or less, a
farmer can qualify for:
a. 70 percent of maximum tax credit if the county has an agricultural
preservation plan and the farmer signs a long-term contract;
b. 70 percent of maximum tax credit without signing a contract if
the county adopts exclusive agricultural zoning and the farm is
so zoned;
c. 70 percent of maximum tax credit if the county has an agricul-
tural preservation plan and if the farmowners in the identified
transition areas sign a special transition area contract;
d. 100 percent of the tax credit without signing a contract if the
county has both zoning and an agricultural preservation plan.
e. 70 percent of the maximum level of credit if the county has an
agricultural preservation plan and if the town has adopted its
own exclusive agricultural zoning orginance (approved by the Land
Conservation Board (LCB) and the land is located within an exclu-
sive agricultural zone; and
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£. 70 percent of the maximum level of credit of the county has no
zoning ordinance, yet the town adopts an exclusive agricultural
zoning ordinance (certified by the LCB), the land is located
within an exclusive agricultural zone and the farmowner signs a
long-term contract.
In addition, a simple tax credit based on ten percent of the total
property taxes up to $6,000 of property taxes (or $600 credit) is
available for the farmer located in an exclusive agricultural zone if the
farmer's Income is too high for formula credit. A long-term contract as
specified by the program has a duration for from 10 to 25, years and re-
quires a farm conservation plan to be in effect on the land during that
time or request that a plan be prepared by the local soil and water conser-
vation district and SCS. The maximum tax credits available to farmers are
indicated in Table 4-1, and are based on income level and the magnitude of
real estate taxes on farm property.
In urban counties, where population densities exceed 100 persons per
square mile, a farmer is eligible for the tax credits only if his or her
land is zoned for exclusive agricultural use; under this condition, the
farmer qualifies for 70 percent of the maximum tax credit available. If
the farm is zoned for exclusive agriculture use and is also covered by a
county agricultural preservation plan, the farmer is eligible for 100 per-
cent of the maximum tax credits. It is important to note that the exclu-
sive agricultural zoning ordinances enacted by counties and local govern-
ment units must be certified by the LCB in order to assure that the ordin-
ances meet minimum requirements according to the law.
Once a farmer participates in the program, he or she must pay a pen-
alty or rollback payment in order to be removed from the program. The
farmer is required to repay the tax credits over the preceding ten years
if any of the following situations occur: (1) the contract expires and no
new contract is signed, (2) the land is removed from the exclusive agricul-
tural zone, or (3) other actions are taken that disqualify the land from
participation in the program. In such cases, if the payment is made immed-
iately, no interest is charged, but if payment is delayed, a six percent
Interest rate is applied from the time of removal from the program. Pay-
4-7
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back Is not due until the land Is sold or developed. If a contract is can-
celled early, as agreed by the farmer, county and state, in accordance with
statutory limitations, the six percent interest rate is applied from the
time tax credits were received. Otherwise, if a farmer continues to par-
ticipate in the program, no credits are repaid. It should be noted that
farmers participating in the Farmland Preservation Program are exempt from
new special assessments for sanitary sewers, water, lights or nonfarm
drainage on land zoned exclusively for agricultural use.
The Farmland Preservation Program in Wisconsin is supervised by the
LCB which is made up of the secretaries of the State Department of Agricul-
ture, Trade and Consumer Protection, the Department of Administration, the
Department of Natural Resources, and five public members. The five public
members include three county Land Conservation Committee members designated
by the Wisconsin Land Conservation Association and two members appointed
by the Governor. The LCB allocates funds and establishes administrative
policy, certifies county agricultural preservation plans and zoning ordin-
ances, and acts on appeals and cancellations of farmland preservation con-
tracts. The Farmland Preservation Section of the Land Resources Bureau of
the Wisconsin Department of Agriculture, Trade, and Consumer Protection is
staffed by four persons who implement the day-to-day administrative func-
tions of the program including the issuing of farmland preservation con-
tracts, recordkeeping, local technical assistance, plan/ordinance review,
and providing information about the program to individuals and government
officials.
In reviewing zoning ordinances for approval in the program, the LCB
must determine that the ordinance qualifies as an "exclusive agricultural
use ordinance." The following criteria are used to assess proposed ordin-
ances :
The minimum parcel size to establish a resident or farm opera-
tion is 35 acres.
The only residences allowed as permitted uses are those to be
occupied by a person who, or a family with at least one member
of which, earns a substantial part of his or her livelihood
from farm operations on the land parcel, or is a parent or
child of the operator of the farm.
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No structure or improvement may be built on the land unless it
is consistent with agricultural uses.
Such ordinances shall be considered local ordinances and shall
provide that gas and electric utility uses are permitted as
conditional uses and do not conflict with agricultural use.
Special exceptions and conditional uses are limited to those
agricultural-related, religious, other utility, institutional,
or governmental uses which do not conflict with agricultural
use and are found to be necessary in light of the alternative
locations available for such uses.
For purposes of farm consolidation and if permitted by local
regulations, farm residences or structures which existed prior
to the adoption of the ordinance may be separated from a
larger farm parcel.
