Farmland for Farming: The Pie Ranch Access to Land Project
By Ned Conwell, Jered Lawson, and Jessica Beckett
Pie Ranch is focused on creating a relationship-based food system, which embodies both transparency and integrity at every step. As you may have personally experienced, the food system in the United States has become increasingly opaque over the last century. The majority of food eaters do not know what is in their food, much less where it came from. A central focus of Pie Ranch is to connect the Bay Area public with the base of their food system, allowing eaters to meet farmers and talk about food, face-to-face.
In order to have a truly localized food system, where these types of direct eater-farmer relationships are possible, Pie Ranch has recognized that the Bay Area needs to increase the number of local farms that grow food expressly for local people. The westside of San Mateois one of the most accessible regions with a large percentage of undeveloped, arable farmland left in the Bay Area. This agricultural land lies within easy driving distances of both San Francisco and the greater Silicon Valley.
Of the Food Shed Assessments completed by community interest groups in the San Francisco Bay Area, five have focused on recommendations for increased protection and promotion of regional farming (Wooten et al., 2009) If the arable farmland in San Mateo County is going to be protected for future generations, someone has to advance that agenda.
Fortunately for the eaters of the Bay Area, much of the work has already been done to prevent development on potential agricultural land. A handful of non-profit and state run organizations have worked together over the last few decades to conserve the land in western San Mateo County. These conservation organizations have collectively saved tens of thousands of acres, many of which are farmable, guarding their beauty and potential productivity for future generations. Were it not for the diligent work and foresight of these organizations over the last few decades, western San Mateo County today would likely look much like Silicon Valley.
“San Mateo; this used to be a very agricultural county- in fact the entire bayside was farms and orchards- you see there are no farms and orchards here anymore- it’s all houses. Our last remaining ag land is on the coast- and it’s threatened with being developed or being taken out of production, and I think that will diminish the entire county if that happens.”
- Scott Morrow MD,
San Mateo County Health Dept
Long before it was the Silicon Valley, the area from San Jose north to Fremont and Palo Alto was known as the Valley of Hearts Delight. The area was home to thousands of commercial fruit growing operations and shipped primarily stone fruit (peaches, plums, prunes) across the country (Jacobson, 2011). On the coastal side of the county, Italian families settled and started mixed vegetable operations and dairies that supplied San Francisco to the north and Santa Cruz to the south (Debenedetti, 1997). Rural San Mateo, along with the counties of Marin, Sonoma, and Napa fed the growing urban population of the Bay Area.
In these regions with such a deep agricultural heritage, much of the land today is privately owned by non-farmers. Some has been re-zoned for urban development as communities have grown and needed more space for housing. The vast majority of the eastern half of San Mateo County has been developed into roads, businesses, schools, and housing. Seven hundred thousand people now live in all of San Mateo County (Census, 2010) with just over fifty thousand of whom reside full time on the western side of the Coast Range mountains (Census, 2010). Western San Mateo County still retains much of its agricultural potential due to its low population density.
Given increasing population and development pressure, several land conservation organizations began over forty years ago to protect the wild lands of Western San Mateo County with the goals of habitat and open space preservation. However, when these organizations began their mission to conserve this land, their focus was not on feeding future Bay Area residents. Their primary focus was on the conservation of natural, scenic and recreational resources of the area including efforts to protect habitat for wildlife, including the mountain lion and the San Francisco Garter snake. In service of this mission of nature oriented conservation, some San Mateo farms and ranches were decommissioned. While in limited instances taking land out of production in order protect such wildlife and/or watersheds may be necessary, we also believe that agriculture can be an incredible tool for conservation and enhancement of the local ecosystem. Well-trained farmers can be excellent land stewards and ambassadors for the land. As some of the land trusts that work on the coast have observed, farms themselves can be meaningful portals for the public to connect with both the cultivated space and the wild space that abuts these properties.
Pie Ranch has been working since 2006 to address the issue of land access and tenure for farmers on the San Mateo Coast. Pie Ranch believes that farmers and ranches can be terrific land stewards, and that keeping and getting more farmers back on the land in San Mateo will serve diverse interests. We recognized a need for an active voice for farmland preservation in San Mateo and have helped gather together diverse stakeholders to have that conversation. Pie Ranch was one of the founding members of the San Mateo Food Systems Alliance, an organization comprised of regional organizations, farmers, government representatives, and individuals who are interested in food system change in San Mateo. However large the vision, Pie Ranch is a small organization with limited staff time that operates both a working farm and educational programs. We understood early on that to make land more accessible for small farms in San Mateo County, we would need to partner with established institutions with the know-how, social capital, and funding to make this vision come about more quickly. This is why we began exploring the concept of broadly applied farmland preservation with the area‘s most established land conservation experts, Peninsula Open Space Trust (POST) and the Mid Peninsula Regional Open Space District (MidPen).
