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Budget Squeeze Hits Farmland Preservation

Record high land values and fast-shrinking state budgets are slowing farmland preservation efforts. That's the word, this week, from the American Farmland Trust.

Purchase of ag conservation easement (PACE) programs slowed during 2008, as states spent 14% in 2008 than in 2007, but protected 28% fewer acres and acquired 33% fewer easements. And that was before bad state budget news really started to break, says Bob Wagner, AFT's senior director of farmland protection programs
Next year's news may be worse, he predicts. Budget shortfalls have impacted funding for farmland protection, even in states with typically well-funded programs.

Maryland's Ag Land Preservation Program isn't accepting new applications in fiscal year 2010. The program's funding sources — a dedicated portion of the real estate transfer tax and the ag transfer tax — are generating less revenue. Instead, funds will be used to address the backlog from fiscal year 2009.

Pennsylvania's Ag Conservation Easement Purchase Program set a lower threshold than last year for state easement purchase funds. The program is bracing for a loss on investments and less revenue than anticipated from the state's Environmental Stewardship Fund. At the same time, the program faces staff cuts to help offset a $3.2 billion shortfall.

Tighter Obama bucks

The Obama administration is also grappling with budget deficits and included less in next year's federal budget for the Farm and Ranch Lands Protection Program than was authorized in the 2008 Farm Bill. "It's short-sighted," contends Wagner. "Investing in farmland protection makes good economic sense. PACE programs enable farmers to tap into their land equity so that they can improve and expand their businesses."

As of January 2009, 22 states have active PACE programs. Five states — Colorado, Maryland, New Jersey, Pennsylvania and Vermont — have each protected more than 125,000 acres of farmland. Delaware, Maryland and New Jersey have made headway by protecting a significant percentage of their agricultural land base.

Seven states — Colorado, Connecticut, Delaware, Maryland, Massachusetts, New Jersey, and Pennsylvania — have invested more than $100 million in farmland protection. New Jersey and Pennsylvania have spent $758 million and $676 million, respectively.