The Wisconsin Farmland Preservation program is effective in terms of
participation. As of June, 1983, a total of 22,000 farms had qualified for
tax credits resulting in approximately 4.5 million acres of farmland being
protected. One reason why the program has enjoyed such a level of success
is that it has a strong voluntary component. Participation in planning and
zoning, individual agreements and claiming tax credits is not mandatory.
However, the inclusion of an individual's property in a preservation area
of local plans and ordinances is not voluntary; rather, this determination
is based on a set of locally developed and adopted criteria.
4.2.2. Wisconsin Agricultural Impact Statement Program
Wisconsin's Agricultural Impact Statement Program has been in effect
since October, 1978, and involves the review of public projects such as
wastewater treatment plants, landfills, roadways, etc., as required by
Section 32.035 of the Wisconsin Statutes. An Agricultural Impact Statement
(AIS) is required to be prepared for projects that involve the actual or
potential use of eminent domain powers in the acquistion of an interest in
more than five acres of land from any one farm operation. The AIS typic-
ally includes a description of the proposed project, the agricultural set-
ting of the project area, an analysis of potential impacts on agricultural
activity in the area, description of proposed project alternatives, overall
recommendations concerning the significance of the project impacts on farm-
4-10
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land and farm operations and ways in which to minimize any adverse impacts.
The AIS is prepared by the staff of the Land Resources Bureau, Environ-
mental Evaluation Section of the Wisconsin Department of Agriculture, Trade
and Consumer Protection.
Acquisition negotiations with landowners cannot begin until 30 days
after the AIS has been published. AIS costs are borne by the project ini-
tiator. The major purposes of the AIS program are to insure that farmown-
ers, project initiators and other concerned parties are fully informed of
the potential agricultural Impacts of a proposed project before project
lands are acquired, and to suggest ways in which potential adverse agricul-
tural impacts of a proposed project can be reduced or avoided.
4.2.3. Right-to-Farm Law
Wisconsin's Right-to-Farm law (S.823.08 Wisconsin Statutes) was en-
acted in 1981 as nuisance legislation. The purpose of the law is to ac-
knowledge that the changes in agricultural technology, practices and scale
of operation have occaisionally created conflicts between agricultural and
other activities. The law is not intended to hamper agricultural produc-
tion or the use of modern technology, but rather to establish guidelines
for resolving these conflicts.
According to the law, if the land in question is not subjected to an
ordinance, the court may assess only nominal damages if the agricultural
use or practice is found to be a nuisance. The court may also order the
defendant to adopt different agricultural practices.
If the land in question is subjected to an ordinance, the court may
not assess any penalty against the defendent which would substantially re-
strict or regulate agricultural practices.
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4.3. Minnesota
Minnesota's efforts at agricultural land preservation has several as-
pects: The State Agricultural Land Preservation and Conservation Policy;
tax incentives through the Minnesota Agricultural Property Tax Law; the
Metropolitan Agricultural Preserves Act, the State Environmental Review
Rules, the Metropolitan Council Guidelines, and the Right-to-Farm Law.
These elements are discussed in the following sections. In addition to
these Statewide efforts, there are a few county and local zoning initia-
tives that have been enacted in order to preserve agricultural land. Exam-
ples of these county and local zoning efforts include:
The 1974 Carver County zoning ordinance limiting residential
density to one unit per 40 acres, and limiting commercial/
industrial development;
The City of Lakeville's Agricultural Preservation Zoning
District, protecting the City's prime agricultural land;
The City of Farmington's long-term agricultural zoning
classifications; and
the City of Shakopee's Comprehensive Plan supporting the
policy objective of enacting a "40 acre minimum lot agricul-
tural district in productive agricultural areas limiting
development to single family residential and farmsteads".
Furthermore, a 1980 study by the Minnesota State Planning Agency found
that 64 of the State's 87 counties had county zoning ordinances with some
emphasis on land use controls and agricultural land (Dennistoun, 1983).
4.3.1. Minnesota Agricultural Land Preservation and Conservation Policy
In 1982, the Minnesota Legislature formalized and adopted a policy to
protect farmland in the State (Minnesota Statutes Section 17.80-17.84).
Minnesota has adopted a policy of preserving agricultural land and conserv-
ing its long-term use for the production of food and other products. This
policy is accomplished by:
Protection of agricultural land and certain parcels of open
space land from conversion to other uses;
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Conservation and enhancement of soil and water resources to
ensure their long-term quality and productivity;
Encouragement of planned growth and development of urban and
rural areas to ensure the most effective use of agricultural
land, resources, and capital; and
Fostering of ownership and operation of agricultural land by
resident farmers.
Methods to accomplish this policy statement include:
Defining and locating lands well suited for the production of
agricultural and forest products, and the use of that informa-
tion as part of any local planning and zoning decision;
Providing local units of government with coordinating guide-
lines, tools and incentives to prevent the unplanned and
unscheduled conversion of agricultural and open space land to
other uses;
Providing relief from escalating property taxes and special
assessments and protection of normal farm operations in agri-
cultural areas subject to development pressures;
Development of state policy to increase implementation of soil
and water conservation by farmers;
Assuring that state agencies act to maximize the preservation
and conservation of agricultural land and minimize the disrup-
tion of agricultural production, in accordance with local
social, economic, and environmental considerations of the
agricultural community;
Assuring that public agencies employ and promote the use of
management procedures which maintain or enhance the productiv-
ity of lands well suited to the production of food and other
agricultural products;
Guiding the orderly development and maintenance of transporta-
tion systems in rural Minnesota while preserving agricultural
land to the greatest possible extent;
Guiding the orderly construction and development of energy
generation and transmission systems and enhancing the devel-
opment of alternative energy to meet the needs of rural and
urban communities and preserve agricultural land to the great-
est possible extent by reducing energy costs and minimizing
the use of agricultural land for energy production facilities;
and
Guiding the orderly development of solid and hazardous waste
management sites to meet the needs and safety of rural and
4-13
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urban communities and to preserve agricultural land to the
greatest possible extent by minimizing the use of agricultural
land for waste management sites.
