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What’s At Stake?
Over the past 40 years, Vermont made substantial investment and progress in farmland conservation, permanently conserving 15-20% of the state’s farmland.1 Farmers have greatly benefited from ongoing, coordinated conservation efforts, yet threats to farm viability in the state continue to loom large. At least 3,000 Vermont farms and many more acres of high-quality agricultural soils are not conserved.2 Over the next five years, as many as 300 Vermont farms (conserved and not-conserved) may change hands as existing farmers retire. If managed strategically, these transfers could lead to the next generation of vital farms and strengthen Vermont’s rural economies. If not, land farmed for generations could sit fallow, become less productive, or be lost to development. The COVID-19 pandemic has shed light on the urgency of securing our agricultural land base in order to support a more localized food supply.
Current Conditions
Farmland conservation is one of the best ways to protect Vermont farmland from development, keep it in production, ensure localized food production capacity in case of emergencies, and maintain an economically viable agricultural sector.
Land is conserved with a legal document called a conservation easement (typically held by a land trust) which permanently limits development, restricts subdivision, and protects natural resources. This is also known as “sale of development rights,” as landowners are usually compensated for the loss of the potential income from development (though some donate or partially donate this value). Conservation easements generally reduce the land’s appraised value and can impact a future sale price. In Vermont, the Option to Purchase at Agricultural Value (OPAV) tool is typically part of the conservation easement, to keep land affordable for farmers with commercial agricultural operations and discourage conversion of good farmland into estate-type properties.
Selling development rights is a critical economic tool for Vermont farmers, allowing them to sell a legal asset while still retaining ownership of the land, and use sale proceeds to expand, diversify, invest in new infrastructure, buy more land, and/or facilitate a family transfer. Despite its social, agricultural, and economic benefits, land conservation is also challenging. Not all farmers want or are able to conserve their land. The demand for funding to purchase development rights far exceeds the supply, despite years of relatively stable federal and state funding for farm easements.
Permanent farmland protection plays a critical role in the economic transformation and ownership transitions that Vermont agriculture is facing, but conservation alone will not ensure the survival of Vermont’s agriculture sector. Fortunately, Vermont’s farmers, land trusts, agricultural lenders, and service providers are well-coordinated, and share key goals around the successful transition of Vermont’s agricultural economy to the next generation, responsible land stewardship, and the importance of farm viability.
Conservation of Farmland
Funders and land trusts use established criteria to assess a land parcel’s resources (e.g., soils, water, special ecological attributes), development threat, and proximity to other conserved parcels, as well as the plans for the farm operation. The land is appraised to determine the current value with full development rights and the value after conservation with limited development rights. The easement value, and financial compensation to the landowner, is the difference between the two.
- For the past several years, the Vermont Housing & Conservation Board (Vermont’s primary funder of farm easements) has typically funded 20 to 22 farm projects each year, protecting about 3,000 acres.
- $2.7 million in state funding each year (on average) leverages $3 million in federal dollars through the Natural Resources Conservation Service (NRCS) and $1 million per year in philanthropic and local funds, as well as landowner bargain sales.
- VHCB’s current conservation pipeline has 40 projects waiting to be funded with a value of over $9 million of easement funding.
The amount of farmland expected to transfer creates a tremendous opportunity to conserve more acres, add ecological protections and affordability options to already-conserved land, help new or beginning farmers gain access to the transferring land, or expand existing businesses. Conservation during a sale process can be a powerful tool to make land more affordable for a new owner, and if the property is already conserved, it may be more affordable than non-conserved parcels.
Conservation alone does not ensure land will remain actively farmed and productive. Farmland needs to be able to transfer viably from one owner to another in order to stay productive. Keeping Vermont’s conserved (and non-conserved) farmland in active, economically viable operation requires a healthy agricultural economy with robust market opportunities, technical and business support, and policies that incentivize active farming (e.g., the Use Value Appraisal program).