Agricultural Producers

Use and Fund Conservation Easements to Protect Farmland

Who can implement this: State, county, and city officials; communities; governmental organizations; advocacy organizations; and agricultural producers

To protect land for future generations, state and local policymakers should work together to fund conservation easements. A conservation easement is a legally binding agreement that restricts the uses of land and/or prevents a piece of property from being developed. It limits certain rights—often the owner’s right to subdivide or develop—associated with that property. A private organization or public agency then enforces the landowner’s promise not to exercise the restricted rights. Landowners essentially forfeit these restricted rights in perpetuity, but in certain cases, conservation easements can be established for finite periods of time, though these short-term easements tend to be continually renewed.[1]

An easement selectively targets and restricts only those rights necessary to protect specific conservation values and is individually tailored to meet a landowner’s and community’s specific needs. Because the land remains privately owned with the remainder of the rights intact, an easement property continues to provide economic benefits through its association with job creation, economic activity, and property taxes.

Conservation easements operate similarly to transfer of development rights programs, except that the development rights need not be evaluated by a government agency and sending and receiving areas do not need to be established. Landowners either voluntarily donate or sell an easement, which allows them to trade a portion of their property value for a significant one-time income or tax benefit while still retaining many private property rights. A landowner and an easement purchaser, typically an agency, negotiate the fair market value of the development rights being restricted, and then those rights are sold and documented via the recording of a conservation easement.

Donating conservation easements is considered a charitable donation under the federal tax code, and those who donate are eligible for federal income tax deductions. In 2015, the U.S. Congress enacted an enhanced federal tax incentive for conservation easement donations, which, depending on the value of the easement, permanently increased the tax deductions possible for landowners.[2]

Conservation easements can shield farmers from pressures to sell land to developers and allow them to continue their farming operations or retire with significant income, passing their agricultural operations to those who will continue farming on the land. The reduction in property value resulting from the conservation easement makes selling the land to a farmer, rather than a developer, more feasible.

Conservation easements should be created only on lands that are likely to be viable farms for many years to come. Otherwise, the easement will serve to only restrict development without guaranteeing continued food production.

Because of the limited funding available for conservation easements, it is also important to target the most irreplaceable lands, such as orchards, for preservation.

Implementation:

Although a number of private and public organizations are already involved in managing conservation easements in Utah, Utah County may want to charter its own agricultural land trust with a board of directors comprising local farmers and others. Such a trust would preserve local control of easements. The trust could seek and hold funding, buy development rights of farmland, advise county officials on a variety of agricultural issues, and coordinate with all conservation districts in the county.

  • Existing government and nonprofit organizations should work together to specifically treat agriculture as a valuable resource by promoting conservation easements in Utah County.
  • The Utah Legislature should explore new and existing options and implement long-term mechanisms for buying conservation easements on critical farmland best suited for long-term agricultural production.

The biggest challenge to establishing conservation easements is funding. Below are several options for providing a large and reliable pool of money for conservation easements.

Funding Options for Conservation Easements:

  • Roll-back taxes - When greenbelt designated farm lands are removed from agricultural use, invest the required “roll-back” taxes into a county farmland fund such as one managed by a county agricultural land trust as suggested above. The rollback tax is the difference between the lower taxes paid while the land had greenbelt designation and the taxes which would have been paid without the designation.
  • Property tax fraction - Apply some fraction of the county's share of property taxes to a farmland fund. This funding option could be limited to years with adequate or increased tax receipts to minimize impact on other county responsibilities.
  • Federal matching grants - The 2014 Farm Bill made billions of federal dollars available dedicated to match other conservation funding used to protect farmlands, ranchlands, grasslands, wetlands, and forests across the country. This federal bill and many other funding agencies require matching funds, usually at a 1:1 ratio. The county should therefore set up a mechanism such as the agricultural land trust mentioned above to attract, hold, and manage the funds required to match federal and other available funds.
  • Bonding - Allow county voters to vote on a bond issue for farmland preservation. Critical wildlife and/or recreation areas could be included in the bond if that is more attractive politically. The Trust for Public Lands can advise on the best ways to publicize and organize how to pass such a bond.
  • Tax credits – The Utah legislature could pass a bill awarding state tax credits to those who contribute to a conservation easement.
  • Real estate transfer taxes: To purchase conservation easements, many counties across the country rely on taxes that are generated as a percentage of real estate sales. In Utah, the price of real estate transactions is not disclosed. However, sales are public information, and a small fee could be applied to real estate transfers based on a county assessment before the sale. This tax would essentially require those who benefit from destroying agricultural land to pay a fee to help preserve it in other places.
  • Sales taxes - The state legislature has made attempts to pass a bill allowing for a local sales tax of 1/8 of 1% on the purchase of agricultural land and conservation easements for open spaces.
  • Special district taxation: If agricultural conservation districts were established as “special districts,” they would be authorized to tax or spend public funds that receive tax-exempt status.