Agricultural land to be protected or considered for protection in
Minnesota includes soil classes 1 through IV as identified by the SCS in
the land capability classification system and the soil survey, as well as
other land identified by a local unit of government that is in agricultural
use. "Agricultural use" in this case also includes wetlands, pasture, and
woodlands accompanying other land that is used for farming activities.
This policy legislation also established the Commissioner of the
Minnesota State Department of Agriculture (MSDA) as the person (and agency)
responsible for implementing certain portions of the requirements of the
policy. Specifically, all State agencies are required to submit the de-
tails of proposed projects or actions that would adversely affect 10 acres
or more of agricultural land to the MSDA for review. The MSDA, in negoti-
ation with the other agency, recommends implementation of the proposed
project or suggests alternatives to the project. If, atter evaluating the
alternatives, the proposing agency determines that costs of implementing an
alternative outweigh benefits to agriculture, the agency must notify the
MSDA of that determination.
4.3.2. Tax Incentives
Minnesota provides certain tax incentives to qualifying farmland
owners through the 1967 Minnesota Agricultural Property Tax Law (Minnesota
Statutes, Section 273.111) commonly referred to as the "Green Acres" Law.
The law, administered through the Minnesota Department of Revenue, provides
for deferred real property taxation as well as protection from special
local assessments as long as the land is kept in a qualified agricultural
use.
In order to qualify for this program of tax incentives, the real
estate must be at least 10 acres in size, produce at least one third of the
total family income of the owner, and must be devoted to the production of
agricultural products. Meeting these requirements, the owner may make
4-14
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application for inclusion of his or her land in the program. After accept-
ance into the program, the land is assessed at agricultural value for the
purpose of real property taxes. The farmer is also exempt from payment of
special local assessments levied on the property after acceptance.
If the eligible property is removed from the program for any reason,
the owner is required to repay the property taxes deferred over the pre-
ceeding three years, with no interest penalty if promptly paid. All defer-
red special assessments plus interest are due within 90 days of disqualifi-
cation. If not paid in 90 days, this rollback amount is penalized at a 10
percent interest rate for the current year. Property can be sold with no
payment of deferred taxes or assessments if the property continues to
qualify for the program.
4.3.3. Metropolitan Agricultural Preserves Program
In 1980, the Minnesota legislature approved the Metropolitan Agri-
cultural Preserves Act (Minnesota Statute, Chapter 473H) for the purpose of
preserving farmland in the seven-county Twin Cities metro area. The Act
and supporting program are designed to provide a means by which lands in
the metropolitan area, designated for long-term agricultural use by local
and county government, will be taxed in an equitable manner, protected from
special local assessments, protected from unreasonably restrictive State
and local regulations of farm practices, protected from the taking by emi-
nent domain, and given the protection and benefits required to maintain
viable farm operations in the metropolitan area.
The Metropolitan Agricultural Preserves Program is a voluntary program
administered by local governmental units. Local governments are first re-
quired to prepare a comprehensive plan for their jurisdiction and enact a
zoning ordinance that provides zones for long-term agricultural use. Upon
completion and approval of the planning and zoning phase, land zoned for
long-term agricultural use is eligible for agricultural preserve status.
The farmland owner must apply to have his or her land placed into preserve
status and must agree by written covenant that the land will be kept in
farming use indefinitely for at least a minimum of eight years. Either the
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farmland owner or the local governmental unit can initiate the process to
end the agricultural preserves status of the farmland.
In order to be eligible for the program, long-term agricultural land
comprising 40 or more acres is required. Noncontiguous parcels may be used
to achieve the minimum acreage provided each parcel is at least 10 acres
and all parcels are farmed as a unit. Under certain conditions, acreages
smaller than 40 acres are allowed. When approved for inclusion as an
agricultural preserve, land must be maintained for agricultural production
and the average maximum density of residential structures within the pre-
serve cannot exceed one unit per 40 acres. When a separate parcel is
created for a residential structure, as allowed above, the parcel ceases to
enjoy the protection and advantages of the program, but the residential
unit continues to be included in the maximum residential density for the
original preserve.
