League of Women Voters of Montgomery
County, MD, Inc.
Fact Sheet May 2004
The viability of agriculture in
Introduction
It is significant that the program established
to preserve farmland in
·
Control
of public costs and prevention of urban sprawl
·
Adherence
to the county growth management system
·
Preservation
of regional food supplies
·
Energy
conservation
·
Protection
of the environment
·
Maintenance
of open space
·
Preservation
of rural life styles
Two county plans
identify the policies and plans for providing the infrastructure to support
development. The first is the Six-Year
Capital Improvements Program (CIP) (2005-2010) and the second is the Ten-Year
Comprehensive Water Supply and Sewerage Systems Plan (2003-2012). One third of
the county population is expected to live up-county, primarily in the
Easement Acquisition
Programs
Conservation
easement programs to preserve agricultural and scenic open lands began in
As
of 2003, the following list gives the number of acres preserved through each
program in
6,678 AEP
3,386 RLP
2,831 MALPF
2,086 MET (2001)
2,600 Legacy
Open Space
17,581 acres Total
These
conservation easements are considered to be perpetual; however, in two programs
(AEP and MALPF) after 25 years the owner may buy back the easement if the state
and county and/or foundation agree the land is no longer suitable for
farming. Land in MET can be held in term
easements, but then it does not qualify for certain tax benefits.
In
the last three years, since the Rural Legacy Program was initiated, most of the
land protected by conservation easements in the county has been enrolled
through this program, which protects not only farmland, but also
environmentally sensitive areas. The newest program, Legacy Open Space,
established by
The favorable agriculture land assessment provides a
substantial fiscal benefit to farmland owners.
Land that is classified as agricultural use is assessed at no more than
$500 per acre in
In
response to the increase in the county energy tax last summer, staff and
members of the Agricultural Advisory Committee contacted Montgomery County
Council members to protest the tax increase. After considering several possible
solutions, the County Council agreed to define farming as a home-based business
for energy tax purposes. That means that the residential energy tax rate
will be applied to all agricultural energy resource purchases rather than the
considerably higher commercial rate. To benefit, farmers must receive
certified agricultural producer status from the county so that suppliers can
apply the lower tax rate.
The
deer population problem is a financial disincentive for farmers. At the
Agriculture Round Table held by the County Council last fall, farmers
identified the loss of crop resulting from deer damage to be as high as 67% of
the expected yield, particularly in fields adjacent to county and state parks.
The state Department of Natural Resources issues deer damage permits to
affected farmers to destroy the deer, but limits on the type of weapon that can
be used at certain seasons of the year and on persons permitted to use the
permits restrict their effectiveness. As a result, some crop
farmers are seriously considering declaring the land unsuitable for farming and
turning the most heavily affected fields over to development.
Off-road
uses are exempt from the fuel tax so farmers do not pay the gasoline tax for
fuel used in farm activity.
Historically, farm businesses have had a sales tax exemption like all
businesses in
Subsidies
Cash payments to farmers for growing, not growing, or for catastrophes have
been common for
Subsidies fall under three main categories:
Commodity Programs: help maintain
higher prices for various crops by loans or other payments to farmers with
crops used for export; in
Conservation Programs: are divided into two
programs. CRP (Conservation Reserve Program) provides payments to farmers to
take out of production environmentally vulnerable land subject to erosion and
protect the land by planting grasses or trees; EQIP (Environmental Quality
Incentives Program) provides payments for conservation measures on working
lands. If a landowner places rented cropland in a conservation program, conservation
payments usually go to the landowner and not to the tenant farm operator.
Disaster
Programs: provide payments to farmers to
compensate for losses of livestock or crops during disasters such as drought,
severe storms, etc.
OTHER
APPROACHES TO FARMLAND PRESERVATION
Last
summer a study to identify new options for preserving farmland was
completed by Duke and Lynch[5]. Most of the regulatory
means available for protecting farmland suggested in that study are being
practiced by
State
executive orders can be used to prevent state development that conflicts with
the state’s growth policy.
A
recent
Impact
fees assessed when land is sold for non-agricultural use can serve to delay the
conversion of farmland to other uses; however in
Mortgage
assistance programs can enhance the viability of agriculture. While mortgage
rates are low, borrowing costs are relatively low, but land is expensive and
beginning farmers may not have sufficient collateral to obtain a conventional
loan. In their study Duke and Lynch
suggest that counties could provide mortgage assistance to new farmers to help
them compete with developers for land.
The
USDA Farm Service Agency (FSA) also helps beginning farmers who do not have
sufficient collateral to obtain a conventional loan. These Beginning Farmer Down Payment Loans are
made for the lesser of 40% of the purchase price of the land or 40% of the
appraised value. They are 15-year loans at an interest rate of 4%. FSA has two other types of loans that help
farmers own and retain their farms.