The LeRay McAllister Critical Land Conservation Fund provides grants to support the conservation of critical agricultural lands, wildlife habitats, and other lands vital to different communities across the state. This fund is highly dependent on receiving money from the state legislature and is not as reliable a resource as it could be.[3]

County lawmakers and stakeholders are interested in developing a narrower, more focused farmland fund that would receive more consistent funding from the legislature. County and state lawmakers would have to work together to address and resolve challenges resulting from rising real estate prices and the pressures on farmers to sell land to developers.

Examples:

Utah has many conservation easement programs of varying scales and for different areas. Some of these programs and organizations include: the Bear River Land Conservancy, the Ogden Valley Land Trust, the Summit Land Conservancy Easement Program, the Nature Conservancy Easement Program, and the Utah Open Lands Easement Program.[4]

Massachusetts has a conservation easement program specifically designed to benefit agriculture: “The Agricultural Preservation Restriction (APR) Program is a voluntary program that offers a non-development alternative to farmland owners for their agricultural lands who are faced with a decision regarding future use and deposition of their farms. The program offers farmers a payment up to the difference between the “fair market value” and the “fair market agricultural value” of their farmland in exchange for a permanent deed restriction, which precludes any use of the property that will have a negative impact on its agricultural viability.”[5]

Pennsylvania takes an unconventional approach by using a cigarette tax, which funds 45% of the state’s conservation easements. The remainder of the cost is funded by county and state government.[6]

Establish Agriculture Protection Areas in Utah County to Support Farm Operations at All Scales

Who can implement this: State, county, and city lawmakers; communities; governmental organizations; and agricultural producers

Agriculture Protection Areas (APAs) are designed to protect farming and ranching operations. Agricultural operations on land within an APA are given the “highest priority use status,” meaning they are valued from a regulatory perspective above residential and commercial uses.[1] APAs are established for 20 years and can be modified, renewed, or terminated at the end of that period.

APAs help protect farmers against nuisance lawsuits, unreasonable restrictions from state and local agencies on farm structures and practices, changes in zoning designations, and roads cutting through their farms. They also serve to notify adjacent land buyers that they are purchasing land next to a protected farm operation.[2] APAs help prevent smaller farms from being sold to developers, which makes more small farms available to beginning farmers and helps mitigate some of the inherent risks of small farms. These protected areas enable farmers to run their business with greater peace of mind and less worry about external forces disrupting their livelihoods.

Currently the requirements for establishing an Agriculture Protection Area are as follows:

  • Each APA must be a minimum of 20 contiguous acres. A proposal for APA must be signed by the owners of a majority of the land within the area and include the following information:
    • The boundaries of the potential APA
    • Any limits on agricultural production in the area
    • The names of owners of record of the land within the area
    • The number of acres of each parcel within the area.
  • Land may be added or removed from an APA at any time if a proposal to do so is approved by the county commission.