Eligible farmland owners receive six specific benefits for partici-
pating in the program, as set forth in the Metropolitan Agricultural Pre-
serves Act. First, real property within an agricultural preserve is valued
according to the Green Acres Law described previously. Second, a maximum
amount is placed on total tax rates not to exceed 105 percent of the state-
wide average mill rate in town for all purposes (Section 473H.10). Third,
because construction projects for public sanitary sewer systems and public
water systems benefiting land or buildings in agricultural preserves are
prohibited, as are new connections to existing systems, special assessments
for such improvements are also prohibited (Section 473H.11). Fourth, local
governments and counties are prohibited from enacting ordinances or regula-
tions within an agricultural preserve that would unreasonably restrict or
regulate normal farm practices or structures, unless most activities bear a
direct relationship to public health and safety (Section 473H.12). The
fifth benefit to participating farmers is protection from taking by eminent
domain. Before such land can be taken for public use a lengthy review pro-
cess must be completed which includes an analysis of alternatives (Section
473H.15). The final benefit is protection from annexation by nearby munic-
ipalities without approval by the Mlnnesoata Municipal Board.
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4.3.4. Minnesota Environmental Review Program
The Minnesota Environmental Review Program was created in the revised
rules of the Minnesota Environmental Quality Board. Section 6 MCAR 3.038.
AA.4 of these rules requires that an environmental assessment worksheet
(EAW) be prepared by the local unit of government for projects resulting in
the permanent conversion of 80 or more acres of agricultural land to a more
developed land use. The Minnesota EAW is analagous to the NEPA environmen-
tal impact assessment in its scope and purpose. The EAW form includes
prime and agricultural land among its list of sensitive areas. The effects
of a proposed project upon prime agricultural land are addressed during the
preparation of EAWs for projects to which 6 MCAR 3.038AA does not apply.
4.3.5. Metropolitan Council Guidelines
The Metropolitan Development Guide is a compilation of policy state-
ments, goals, standards, programs and maps to guide an orderly and economic
development of the metropolitan Minneapolis/St. Paul area. The Guide's
chapter on the Develop-Framework gives specific policies for the Rural
Service Area. The Rural Service Area is broken into three major regions:
(1) Commercial Agricultural Regions, (2) Rural Centers, and (3) General
Rural Use Regions. Long-term preservation of agriculture is encouraged in
the Commercial Agricultural Regions. These regions are characterized by
prime agricultural soil, a strong agricultural economy and a lack of urban
development. Rural Centers are basically rural trade center, accommodating
moderate-sized residential and commercial developments. General Rural Use
Regions consist of agriculture, parks, hobby farms and residences. Commer-
cial farms are encouraged to remain in these areas.
There are two specific Metropolitan Council policies which address
development in the Rural Service Area. These policies are as follows:
Metropolitan Council Policy No. 19; Metropolitan sewer
service and urban level transportation service will not be
provided to the Rural Service Area. This policy is consis-
tent with the council's position that the Rural Service Area
should not accommodate large amounts of development. Rather,
these large developments should be located in the Urban
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Service Area, where there are sufficient services and land
to accommodate new growth.
Metropolitan Council Policy No. 20; Local units of govern-
ment located at least partly in the Metropolitan Rural
Service Area must adopt comprehensive plans and implementa-
tion programs which are consistent with regional policies
and plans, and with the policy identified above (MCP No.
19). Plans determine if any lands located within a local
government's jurisdiction are suitable for long-term agri-
cultural use. Suitable lands are further protected by
specific planning and zoning ordinances. Lands not deemed
suitable for long-term agricultural use are considered as
General Rural Use Areas.
4.3.6. Minnesota Right-to-Farm Law
The Minnesota Right-to-Farm Law was enacted in 1982, and amended in
1983, as the Nuisance Liability of Agricultural Operations (Section 561.19
of the Minnesota Statutes). According to this law, an agricultural oper-
ation which is part of a family farm cannot be considered a nuisance after
six years of operation if the farm was not considered to be a nuisance at
its established date of operation. The provisions of this nuisance law do
not apply, however, to negligent or improper operation of equipment, or to
threats to public health or safety, or pollution of the environment.
4.4. Michigan
Michigan's efforts at agricultural land preservation are focused on
the State Farmland and Open Space Preservation Program, as described below.
4.4.1. Michigan Farmland and Open Space Preservation Act
Michigan's farmland preservation program is based on the Michigan
Farmland and Open Space Preservation Act, passed in 1974. The program is
centered around a modified transfer of development rights program in which
the title to the land does not change hands. This "transfer" is accomp-
lished by a legally binding development rights agreement held Jointly by
the landowner and the State. In simpler terms, a farmer signs a contract
with the State in which he or she agrees not to develop the land in ques-
tion for 10 years or more. In turn, the farmer can claim a special state
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income tax credit for the amount by which the property tax exceeds seven
percent of the household income; in addition, the farmer's land is exempt
from special assessment taxes.
The Farmland and Open Space Preservation Program is administered by
the Michigan Department of Natural Resources. Participation in the program
is completely voluntary on the farmer's part, but must be approved by the
State and the local governing body having jurisdiction, and reviewed by the
county planning agency, the regional planning agency, and the district
office of the soil conservation agency. Farmland eligibility requirements
require the farm meet one of the following three conditions: (1) be 40
acres or more, in one ownership and devoted solely to agricultural use; (2)
be five to 40 acres in size and have a gross income from agriculture of
$200 per year or more per acre; or (3) be designated by the Department of
Agriculture as a specialty farm. With acceptance into the program, the
farmer basically agrees to the following constraints:
A structure shall not be built on the land except for use
consistent with farm operations or with the approval of the
local governing body and the state land use agency;
Land improvements shall not be made except for use consistent
with farm operations or with the approval of the local govern-
ing body and the state land use agency;
Any interest in the land shall not be sold except a scenic,
access, or utility easement which does not substantially
hinder farm operations;
Public access shall not be permitted on the land unless agreed
to by the owner; and
Any other condition and restriction on the land as agreed to
by the parties that is deemed necessary to preserve the land
or appropriate portions of it as farmland.