Together with these partners, Pie Ranch has surveyed how other organizations are addressing these issues across the US, and what tools have been developed to create stable, affordable land tenure for farmers. This report details our findings.
Different Kinds of Land Tenure Agreements
There are many types of agreements that can increase farmer’s access to land - each with benefits and disadvantages. Property owners interested in leasing land to farmers and farmers interested in leasing or buying land should consider all of the options before choosing their preferred method of land access.
Owning in Fee
The most commonly understood land relationship in the US is for a person to own the ‘fee-title’ to their land. The fee-title is the equivalent of owning the pink-slip for a car: it signifies that one owns the deed on the property along with all rights to sell or develop it (within zoning and other county and state regulations). Owning the property in fee generally gives the farmer the most flexibility in farm management, but it can also be prohibitively expensive for famers in areas where land value is as high as it is in the Bay Area unless the farmlands’ tax structure is protected (such as through the Williamson Act in California), farmland can become so valuable that even for farmers who own the land outright taxes can be a prohibitive additional expense. In this case, encumbering a property with a conservation easement can help farm families keep the taxes on their land manageable over the long term.
Owning in Fee with Easements
Land can be made more affordable for farmers if it is encumbered with a conservation easement, which is a voluntary legal agreement restricting the use, development, and other activities on a property for all time. The easement is a document which sets out the restrictions on the land and is recorded in local land records. It acts, in essence, as a secondary deed on a property, which governs not its ownership but its development rights. The landowner still holds the fee title deed (ownership of the land), but the easement, or development rights, are held by a third party, most commonly a conservation organization or land trust. Because the development and use of the land is limited, the monetary value of the land is reduced. The monetary value of the easement is determined by an appraiser. The easement remains with the parcel of land in perpetuity, regardless of who owns the land or how often it changes hands. The easement holder, not the landowner, is responsible for enforcing the conservation restrictions contained in the easement.
Farming families can benefit from conservation easements, because an easement decreases the fee value (or sale price) of the property. The market value of the land goes down because the development and use-potential is limited in order to protect the inherent conservation values of the property. This means that the owner pays a reduced property tax rate on the land. A farmer can also sell the conservation easement on their land, while retaining the primary ownership of the farm, and use the income from selling the conservation easement towards new infrastructure.
A great organizational example of widespread use of this technique is the Marin Agricultural Land Trust (MALT). Over the last few decades, MALT has conserved over 50,000 acres of farm land primarily by buying conservation easements. Many of the farm families who sold their easements used the money to upgrade their farm facilities in order to make farming viable for the next generation. Strauss Family Creamery, a well known milk, yogurt, ice cream and butter company, sold an agricultural conservation easement to MALT in 1993 and used the money to upgrade their operations to organic. They were the first organic dairy operation west of the Mississippi, and continue to thrive today (MALT, 2012).
Unfortunately, access to some agricultural land is unaffordable even when preserved under conservation easements (Sokolow, 2006). In addition, most of these easement-protected properties are still in their first generation of ownership under the easements, and there is concern that as the land changes hands, the amount of land held and worked by farmers will continue to decrease (Equity Trust, 2005).
A number of land trusts and farmland conservation programs in the Northeastern US have adopted farmland conservation tools to directly address the related goals of ensuring continued farming and land-affordability for farmers, rather than mere conservation of farmland as a static entity (Johnson, 2011). The distinction between the efficacy of different methods of conservation lies in how the land is used.
Affirmative easements help close the gap between a land with a traditional easement and what a farmer can actually afford. A restriction requiring the landowner to farm the property makes it less appealing, thereby limiting the pool of potential buyers and further reducing the value of the encumbered land, while respectively increasing the cost of the easement.
There are now many organizations that are successfully using Affirmative Easements. The Massachusetts Agricultural Preservation Restriction, through the State of Massachusetts, is one of the most prominent programs that currently includes an affirmative agricultural easement, in the form of an ‘affirmative covenant’.
Here in California, Live Power Farm in Covelo held the first affirmative easement in the state, held by Equity Trust (Lawson, 1997). Marin Agricultural Land Trust (MALT) and Ag Land Trust in Monterey County both hold easements with affirmative use language, as does the Land Trust for Santa Barbara County on an urban farm in Goleta called Fairview Gardens.