 

Implementation:[3]

  • Government and nonprofit organizations should educate local landowners about the benefits and limitations of APAs to help communities begin the process of establishing APAs.
  • The Utah County Assessor’s Office should make an easily accessible APA application available online to increase the transparency of the process. Uintah County’s APA application is currently available online and breaks the process into steps that are easy to understand and follow.[4]
  • City councils and the Utah County Commission should pass an ordinance allowing for the automatic establishment of APAs that meet the minimum acreage requirement for agricultural production.
  • The Utah legislature should lower the minimum APA acreage to five acres so that more lands can qualify for protections.
  • Agricultural producers should work together to establish APAs in their communities. Though state law allows for the creation of APAs statewide, individual communities are responsible for overseeing the establishment of APAs in their jurisdictions. Cities should establish committees to identify possible APAs and work with landowners to simplify the application process.

Examples:

Utah state law allows for the creation of APAs statewide, with each county adapting and modifying the process to meet their specific needs and to improve implementation.[5] The Utah County Code specifically addresses APAs and establishes an APA Advisory Board to assist in the creation of APAs across the county.[6]

Today Utah County has over 70 APAs on every side of Utah Lake. These APAs are valuable tools for protecting farmland in both urban and rural areas across the county.

 

Develop Transfer of Development Rights (TDR) Programs

Who can implement this: County and city officials, agricultural producers, and developers

County and city policymakers should work to create an efficient transfer of development rights (TDR) program. TDR programs would enable landowners to preserve farmland by transferring development to more appropriate locations.

TDR programs are market-based tools that encourage and facilitate the voluntary transfer of development from places, such as farmland, where development is undesirable to locations where development is encouraged.[1] Transferring development rights helps preserve critically important lands, but for a TDR program to work efficiently the government must clearly define the process of facilitating transfers.

In a TDR program, landowners of a property gaining the development rights (the receiving area) compensate the owners of a donating property (the sending area). A deed restriction is then permanently placed on the property that donated its development rights. For a property to qualify as a receiving site, it must be suitable for additional development, with services and infrastructure either in place or planned.[2]

Implementing a TDR program for Utah County would provide additional options for farmers who want to profit from some of the development potential of their land without having to subdivide their property or sell it completely. It would enable them to continue farming and keep the land in agricultural use.

In order to implement a TDR program, however, cities or counties will need to address the following challenges:[3]

  • Deciding whether the TDR program will be limited to a single municipality or if it will be cross-jurisdictional. Cross-jurisdictional agreements can be set up if necessary.
  • Inadequate receiving areas as a result of developmental pressures. Ill-equipped receiving sites can result in TDR programs failing, so jurisdictions must designate appropriate receiving areas throughout the transfer process.
  • Ensuring the presence of adequate infrastructure. The receiving areas must have sufficient infrastructure (e.g. roads, utilities, and stormwater facilities) to support the added density and population growth.
  • The use of zoning and development standards in ensuring the program’s viability. TDR programs are market-based mechanisms that succeed best when there is a high demand for development. Though jurisdictions cannot control the market, the zoning and development standards in different urban and rural areas help determine the forms of viable development and how willing developers may be to transfer development to other areas.
  • The need for active support and leadership. Most successful TDR programs have strong leadership that focus on public outreach and education, program advocacy, and transaction support.

Implementation:

Establishing a TDR program within a municipality or region generally involves the following basic steps: [4]

  1. Establishing a TDR as a voluntary option with administrative provisions within the county or municipal zoning ordinance.
  2. Identifying the sending area. A sending area has significant conservation value and is usually a defined geographic area, but it can also be based on specific locational criteria.
  3. Determining the number of TDRs allocated to each landowner within the sending area. This number is usually determined through a simple mathematical formula—e.g., one TDR for every five acres. Most municipalities establish some minimum parcel size for a landowner’s eligibility to transfer development rights. The county or municipality must determine if the TDR allocation formula “nets out” constrained lands—i.e., those not easily buildable and which may have reduced development value.
  4. Establishing the procedure for severing development rights. Usually this procedure is written as part of the zoning ordinance provisions and requires the use of a Deed of Transferable Development Rights document. The ordinance can include a sample deed document approved to form by the county’s or municipality’s solicitor. The procedures must also require that an executed deed be recorded with the county recorder before a receiving area’s proposal to acquire development rights through TDR is approved.
  5. Establishing the procedure for permanently protecting the land from which the development rights were severed. Normally this procedure requires the use of a restrictive covenant, or preferably, a conservation easement held by a third party.
  6. Identifying the receiving area. A receiving area is planned to accommodate growth and preferably already has public utilities (such as water and sewer) or has plans for them. Receiving areas can be residential, commercial, industrial, institutional, or any combination thereof. Preferably, a municipality or region should have previously identified both the sending and receiving areas during a comprehensive plan update process.
  7. Creating plan-submittal requirements for the development of a receiving area. A development subject to TDR receipt can be made a conditional use within the zoning ordinance, or participation in a Traditional Neighborhood Development Overlay District can be made subject to the purchase of some level of TDRs.