The farmer must also notify the State and local government body holding the
development rights two years prior to the termination of the contract of
his or her intentions regarding future plans with respect to the land.
In return for restricting development rights on the land, the farmer
is protected from the imposition of special assessments for sanitary sew-
ers, water, lights, and non-farm drainage systems. A tax credit, in the
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form of a circuit breaker credit, is applied to the farmer's state income
tax in the amount by which the real property taxes on the farm and farm
buildings exceed seven percent of the household income. If the credit ex-
ceeds the farmer's tax liability, he or she receives an income tax refund
for the difference.
The State may relinquish the agreement if it determines that furute
development of the land is in the public interest. The landowner pays no
back taxes. The landowner may request relinquishment following the same
procedures as those used to create the agreement. If the request is ap-
proved, he or she is liable for all income tax credits received, plus six
percent compound interest. If the agreement expires according to its
terms, the landowner then is liable for the last seven years of credit
without interest. If an owner knowingly converts the land to an ineligible
use without first going through the procedures outlined above, he or she
may be enjoined by the State or the local governing body, and subjected to
a civil penalty for actual damages, not to exceed twice the land's fair
market value at the time the application for the development rights agree-
ment was approved.
While the program has not stopped the conversion of Michigan farmland
to other uses, it has removed a sizeable portion of its available farmland
from the threat of conversion. As of 1980, over 1.5 million acres of farm-
land were protected by the program. This acreage amounts to approximately
16 percent of all eligible farmland in the State. The average contract
period is about 20 years, indicating the farmers' willingness to make a
long-term commitment to farmland preservation. Approximately 40 percent of
the farmland in Michigan's metropolitan areas has been enrolled in the
program (Conway in AG-70).
4.5. Indiana
Indiana has no coordinated statewide program to encourage farmland
preservation. There are, however, incentives available to farmers in the
form of tax incentives and an agricultural nuisance law. Agricultural
zoning is also available to farmers in the form of tax incentives and an
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agricultural nuisance law. Agricultural zoning Is also available at the
county and local level (Stevens 1983).
4.5.1. Tax Incentive
The tax Incentive offered to farmers is in the form of a preferential
assessment of land for real property taxation purposes at the land's cur-
rent use value. This law, enacted in 1961, stipulates that all land in
agricultural use is automatically assessed at its current use value. The
Indiana law differs from most other states' laws because there are vitru-
ally no restrictions or special requirements necessary to take advantage of
the program. As long as the tax assessor classifies the parcel of land in
agricultural use, the owner will be assessed taxes based on that use.
4.5.2. Right-to-Fanu Law
Public Law 199 restricts nuisance suits against farmers. The law,
enacted in February, 1982, states that no agricultural operation can be
classified as a private or public nuisance after it has been in existence
and in operation continuously for more than one year provided:
there is no significant change in the hours of operation;
there is no significant change in the type of operation; and
the operation would not have been a nuisance at the time the
agricultural operation began in that locality.
This law also applies to industrial operations and does not apply where a
nuisance results from the negligent operation of the farm.
4.5.3. Zoning
Agricultural zoning is available at some local jurisdiction levels in
Indiana. However, only one county presently has an agricultural zoning
ordinance in effect (St. Joseph County). Because there is no State plan-
ning/development agency in Indiana, no coordinated program of assistance
is available to counties and municipalities to help establish agriculture-
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protecting zoning. Any preservation activities must be instigated at the
local level, although the Indiana Division of Agriculture does provide
assistance to county governments to help evaluate growth using the Soil
Conservation Services' Land Evaluation and Site Assessment System (Stevens
1983).
4.6. Ohio
Two items of legislation comprise Ohio's efforts to preserve farmland.
These efforts are a tax deferral program and an agricultural districts
program.
4.6.1. Tax incentives
Ohio's tax deferral program (Section 5713, Revised Code), enacted in
1974, is typical of tax incentive programs enacted by many other states.
Eligible farmland owners may apply to have their land assessed for real
property tax purposes at the land's agricultural use value instead of its
fair market value. When such land becomes disqualified, the farmer must
pay back all taxes deferred over the preceeding four years. No interest
penalty is applied if deferred taxes are repaid in a reasonable amount of
time.
4.6.2. Agricultural Districts
The Ohio agricultural district program (Chapter 929: Ohio Code Supple-
ment) was enacted in June of 1982. The program consists of the establish-
ment of voluntary agricultural districts and is administered by the County
Auditor's office in each county. Farmers who participate in the program
receive exemption from special assessments on their farmland, protection
from most nuisance suits, and protection from taking by eminent domain and
other actions by public entities which may lead to the loss of farmland,
for a period of five years.