Direct Loan Ownership loans may be made for up to $200,000 and
Guaranteed Farm Ownership loans may be made for larger amounts, both for
periods of up to 40 years.
Financial arrangements that allow the state or county
to buy easements at a lower price enable more land to be preserved earlier for
less money. If the seller of an easement were to accept a lower easement price
and claim a charitable donation for the difference between the appraised price
and the actual payment, the seller could receive the same benefit, but the
acquiring agency would spend less. Installment payments of the easement value
is another technique that could be used to increase the benefit of selling to a
preservation agency
Because of the large increase in farmland value
in recent years, if farmers sell their property even through agricultural
preservation programs, they are subject to paying a capital gains tax on the
sale price. If part of the gain tax were
forgiven when land is sold to a preservation program, the longest-tenured
landowners would benefit most and there would be an incentive to sell to a
preservation agency rather than to a developer.
Having
a critical mass of farmland is mentioned frequently in the Functional Master
Plan establishing the Agriculture Reserve as a concern leading to the creation
of the reserve. The concern is that if there are few farms, the supporting
businesses such as grain elevators, seed suppliers and veterinarians will
disappear resulting in decreased convenience and higher costs for farmers. Researchers from the University of Maryland
Department of Agricultural and Resource Economics have studied a variety of
questions relating to the viability of farming in the Mid-Atlantic Region,
including determining if there is a level of farming activity required in order
for farming to continue to be a viable enterprise. In researching the critical mass question,
Lynch and Carpenter2 examined whether counties lost farmland at a
faster rate if the number of agricultural acres fell below a critical threshold
during the period from 1949 to 1997.
They found that there was no compelling evidence that a critical mass of
farmland was required to sustain viable agriculture.
Their
research also showed that the rate of farmland loss decreases when there is an
upward change in median income for the county population generally. For farmers in particular, when the value of
sales is up and the expenses per acre are lower, the rate of loss of farmland
goes down. When population, the number of dwelling units and the unemployment
rate increase, the rate of loss of farmland in a county also increases. Metropolitan areas have rates of loss over
and above the impact of population growth. All of these factors impact
Overall the downward trend in amount of farmland in the
county has not stopped. The rate of loss
slowed significantly when the county’s population growth slowed, but with the
rate of population growth increasing and the rate of creation of dwelling units
growing even faster, preserving farmland in
|
General Location |
Acres Proposed For Development |
Dwelling Units Permitted @1/25 A |
Lots Requested |
Review Action # permitted |
|
N. of |
17.22 |
0 |
1 church |
1 |
|
NW of |
31.94 |
1 |
1 |
1 |
|
N of |
92 |
3 |
3 |
2 |
|
N. of Poolesville |
105.27 |
4 |
4 |
4 |
|
NE of Barnesville |
434 |
17 |
17 |
denied |
|
E. of Poolesville |
327 |
13 |
13 |
13 |
|
W. of Laytonsville |
273.37 |
11 |
10 |
9 |
|
Total |
1,280.8 |
47 |
49 |
30 |
The
conversion of farmland in the RDT zone to housing during the past two years is
reflected in the adjoining chart which contains data on subdivision requests
made to the planning board. Development
in the RDT zone is limited by zoning and also by the need to have adequate
percolation for a septic system. The subdivision process can be long and expensive. Frequently neighbors oppose plans and
proposals may stay under planning board consideration for months. Approval is often given with conditions
attached. The farm community has
advocated a simplified process for landowners to sell off an acre or two
without going through the regular subdivision process involving the whole
farm. A process for minor subdivisions
is available for plans involving five or fewer lots of five acres or less, but
this has not been used much in the RDT zone.
Subdivision in many cases in the RDT zone results in lots of 25 acres or
more. A lot as small as one acre is
permitted there and much less farmland would be converted for the number of dwelling
units allowed if advantage were taken of the minor subdivision option with
smaller lots.
William
Hussman, former chairman of the Planning Board, proposed a “conservation
design” in 1999. He believed that
clustering would help to keep more of the prime farmland in farming and not
break up the landscape with scattered houses.
He proposed that lots be clustered on subdivisions of 100 acres or more
if six or more lots were created. He
suggested that private roads could be used to enable clustering and that
alternatives to individual septic tank sewage disposal be considered. At the time mandatory clustering was strongly
opposed by farmers and no formal action has been taken on this proposal.
Throughout
history farmers have adapted to changing conditions. Recently they have embraced different types
of farming and alternative marketing mechanisms and have capitalized on major
technology changes in agriculture. New
approaches to agriculture for crop farmers include the use of Global
Positioning System (GPS) technology in guiding tractors, no-till farming and
computerized release of nutrients into the soil during planting to assure
maximum productivity from the land.