Examples:

Mapleton, Utah, uses a TDR program to preserve critical environmental areas, particularly the foothill areas that lie east of the city. The Mapleton TDR program promotes the preservation of agricultural land, rural open space, scenic vistas, sensitive lands, natural hazard areas, and places where delivery of public services would be difficult and/or expensive, such as hillsides and mountainsides.

Sending areas are designated in the Mapleton general plan. The maximum density of the proposed development cannot exceed the maximum density of the site’s general plan designation. In deciding whether or not to approve development on a receiving site, the city council must consider the compatibility of the proposed development with surrounding development as well as consistency with the general plan and compliance with the development code. The city council can also determine lot sizes and other development standards, including density.[5]

Encourage More Efficient Agricultural Water Systems and Practices

Who can implement this: State, county, and city lawmakers; communities; governmental organizations; advocacy organizations; agricultural producers; and water conservancy districts

All water in the Jordan River Basin is connected. Water across the basin is used for a variety of residential, agricultural, and other purposes at different points within the watershed. Different cities, communities, and individuals should work together to use this water more efficiently and to conserve water on a basin-wide scale.

However, many of these efficiency and conservation efforts need to first be explored and incentivized by the county, its cities, and regional water agencies. Because changing water usage behavior currently has no personal benefits, many individuals have few incentives to work toward more efficient water use. And though some conservation measures may decrease the amount of water diverted, they may also increase the overall depletion throughout the basin. For this reason, conservation is best looked at from a basin-wide perspective.

Cities across Utah also face challenges in managing water and water rights within their municipalities. Oftentimes these cities end up stockpiling water, which they do not know how to best use. Assisting cities in managing their water rights will help preserve water, encourage a broader understanding of water in the basin, and avoid artificial shortages when allocating water to different uses. Many conservation measures, such as maintaining or lining ditches or canals, could also benefit from greater assistance from the state or other entities.

Regional Water Agencies can fill in these gaps in knowledge and management and allow regions to pool resources. They also allow water issues to be discussed and solved on more local scales, avoiding statewide political battles that are all too common when discussing water in Utah.[1]

Implementation:

  • Lawmakers, government organizations, and nonprofit organizations should support projects that conserve water such as: drip irrigation systems, lining canals, soil management, and developing efficient irrigation equipment.
  • State, county, and city officials should incentivize water conservation at larger scales.
    • Organizations and policymakers should help producers and communities gain a broader understanding of water systems and water management in order to motivate county residents to be more efficient when using water.
    • State, county, and city lawmakers should provide financial motivators like tax breaks and tax credits for producers and community members who conserve water and/or implement better water conservation practices.
  • The Utah legislature, the Utah County Commission, and individual city councils should encourage and support existing organizations that manage and conserve water on a regional scale in Utah County and throughout the state. Organizations like Regional Water Agencies or Water Conservancy Districts can serve as a powerful tool for regions looking to more efficiently use and conserve their water.
    • Based on support from community and local lawmakers, state legislators would need to implement changes to water management structure.
    • Depending on the needs of residents and the goals of implementing changes, individual districts should be created on a basin-wide, county, or community scale. 

Examples:

California’s Department of Water Resources focuses on Integrated Regional Water Management (IRWM) as a way for regional water managers and management groups to make local and regional investments in water infrastructure and tackle local water issues.[2] California has 48 IRWM regions, which cover 87% of the state’s geographic area and 99% of the state’s population. Each region has its own challenges and resources available to address water issues. California’s IRWM served an important role during the 2014 drought, allowing different geographic areas across the state to conserve water and combat unique challenges on both regional and statewide scales.