To qualify for agricultural district status, land must be used exclu-
sively for agricultural purposes and be over 30 acres or else have produced
an annual gross income of $2,500 over the preceding three years. The
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farmer must apply for inclusion In the district with the County Auditor and
the Clerk of the Municipal Corporation if such land is under petition for
annexation by the municipality
Once accepted and approved as an agricultural district, the land is
exempted from special assessments for the purpose of sewer, water, or
electrical service on the real property. If the property is disqualified
or is withdrawn from the district program, all deferred assessments plus
interest become due.
Civil action for nuisances involving agricultural activities are ex-
cluded in agricultural districts provided the agricultural activities were
established first and these activities are not in conflict with Federal,
State, and local laws and rules. This law serves to protect farmers in
agricultural districts from nuisance suits involving normal agricultural
operations.
Land in Ohio's agricultural districts is also protected from indiscri-
minate taking through eminent domain. No public or private entity can
advance a grant, loan, Interest subsidy, or other distribution of public
funds for the construction of housing, commercial or industrial facilities
to serve non-agricultural land uses within an agricultural district. Any
project requiring 10 acres or more of land in an agricultural district must
be reviewed by the Ohio Department of Agriculture to determine the proj-
ect's potential effect on both agricultural production in the district, and
on the policies, plans, objectives, and programs of Other State agencies or
local governments. If this review identifies adverse impacts to agricul-
ture, a public hearing process is initiated. If the sponsor of the pro-
posed project does not withdraw or alter the project according to recom-
mendations, the Director of the Department of Agriculture may institute a
civil injunction to stop the project.
Because the Ohio agricultural district is relatively new, no conclu-
sive statements can be made about its effectiveness at this date.
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5.0. AGRICULTURAL LAND PROTECTION PROGRAMS USED IN OTHER STATES
5.1. Oregon's Agricultural Land Protection Program
The protection of agricultural lands is one of the primary objectives
of Oregon's Land Use Program. In 1973, the State Legislature enacted
SB 100 which provided the enabling framework for a statewide comprehensive
planning program. This law created the Land Conservation and Development
Commission (LCDC) which has the responsibility to coordinate the prepara-
tion of comprehensive plans in Oregon. SB 100 requires every city and
county in the state to prepare and adopt a comprehensive plan.
The LCDC developed a set of mandatory planning goals with which every
city and county comprehensive plan and accompanying zoning and subdivision
ordinance must comply. Planning Goal 3, entitled Agricultural Lands, is
the basis of the Oregon Agricultural Lands Protection Program. Goal 3
includes the following seven elements:
1. Policy statements on the economic and environmental value of
agricultural lands;
2. A definition of the agricultural lands to be inventoried and
protected;
3. The specific uses that are allowed on these lands;
4. Land division standards;
5. Exceptions for the conversion of agricultural lands;
6. Special benefits to the protected lands;
7. The limitation of urban growth in rural areas.
The following sections describe these elements in more detail.
5.1.1. Policy Statements
The Oregon Legislature, in 1973, prepared a major revision of the farm
use tax deferral system and approved the Agricultural Land Use Policy
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(ORS 215.243). The four basic elements of the policy are as follows: (a)
Agricultural land is a vital natural and economic asset for the people of
the State; (b) Preservation of large amounts of agricultural land in large
blocks is necessary to maintain the agricultural economy; (c) Expansion of
urban development in rural areas is a public concern because of farm and
urban activity conflicts; and (d) Incentives and privileges are justified
to owners of land in exclusive farm use zones because such zoning limits
alternative use of that land. Goal 3 implements this policy by requiring
these lands be inventoried and preserved by adopting Exclusive Farm Use
Zones (EFU) pursuant to ORS 215.
5.1.2. Definition of Agricultural Lands
The definition of those agricultural lands which must be protected in
Oregon is one of the most controversial elements of the preservation pro-
gram. Goal 3 defines "agricultural lands" as those lands of SCS Class
I-IV soils and other lands suitable for farm use. This definition essen-
tially includes all suitable agricultural land, not just prime farmlands.
By broadly defining agricultural lands, Goal 3 attempts to end debate over
whether or not a parcel of land is good or marginal, or if a commercial
farming operation can be supported by the land. A resource Inventory of
these soil types is an important component of this definition, this inven-
tory is used in determining if the land is available for farm use or has
already been committed to non-farm use.
5.1.3. Uses of Agricultural Land
Agricultural land preserved by the EFU zone designation resembles an
agricultural district more than the familiar urban zoning system. This EFU
designation encourages and protects farm uses and also allows a variety of
non-farm uses such as schools, churches, agri-business activities, and home
occupations. Non-farm residential uses are generally prohibited; however,
in cases where the dwelling(s) does not interfere with farm activities and
is located on land that is unsuitable for farm use, such uses may be al-
lowed .
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5.1.4. Land Division Standards
An important factor in preserving agricultural activities is the land
division standards that are used. In Oregon, this approach has been to re-
quire that the land division sizes be appropriate for the continued exist-
ence of commercial agricultural enterprise. Because of the different
scales of commercial farm activities in the State, a statewide minimum
standard could not be used. Instead, standards have been developed by
individual counties to account for the differences in soil types and cli-
mate in various parts of the State.