Pie Ranch supports Affirmative Agricultural Easements so long as they are used as an affirmative tool rather than as a punitive one. We also believe that conservation organizations should initially target parcels that are actively being farmed when testing this mechanism.
Option to Purchase at Agricultural Value
In response to the concern that protected farms were being purchased by non-farmers at prices higher than farmers could afford, legislation in two states established innovative farmland conservation programs which now authorize Options to Purchase at Agricultural Value (OPAV). An OPAV is an additional legal right appended to an agricultural conservation easement and owned by the easement holder. An Option allows the easement holder the legal right to purchase a conserved farm property any time that property is sold on the open market. The OPAV also sets the future price of conserved farmland at its appraised value based upon commercial agricultural use alone, disregarding factors such as location and views. As the agricultural value of the land is less than the “estate” value, this provides a substantial deterrent to non-farm buyers, and encourages the sale of conserved farmland to another farmer or land trust at a reasonable price. The State of Massachusetts, Vermont Land Trust, and Equity Trust (located in MA) have all adopted OPAV.
An OPAV can be exercised at time of sale, or assigned to another farmer. To save paperwork and government involvement, and thereby appeal to a broader group of farm owners, Vermont waives OPAV when a farm is transferred to family or a qualifying farmer. (A qualifying farmer is defined by the IRS as one earning 50% or more of their income from agriculture, according to VLT.) (Johnson, 2011)
OPAV gives the easement holder a measure of control over future land transactions, deters non-farm buyers, and may create an opportunity for land trusts and/or farmers to purchase these farms any time the land is transferred. OPAV ensures that agricultural land remains available for agricultural use. This mechanism is limited, however, in its ability to put the cost of farmland within reach of incoming farmers. The purchase price, while lower than commercial or estate value, may still be too high. In addition, land trusts or other easement holders may not have cash or financing available to exercise their Option to Purchase when a property goes on the market. To our knowledge, an OPAV has not yet been used in California.
Leasing is often the most affordable option for farmers as it requires the least upfront capital, but it comes with variables that can challenge the stability of a farming operation. Generally speaking, the longer the lease, the better for farmers. Year-to-year leases may provide flexibility for the owners and farmers, but do not provide incentives for sustainable land management practices that come with long-term planning. A tangible example is perennial cultivation. If a farmer is able to get a multi-year lease, they will be more likely to plant fruit trees and perennial borders that they wouldn’t otherwise take the risk to plant.
One challenge of traditional lease agreements is that they typically do not allow farmers to build equity on the land by building or improving infrastructure on the property. A farmer who invests in infrastructure on leased land most often loses that investment, because the farmer does not own the improvements and cannot sell them. Long-term leases that are inheritable and have the ability for a farmer to build equity, as described in the following section, are one of the best options for farmers in areas where land is expensive.
In this model, the fee title is held by a public entity, private entity, or private non-profit land trust. The farmer has a lifetime, inheritable and transferrable ground-lease. (Ideally, the lease is offered to the farmer at an affordable rate. However prices may also be set at market value, which can be an obstacle for new farmers where land is expensive.) The farmer purchases the buildings and other improvements on the land and invests in them over time. If the farmer wishes to let go of the lease, he/she may sell the improvements to another farmer at an affordable agricultural value determined by a set valuation criteria, monitored by the landowner. This means a farmer who has made improvements can retain the value of their investment in the land, even if they leave the lease.
With an equity lease, the value of the land is separated from the value of buildings and other improvements on the land. Land is removed from the market and held in trust by the fee title holder. The distribution of the rights and responsibilities to use the land is determined by the land-use agreements, rather than by the placement of title (Matthei, 1997).
The goal is for a farmer to build equity with a lifetime, inheritable and transferrable ground lease. The lease protects agreed-upon ecological, economic and social objectives between all parties. The lease requires buildings be owner-occupied, not sublet for vacation homes, and that that the land is farmed commercially. The lease may also ensure that the buildings remain affordable at resale to the next farmer.
One example of an equity lease is Indian Line Farm in Massachusetts (Indian Line Farm, 2012). A community land trust holds the fee title to the land, The Nature Conservancy holds the development rights (conservation easement), and the farmers own the farm structures. This gives farmers the opportunity to build equity and have long term security with a 99-year lease. By taking away the burden of land debt, the farmers can focus on growing food for the community, achieving the conservation goals of the land, and maintaining a viable business.