As
urban and suburban development has intruded into the countryside, traditional
farmers have had to adapt to remain viable in farming and some have turned to
fruit and vegetable production. Some fruit growers have developed their
marketing reach by encouraging down-county residents to come to the farm for a
day of "agri-tainment." They have pick-your-own fruit days,
tours of the farm, hayrides, and other activities that result in a ‘farm
experience'. For some farmers, the farm is not about production, but
about marketing. For example, the farmer may buy additional fruit from other
local farmers so that he has plenty available to promote this experience.
County regulations limit the products he can sell because a certain
percentage of what is marketed must be grown on his property, and another
percentage must be regionally grown.
Special
exception uses in the agricultural zones have been recognized as a problem for
many years. In 1998 a study commission
was formed to make recommendations to the County Council, but those
recommendations were not acted upon.
Recently pressure has mounted for action on a variety of uses. On
Restrictions
were put on the number of horses per acre, the size of the property required
for major and minor equestrian events, the duration of these events, and the
hours of operation. A major event, with no
more than 300 equestrians and spectators, on a property of at least 75 acres on
a major road, lasting up to three days, may be held three times a year. A grandfather clause was included allowing
riding stables already in operation to continue as they are, but they must
comply with the new event regulations and produce a soil conservation and water
quality plan within one year. Any
equestrian facility that keeps or boards more than ten horses must present a
nutrient management plan and a soil and water quality management plan to the
county within one year after commencement of operations. Enforcement is the responsibility of the
State of
A number of council members voiced reservations about the new regulations, their impact on the environment and enforcement. The Maryland/National Capital Park and Planning Commission was asked to review the impact of the new ordinance in two years.
Landscape
contracting is a thriving, high-demand occupation in the county with over 350 businesses
in operation according the Agriculture Services Division. This type of business is permitted by special
exception in agricultural zones. Because the industry is so diverse, ranging
from a single person with lawn mowing equipment to an integrated operation with
numerous employees growing plants, composting mulch, trimming trees, and
trucking debris, rock and other building materials in and out of the facility,
it is difficult to classify it as a use permitted by right in any zone except
the rural services zone. Fewer than 80 acres of land comprise this zone. In many cases, landscape contracting may be
suited to a agricultural zone, but the special exception process is cumbersome,
expensive, and unevenly enforced. Those
who abide by the zoning provisions are more severely restricted than the many
who do not.
The League of Women Voters of Montgomery County supports:
· The Transferable Development Rights (TDR) program and its goal of conserving farmland, compensating rural landowners for down-zoning, and consolidating growth. (2002) These goals should be achieved through the following measures:
a)
improving the Master Plan process for determining potential receiving areas
through more intense review of
the land and community
characteristics prior to designation of receiving areas(2003)
b)
the planning staff developing a mechanism for designating receiving areas in
CBD, transit station, and town
centers (2003)
c) adopting a planning goal of no-net-loss of
receiving areas (2003)
d) implementing an improved system for
tracking TDR activity and assigning responsibility for compliance
with the steps of the process
(2003)
e) on site afforestation - opposing off-site
afforestation alternatives for TDR receiving areas (2003)
· The current tax policy for agricultural land including the county agricultural transfer tax (2002).
·
Agricultural and rural open space preservation
programs in
Consensus
Questions to be Discussed
1.
To meet the objectives of the Functional Master Plan, should the county adopt a
land use policy that considers preservation of productive farmland to be a
primary design consideration for development in the RDT zone, including:
a.
emphasis on cluster development
b.
sale of the 5th TDR
c.
modification of the policies restricting water and sewer service in the
Agricultural Reserve
d.
restricting activities and events in the RDT zone that stimulate a need for
commercial or industrial development
e.
monitoring uses that require a special exception
f.
other.
2.
What policy options should the county adopt to assure the viability of
agriculture in
a. developing flexible payment options for
easements
b.
enhanced deer management options
c.
fuel and energy tax exemptions
d.
establishment of standards for integrated horticultural activities in the
agricultural zones as a permitted use.
e.
other.
The study
committee this year for the Viability of Agriculture in
Margaret
Chasson
Maxine
Montgomery
Marge
Olson
Marilyn
Smith
Barbara
Steckel
Lois
Stoner
[1]
Economic Viewpoints, Maryland
Cooperative Extension Service, Fall 2002 summarizes the study conducted by the
Center for Agricultural and Natural Resource Policy in the
[2]
Lynch L and Carpenter J: Agricultural and
Resource Economics Review 32/1 (April 2003): 116-128 "Is There
Evidence of a Critical Mass in the Mid-Atlantic Agriculture Sector Between 1949
and 1997?”
[3] Cost of Community Services Studies (2002), American Farmland Trust, www.farmlandinfo.org
[4]Data obtained from Environmental Working Group, www.ewg.org
[5]Duke JM, Lynch L: Farmland
Preservation Techniques: Identifying New Options. FREC Research Reports,