5.1.5. Exceptions
In order to convert agricultural land to non-agricultural uses, a spe-
cific procedure must be followed. Four criteria must be considered before
the conversion is allowed. These criteria are: (1) need; (2) alternative
locations; (3) impacts; and (4) compatibility with farming. The determin-
ation of need must not be based solely on the continuation of growth trends
nor the market demand for rural non-farm uses.
5.1.6. Benefits for Protected Lands
Two specific benefits are extended to those lands protected by Ore-
gon's EFU zones. The first benefit prohibits the State or local government
from adopting ordinances that interfere with or regulate "accepted farming
practices." Such practices normally cause noise, dust, or odors. However,
this clause does not restrict the governing body's ability to protect the
health, safety, and welfare of its citizens.
The second benefit is the provision of certain tax benefits to the
owners of agricultural property. Land which is both zoned "EFU" and con-
tinually farmed is appraised at its farm use for property and inheritance
tax purposes. Such lands are also exempt from special district and rural
service assessments including sewer, water, and solid waste. This link be-
tween zoning and special tax treatment is essential to the success of an
agriculture preservation program because it provides a balance between the
public and private interests in the use of agricultural lands.
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5 1.7. Encouragement of Growth in Alternative Areas
Any successful agricultural land protection program must recognize
that development limited in one area must be provided for and encouraged in
other areas. The Oregon program requires every city in the State to estab-
lish an urban growth boundary that includes enough urban or non-resource
lands to accommodate the community's housing, commercial, and industrial
needs up to the year 2000. In order to discourage urban sprawl, the urban
growth boundaries must not include land beyond projected need, and in many
instances, cities have placed vacant land within urban growth boundaries in
holding zones in which agriculture or open space is the only permitted use.
Vacant land in such holding zones can only be converted to urban land uses
after the need for such uses occurs. .
5.2. Maryland Agricultural Land Preservation Foundation
The Maryland Agricultural Land Preservation Foundation was authorized
in 1977 by the Agricultural Land Preservation Foundation Act (Agriculture
Article, Section 2-501 et req.). The purpose of the program is to allow
the establishment of agricultural preservation districts in which the sub-
division and development of agricultural land would be prohibited. Farm-
land owners can voluntarily petition the Foundation and the governing body
in their county to establish an agricultural preservation district. The
agricultural preservation district is established for a five-year duration.
Additionally, members of such districts can sell or donate easements, which
prohibit development of non-agricultural uses for a minimum of 25 years.
In order to participate in the program, each county must appoint a
five-member Agricultural Preservation Advisory Board. The Board advises
the county governing body on the formation of agricultural districts and on
the approval of easement purchases. Furthermore, the Board formulates
local priorities for agricultural land preservation, including the required
county-level right-to-farm ordinance.
The easements to be purchased by the Foundation specify the prevention
of development, prohibition of dumping of trash and other materials, and
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the displaying of most signs and billboards. These easements also require
that sound agricultural, soil, and water conservaton activities be carried
out. Easements purchased by the Foundation are to be held for as long as
profitable farming is feasible, which is the sole criterion for termination
decisions. Easements may not be reviewed for possible termination sooner
than 25 years after the date of institution.
In order to sell an easement, the landowner must make written applica-
tion to the Foundation, including in the request the owner's asking price.
For such an offer to be considered by the Foundation, the county governing
body must approve the application. The county governing body bases its
decision upon an evaluation of the land in light of current local regula-
tions, patterns of development, and priorities for the preservation of
agricultural land.
The Foundation assigns highest priority for purchase to those easement
offers in which the ratio of offering price to appraised value is lowest.
The appraised value is the maximum amount which the Foundation is allowed
to pay. By buying only those easements which are offered at the lowest
relative prices, the Foundation will, in effect, provide partial compensa-
tion in an amount which is acceptable to the landowner.
Maryland's Agricultural Land Preservation Program went into effect in
1979, when regulations for the program were adopted by the Foundation. In
the initial year and a half of operation, participation was substantial.
By mid-1980, a total of 100 agricultural districts had been created con-
taining over 22,200 acres and 158 properties in 13 counties. All counties
in the State had established Advisory Boards and many had passed local ord-
inances protecting farm operations within districts from nuisance actions.
Offers to sell easements to the Foundation had been received on 11,500
acres at an average asking price of $1,100. Because of funding restraints,
Maryland's easement purchase program by itself will not be enough to main-
tain the State's agricultural resource base. Clearly, this program entails
a high level of public costs, but the result is long-term protection of
those lands covered by the program.
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6.0. QUANTITATIVE METHODS FOR ASSESSING IMPACTS TO AGRICULTURAL LAND
The assessment of Impacts of a particular project or program on agri-
cultural land is difficult because of the many qualitative, quantitative,
and political considerations that are Involved. There are even those who
claim that conversion of agricultural land is not an important issue be-
cause, in the final analysis, the economic law of supply and demand will
cause existing market forces to preserve the necessary amount of agri-
cultural land. Regardless of these contentions, quantitative methods can
be used to gauge the desirability of using agricultural land for other
uses. These methods range from generally informal methodologies that are
based solely on the quantity and quality of farmland that would be con-
verted, to the more formalized approach developed by the U.S. Department of
Agriculture's SCS. These methods are summarized below in this chapter.