 

Use Alternative Water Transfer Options to Stop Buy-and-Dry Practices

Who can implement this: State and city officials, governmental organizations, agricultural producers, and water conservancy districts

As residential and municipal development puts pressure on lawmakers to secure water rights, cities will sometimes purchase agricultural water rights and lands, transferring them away from agricultural uses. Because of this pressure from development, producers are incentivized to sell their water rights, often having to take their lands out of agricultural production.[1] Alternative water transfer options will allow cities to allocate water while still preserving agricultural lands. They will also give farmers more options of what to do when their water rights become more valuable because of encroaching development.

Alternative Water Transfer Options:

Fallowing agreements: In a fallowing agreement, farmers and water managers state that the city will pay farmers to let a certain percentage of their land go uncultivated instead of transferring (or leasing) the water that would have been used on that land to urban uses.[2] Fallowing agreements give farmers and ranchers a way to temporarily, rather than permanently, cash in on some of their water rights.

Alternative transfer methods (ATMs): ATMs are structured agreements between agricultural producers, water managers, and local lawmakers that allow water to be transferred to a new use while minimizing impacts on the local economy and providing funding to the agricultural producer.[3] These methods typically outline how to optimize the agricultural and nonagricultural benefits of remaining lands after the water has been transferred. ATMs also generally include mitigation measures to help minimize impacts on the local community and environment.

Transfer of development rights (TDR) programs: TDR programs can be used to dissuade cities from unnecessarily annexing open spaces. Some agricultural lands may be rendered dysfunctional or noncompliant through unnecessary annexation, especially when the annexation only occurs to secure water rights for new development. Utah County’s cities should only annex land when it benefits all members of a community/

Implementation:

  • City councils and planners should work closely with farmers and ranchers to use water transfer options that will keep agricultural lands in production. City councils should pursue alternative water transfer options rather than transferring water rights from agricultural to urban uses without exploring all options.
  • City councils and planners should identify which agricultural lands have been taken out of production through buy-and-dry practices in the past and explore ways to return water rights to farmers so they can again use the lands for agricultural production. All transfers must be under a willing-buyer, willing-seller agreement.

Examples:

A Colorado bill specifically designed to combat buy-and-dry practices was signed into law after the state’s 2014 legislative session.[4] The bill allows local government to approve any development that transfers the water rights from agricultural to domestic uses. To preserve water even as some agricultural lands are developed, the bill also limits the amount of water that can be used for watering grass on residential lots that have replaced agricultural lands.

 

Establish a Minimum Size of 40 Acres for Homes Built in Agricultural Zones to Discourage the Conversion of Farming Operations into Low-Density Residential Lots

Who can implement this: County and city officials, communities, governmental organizations, and agricultural producers

A particular concern raised by the spread of hobby farms (parcels of land that are zoned for agriculture but are primarily residential, referring specifically to those that are not agriculturally productive) is the proliferation of residential development in primarily agricultural areas. It takes only 20 five-acre residential lots to eliminate 100 acres of agricultural operations. This spread of very low-density residential development in agricultural areas can quickly consume large areas of productive farmland and increase urban-growth pressures. Moreover, many who purchase these five-acre lots may actually prefer to have a smaller lot with municipal services, but the current zoning practices that dictate the five-acre minimum lot size limit their options.

Establishing 40 acres as the minimum lot size for homebuilding on agricultural lands (unless specific requirements are met) will promote productive agricultural operations and make it more difficult to subdivide agricultural lands into nonproductive hobby farms that have no agricultural output or benefit. This would also preserve protections for agricultural producers across the county.

Farming operations are generally more effective and easier to protect and preserve when they take place on larger scales. Once land around smaller agricultural lots begins to be developed, it becomes easier for urban and suburban developments to expand, threatening to consume productive farmlands. Land currently belonging to hobby farms could be better used as part of larger, more productive farm. However, small farms are crucial to the agricultural industry, especially for beginning farmers looking to gain experience before moving to larger-scale farming efforts. The county needs to carefully evaluate the impacts of its agriculture zoning practices in order to better balance the needs of small-scale farmers with the needs of large-scale operations; for instance, agricultural land should be allowed to be subdivided into smaller farms but prevented from being turned into low-density residential subdivisions.