Keys to Land Tenure
1) Farmland for Farming
3) Secure Tenure
4) Equity Building Opportunities
5) Flexibility of Management
1) Farmland for Farming
Traditional land protection measures such as zoning and conservation easements have failed to keep farmland accessible to farmers who do not already own land, privileging those who can afford to buy land for speculation or for country estates. The land often ends up in the hands of estate buyers or second homeowners who do not intend to cultivate the land. Once we prioritize that farmland in San Mateo County is best used for farming, we as citizens and farmers, along with our private, public, and non-profit allies, can begin to imagine and implement some of the tools described above.
For farmers to be able to start new operations and maintain existing farms, land needs to be affordable. The definition of affordability in this case is based on the potential income of a farmer. While conservation easement programs have reduced the value of protected properties, it is still sometimes beyond the means of a family on a farming income. New proactive measures should be applied to farmland conservation to ensure that farmers can afford to purchase or lease land.
3) Secure Tenure
In an age where farmland is bought on futures speculation, and owners may decide at a moment’s notice to develop or sell, farmers and owners should create stable, long-term agreements, such as a multi-year lease. Therefore the farmer has an incentive to build new infrastructure, repair current infrastructure, and maintain the soil and environmental health of the land to ensure the long-term viability of the operation.
4) Equity Building
When structuring a lease, land-owners should allow farmers to build equity over the long term. Farmers with the opportunity to build equity will have a greater incentive to be a good tenant, to put time and energy into improving the soil structure and fertility, building and maintaining water systems and infrastructure, and upgrading or constructing new buildings such as barns or houses. When farmers are permitted to own and sell these improvements, they are better able to plan for the long-term health of the land, its resources, and its ecological features. Building equity can also help to create a financially-stable future for farming families.
5) Flexible Management
Within reason, farmers should be supported in making the daily decisions about their farming operation with minimal interference. Farmers are by nature independent, and may be off put by detailed scrutiny from an inflexible landlord. The next generation of farmers is creating dynamic and diverse operations that rely upon on-the-ground decision-making. When choosing a tenant farmer, be sure to consider references and to choose farmers that will operate according to the lease and any easement requirements.
Lastly, the long-term tenure of any farm relies on the mutual trust of the individuals involved. Be it a lease agreement, owner-owned, or community supported agriculture project, we have found that if relationships between the parties is based on trust, the outcome is more likely to be positive.
Preserving the Base of our Local Food System
“We need to preserve productive farmland so we know we have this basic resource to provide our communities with the food that it needs.”
- Jered Lawson, Pie Ranch Executive Director
Initially when Pie Ranch began calling for land access for farmers in San Mateo County, we were prepared to embark on a broad public policy initiative modeled after the Homestead Act. Instead of the government giving the land away, we envisioned that the government would protect the land, like they do with parks. Rather than conserving land just for natural resource protection and recreation, Pie Ranch envisioned that some land would be designated for food production, making long-term ground leases available for farmers interested in serving local food needs.
There are now efforts being made by our regional land trusts and open space district to serve that vision. MidPen is beginning to take on working row crop lands after successfully leasing rangelands. POST has been getting farmers back on easement-controlled land in San Mateo County, and more recently they have been advancing a full-fledged Farmland Protection Program. There are private landowners in western San Mateo County who are ready to discuss how they can participate. When Pie Ranch began to research the theme of land access for farmers, we discovered these many disparate voices speaking along similar lines.
Pie Ranch, together with the San Mateo Food System Alliance, has worked over the last six years to bring those voices together. Organizing events, workshops, and meetings with the stakeholders in San Mateo County, we have begun to harmonize the diverse efforts into a unified call for action. We look forward to continuing to collaborate with MidPen and POST on their upcoming efforts for farmland protection.
San Mateo County has amazing resources at its fingertips. We have available farmland that has been conserved and we have farmers that are willing to farm it. We have a public that is interested in local food and farming, and we have organizations that want to facilitate land access for emerging farmers. We believe the success of these efforts will be assured as long as private, non-profit, and public landowners will keep in mind the six Keys to Land Access.
Pie Ranch will continue to advocate for improved conditions for farmers growing food for local markets, and for the public to have opportunities to interface with those farms. We are committed to access to land for farmers to ensure the health and viability of a regional food system that will feed our children and grandchildren. We wholeheartedly believe that local food system resilience is possible, given the right mix of public policy infrastructure, individual support, and organizational leadership. We at Pie Ranch will continue to work hard to realize this vision.
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Cited from Transcript 2.25.10: http://library.ucsc.edu/reg-hist/debenedetti
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 Food Shed Assessments are reports done by a variety of stakeholders that try to create a holistic picture of an areas’ food system.