6.1. Agricultural Land Evaluation and Site Assessment
The SCS, as part of the Federal policy to protect farmland, has devel-
oped a system for assessing the importance of farmland. This system is
called the Agricultural Land Evaluation and Site Assessment (LESA). LESA
was developed with the input of state and local government officials be-
cause it is designed for use at the county and/or municipal level. These
levels of government can use LESA for: (1) identifying specific parcels or
areas of land that should be set aside for agricultural use; (2) justifying
the retention of a specific site in agricultural use; (3) determining the
optimum minimum parcel size for farmland subdivision; (4) planning public
projects such as roadways, sewers, or water systems; and (5) creating
guidelines for the conversion of farmland to other land uses.
This methodology consists of two major parts: the evaluation of the
quality of land for farming purposes and the assessment of sites in terms
of their economic and social viability for use in farming operations. The
assessment of sites for social and economic factors is accomplished at the
local level, usually by planning agencies, while SCS computer programs are
used to provide an evaluation of the quality of farmland. The following
sections summarize the basic components of each major part of the LESA
method.
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6.1.1. Farmland Evaluation
The farmland quality evaluation process, as developed for LESA, con-
sists of several factors including: land capability, the rating of import-
ant farmland soil, soil productivity, and soil potential. The soils are
evaluated according to the four classifications below:
Land capablltty cla sses. The USDA developed this system of
classifying soils according to their crop-production restric-
tions, landscape form, and potential for field crops or pas-
ture. Eight classes of soil are identified with subclasses
according to more detailed limitation characteristics. For
example, a Class I soil has few limitations that restrict its
use, while a Class VIII soil may be totally useless for agri-
culture.
Farmland importance. Four groups of important farmland have
been Identified by the USDA. These groups include prime farm-
land, unique farmland, farmland of statewide Importance, and
farmland of local importance. Definitions of these farmland
types are available from the SCS.
Soil productivity. The productivity of soil is based on the
expected crop yields per acre using specific management prac-
tices.
So il po t en t1al. This factor is used to indicate the relative
quality of soil for a specified use in comparison to other
soil types in the area. Soil potential ratings are used as an
alternative to the soil productivity rating.
Using these factors, assistance from local soil experts, and the SCS
soils information printout, local decision makers set up a soils ranking
system. The soils are ranked into about 10 agricultural groups, depending
on local conditions. Each group encompasses from five to 15 percent of the
available land in that local jurisdiction. A relative value of each agri-
cultural group is then assigned by adjusting the average yield of each
group so that the group with the highest yield would have a value of 100,
while the lowest yield group would have a zero value.
6.1.2. Site Assessment
The site assessment, the second major part of the LESA methodology, is
designed to identify farmland that Is both economically viable and has the
highest potential for continued agricultural production. Seven factors are
considered in the site assessment process:
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* Land use. Elements considered in this category include the
percentage of land used for commercial agricultural production
within a given radius, the percentage of the site commercially
farmed in two of the preceding 10 years, and the land uses
adjacent to the site.
Agricultural viability. Elements considered here include the
size of the farm, land ownership patterns, existing infra-
structure serving the site, improvement on the site (barns,
ponds, drainage systems, irrigation, etc.), and the impact on
nearby farms if conversion takes place.
Land use regulations/tax incentives. Elements considered in
this category are the current zoning of the site, the sur-
rounding land uses and the presence or absence of agricultural
' districts in the area.
* PEOjecfsite alternatives. An examination is made on the
availability of less productive land that could potentially
use the proposed project.
* Compatibility. The compatibility or impact of the proposed
project on the surrounding environment is examined to deter-
mine possible impacts on wetlands, historic areas, cultural
resources, unique vegetation, or floodplains.
Consistency with plans. The compatibility of the proposed
project with comprehensive development plans for that area is
determined.
Urban Infrastructure. The distance to urban areas, water and
sewer systems, jobs, schools, and shopping is considered.
The local decision makers may choose the appropriate factors for the
locality and assign an overall weight to each factor. Each factor is then
broken down into intervals that are indicative of the traits that sites in
the area might display:
Land in agricultural use within one half mile
90 - 100 percent
70 - 89 percent
40 - 69 percent
less than 39 percent
Each interval is assigned a point value. When a particular site is as-
sessed, its characteristics are rated according to the interval point
values of each factor. The point value is multiplied by the factor's
weight and then summed for all factors. The resultant number is indicative
of the particular site's importance within the locality's overall land use
and farmland preservation goals.
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Finally, the score developed from steps one and two of the LESA pro-
cedure are combined and compared to the locally predetermined ranges.
These ranges are set up to indicate whether or not a site should be pre-
served for agriculture or be converted to other uses. Because these ranges
are locally developed, they are sound devices that should give the decision
makers a defensible basis for making such an important land use decision.
The SCS has conducted pilot programs to test the LESA system in 12
counties in six states. Only minor problems have been encountered in using
LESA thus far. In all cases these problems are easily resolved and the
systems works well.
6 U.S. GOVERNMENT PRINTING OFFICE: 1984-756-893/436
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DATE DUE
U.S. E-svironmr-r,'.;,! rvc.:f-i'on Agency
Region V, Li'^ra^'
230 South De^j-;;n : t::i
Chicago, Illinois 60604
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