Implementation:

  • City councils and the Utah County Commission should enact ordinances ensuring that houses built on agricultural land have a minimum lot size of 40 acres to encourage and protect agricultural production. Houses built on smaller lots should meet specific requirements that discourage low density development and the creation of nonproductive hobby farms.
  • City councils and the Utah County Commission should explore ways to incentivize the consolidation of small-scale hobby farms into larger farms or otherwise ensure that they are being used for agriculture production.
  • State and county organizations should encourage farmers to apply to have their lands designated as Agriculture Protection Area to protect their farms and allow for small-scale farming operations to continue.
  • Cities and communities should develop new and expand existing systems and programs that help beginning farmers on small farms move to larger farms when they become more experienced.
  • Nonprofit organizations should educate non-agricultural landowners on the problems associated with buying five-acre lots of agricultural land, particularly when they do not use the land for any kind of farming or ranching.
  • City and county planners should modify zoning codes to help ensure that smaller farm lots are used primarily for farming. This step is especially important for niche and beginning farmers who may not need or are unable to purchase 40 acres of farmland initially.

Examples:

1000 Friends of Oregon conducted an initiative called “The New Face of Farming” that focused on identifying and finding solutions to common farming challenges across Oregon. Many of those issues are also applicable to Utah County.[1] The initiative explored problems including lot sizing, zoning, and farm stewardship.[2] The process brought together farmers, who began to make progress on solving some of the complicated problems facing farming in the United States. 

Encourage Developers to Cluster Growth and Promote Denser Development, Leaving Larger Portions of Farmland Intact When Farms Are Developed

Who can implement this: County and city officials, agricultural producers, and developers

Urbanization and the preservation of agricultural land do not have to be mutually exclusive. In fact, smart development and growth can be synonymous with the preservation of open spaces and agricultural lands loved by Utah County residents. Cluster development is the concentration of small-scale development in a smaller portion of a designated tract of land. Cluster development preserves contiguous tracts of farmland or open space through easement, covenant, or deed restriction.

While the gross density on a parcel of land remains the same, overall lot sizes are reduced in order to set aside acreage for conservation. Instead of developing 40 one-acre lots on 40 acres of land, for example, a developer may instead conserve 20 acres for agricultural use and develop 40 half-acre lots on the remaining 20 acres of land. Permitting flexible lot sizes and adjusting minimum lot size requirements makes this type of clustering possible. Noncontiguous clustering is another strategy, in which the development from two or more parcels of land is clustered onto one lot, preserving the remaining parcels as farmland or open space.

Farm owners looking to sell some of their land can look into cluster development as a way to cash in on some of the value of their land while still preserving much of the functioning farmland. If clustered growth is developed correctly on a large parcel, farming operations can continue despite added development.

Implementation:

  • Individual city councils and the Utah County Commission should incentivize (or even require) cluster development when accepting subdivision plats. If necessary, cities should also provide density bonuses to encourage developers to adopt a cluster model.[1]
  • City lawmakers and planners should explore the benefits of cluster development in their municipalities. Preserving open space and encouraging compact development through annexation and zoning allows cities to preserve their natural resources while retaining the tax revenues and other social and economic benefits of urban growth.
  • Developers should create compact communities and preserve agricultural lands and open space wherever possible. The benefits of clustering growth are self-evident for developers; houses near large amounts of open space are almost always worth more than houses that are not.[2]

Examples:

Farmington City, Utah, has a specific cluster development ordinance. The ordinance focuses on conserving land, preserving contiguous tracts of land, reducing erosion, and preserving vegetation of existing slopes and natural areas.[3]

In an effort to reduce the loss of open spaces and agricultural lands, New Jersey passed a law in 2013 that gives municipalities authority to promote cluster development. The law allows municipalities to offer benefits to landowners and developers who promote noncontiguous clustering. This law, as well as others, helps reduce construction costs of infrastructure and encourage the more efficient use of taxpayer money.[4]

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