Part 1 of 3: Making farmland transition options available to landowners

Abstract

Productive farmland is an increasingly rare and valuable resource. Thinking ahead and having a plan in place for the legacy of the land is one of the most important decisions to make as a landowner. This article aims to “demystify” the new generation of farmers so that current landowners have a better understanding of who they are and ways we can make land more accessible to them for the benefit of everyone. 

If you’re a landowner, you know the value of land, both from a financial and legacy standpoint, and its role in human subsistence. It is arguably the single most sought-after asset in today’s world and planning for the future of your land may be one of the most significant decisions you can make. 

Farmable land is rapidly being lost to development and smaller farms are struggling to stay viable. From 2001 to 2016 America lost or compromised 2,000 acres of farmland every day. The current population of producers is aging out and it is expected that 70% of farmland will change hands in the next 20 years. According to the American Farmland Trust, the ownership of 40 percent of America’s agricultural land will be in transition within the next 15 years. Without intentional efforts to make agricultural land available to incoming farmers, future generations will find themselves in the midst of a land access crisis. American Farmland Trust coined the phrase “no farms no food.” Now is the time to protect one of our most precious natural resources, farmland, and that process begins with providing current landowners with alternatives to selling the land for development. 

Land access barriers for incoming farmers

Incoming farmers – generally referred to as “beginning” or “emerging” farmers – tend to have more diverse backgrounds than in past generations. The transfer of land, tools, and equipment within families, along with farming knowledge and relevant skills, has become rare. There are many incoming farmers eager to grow food and fiber but most lack the necessary capital to both buy land and start a business from scratch, especially when considering obstacles such as high real estate prices, stagnant wages, and crushing student loan debt. 

The 2022 NYFC survey reported that access to land is the most significant barrier facing young farmers: 

Land is deeply intertwined with all aspects of farmers’ success and impacts more than agricultural communities. Land access is critical to the health and well-being of our environment, economy, and marginalized communities.

There are also cultural challenges for beginning farmers. In a national 2022 survey of over 10,000 farmers under the age of 40, the National Young Farmers Coalition (NYFC) found that 78% of young farmers hold a minimum of an associate’s degree, with 56% holding a bachelor’s. Also, nearly 20% of these young farmers are BIPOC (Black, Indigenous, and other People of Color) and regardless of their expertise, acceptance into predominately-white rural communities can be difficult and isolating. Access to capital can be even more daunting for BIPOC farmers due to discriminatory lending (NPR). 

Rather than inheriting generational knowledge, these incoming farmers learn through apprenticeships and low-paying farm labor jobs. They invest in educational programs to increase business knowledge. They take on loans to buy equipment, tools, and supplies and pay rent to steward land they do not own while they gradually build up their businesses. However, the time usually comes when success and security hinge on ownership of land. Read more in this article on Training and Education Opportunities for Beginning Farmers. 

Thinking outside the box: alternative models of land transition 

Landowners can help address the land access crisis by planning well in advance. Formal transfers of land allow the incoming farmer to build up equity and the current landowner time to adjust and get affairs in order. Land transfers can take time – in most cases several months to several years. The Farm Service Agency (FSA), for example, offers a no-down payment low-interest Farm Ownership Loan to qualified beginning farmers, but the process of applying for and finalizing this loan can take 3-6 months – sometimes longer.

Even with special lender resources, emerging farmers find that they simply can’t find affordable land, so alternative models of land access are needed.

Options for alternative land transition

Land Contracts

• Land contracts – sometimes known as a contract for deed – can be favorable to beginning farmers who ultimately want permanent land tenure but don’t have a lot of capital, and for whatever reason cannot qualify for an institutional loan. A land contract can be arranged between a beginning farmer and a landowner to pay down the cost over time.

Cooperative Land Access

• Some incoming farmers are pooling resources and forming cooperatives in order to buy land together. Learn about cooperative land access and land management from Hanna Breckbill, the founder of Humble Hands Harvest in this video. 

Agriculture Conservation Easements

• In some cases, a land trust can purchase farmland, and implement an Agricultural Conservation Easement (ACE) to reduce the cost of land while also permanently protecting the land. An ACE is a permanent deed restriction that allows future farmers to continue farming the land, but typically prevents subdivision and non-farm agricultural development. The current landowner can then sell the land to an incoming farmer at a more affordable price. In some cases, landowners themselves can donate an easement on their land for the same benefits. Read more about Agricultural Conservation Easements in part 2 of this article series. 

Buy-Protect-Sell

• Buy-Protect-Sell (BPS) is another innovative model for land transition. In this model, a farmer sells their land to a land trust, who then protects the property with an agricultural conservation easement. “A land trust or land conservancy is a community-based, nonprofit organization that actively works to permanently conserve land.”(Land Trust Alliance). Land trusts are responsible for “holding” the easement. This means that the land trust is responsible for visiting the property annually and ensuring that the conservation values of the easement are upheld over time. The easement removes the development potential from the farm, limiting nonagricultural development and other uses that threaten the future of farming while making the land more affordable to incoming farmers. The Lor family’s transition to Singing Hills Farm in Nerstrand, Minnesota is a great example of a non-traditional farm transition. Read more about the Buy-Protect-Sell transition model in part 3 of this article series, watch this video, and find other land transition resources at www.gotfarmland.org. 

Land access challenges can be avoided – by planning ahead and exploring alternative land transition models. Organizations with land transition expertise in Wisconsin include the American Farmland Trust (AFT), Groundswell Conservancy, the Renewing the Countryside, Farmland Access Hub, Land Stewardship Project (LSP), and UW-Madison Division of Extension. 

The “Making Farmland Transition Options Available to Landowners” article series aims to share information about farmland transition options with landowners. The article series is a collaboration between the American Farmland Trust, the Farmland Access Hub, and the UW-Madison Division of Extension. 

Part 1:  Demystifying the future farmer and planning ahead for a successful farmland transition

Part 2: Agricultural conservation easements 101: Permanently protect your farmland and legacy

Part 3: Buy-Protect-Sell: Bridging gaps to incoming farmers

References