Farmland Challenges in a Fast-Growing State

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Dee Shore (00:54):

According to the nonprofit American Farmland Trust, North Carolina saw over 730,000 acres of farmland converted to other uses between 2001 and 2016. That amounts to 133 acres a day. Dewitt Hardee is farmland preservation director with the North Carolina Department of Agriculture and Consumer Services, and he’s concerned about what the loss means for future generations.

Dewitt Hardee (01:27):

The largest economy in North Carolina is the agribusiness or agriculture sector – it’s food and fiber and forestry. It’s over about $93 billion – that’s with a “b” – annually. So when we look at that, what supports that industry is the lands that are in farms and forestry that basically are probably owned by people for that production. And as we reduce those land resources, you’re basically cutting out what is the foundation that supports that agriculture and agribusiness. So you’re jeopardizing that.

Dee Shore (02:04):

Hardee says the loss of farmland also affects two other industries that are key to the state’s economy, the military and tourism. The military, Hardee notes, depends on rural lands, where they can safely train on the ground and in the air, away from populated areas. And the tourism industry in North Carolina is partly fueled by what he calls our “green state” image. One of the factors driving farmland loss in North Carolina is population growth, particularly in urban counties, as different interests compete for land. While urban development provides opportunities for farmers interested in meeting rising demands for local food, it can cause the cost of land to rise. And that, says Hardee, can make it difficult for farmers to find land that they can make a profit on.

Dewitt Hardee (02:58):

And in that process, a new farmer and an existing farmer, all of a sudden as that resource becomes less and less, there comes more competition. And because of that, we have a stifling effect of bringing new generations onto the farm.

Dee Shore (03:17):

In urban and rural areas, another challenge to keeping farmland in production is low-density residential development. William Hamilton, with NC State Extension, explains.

William Hamilton (03:30):

The main threat to keep farmland in a natural state is low-density residential development. It takes up a lot of room for one thing, we’re talking 10-acre lots with one house. And on the surface, it doesn’t look so bad because it used to have a lot of green space left. But when farms start getting chopped up like that in communities, what happens is eventually the feed store and the farm supply store don’t have enough farmers to stay in business to sell to. And so they start to leave. And then from there, everybody’s just “get out of the way” as far as development comes in.

Dee Shore (04:04):

A third factor that’s important when considering farmland loss: the rising age of farmers in North Carolina. Here’s Dewitt Hardee:

Dewitt Hardee (04:16):

Our state is already at a maximum age level from the standpoint of active producers – I want to say somewhere in the 60 year of age area. And if that is occurring, eventually, if we aren’t careful, we will basically age ourselves out from the standpoint of new farmers. And we have to have that resource for that production to occur, with the farmer being able to find that resource. Whether he’s new or beginning or older, he has to have that opportunity of a resource.

Dee Shore (04:51):

In some cases, the next generation behind these farmers aren’t interested in farming, and eventual heirs who are interested can face challenges if careful succession and transfer plans for farmland and equipment haven’t been made.

At North Carolina State University, Extension Assistant Professor Andrew Branan provides educational programs designed to help ensure that good planning can take place. He offers an agricultural and natural resources law portal that covers such topics as estate planning and administration, leases and farm tenure and asset transfer agreements.

Andrew Branan (05:33):

I see my role in extension as a legal specialist as helping educate the farm production and landowning base on the legal issues that can trip them up and reduce the productivity of their land — either take land out of production, make it harder to farm, or for those going-concern farms themselves who are already participants in the economy, having them be disrupted and those assets have to start over somewhere else in the marketplace.

Dee Shore (06:03):

Branan is especially concerned about issues that arise when a farmland owner dies without a will and when land is left to heirs in what he refers to as the “share-and-share-alike” arrangement. Both situations present challenges for heirs who’d like to continue farming. Branan recommends several legal tools for landowners interested in enabling such heirs to carry on the family tradition. Those tools include option arrangements that give an heir who’s interested in farming the opportunity to purchase needed land from siblings. Farmland owners can also establish limited liability corporations, or LLCs, and trusts.

Andrew Branan (06:49):

If you do something like place land in an LLC, you can give out interest over time to succeeding heirs to build their equity and eventual control as the elder generation exits from the scene. Another tool is use of trusts. In the realm of large farm succession, where you have a large going-concern farm and there’s a lot of equipment and the farm needs to operate at a large level in order to use that equipment and pay for that equipment, I favor revocable trusts, because doing so allowed for there to be a bit more thought and a bit of a timeout before an asset’s transferred in the minute of death from one generation to another. You’d have someone in the middle, a trustee, that would follow the instructions but also had some discretion to make sure that those assets were channeled to who they needed to go to.

Dee Shore (07:45):

To help heirs navigate legal issues, Brannan is developing a workbook tentatively titled “So You Have Inherited a Farm.” And at the same time, he’s working to help those who want to enter farming by building a farm development resource portal. The website will address questions new farm developers have about land, regulations, markets, financing, taxes and more.

Another effort that’s aimed at ensuring a viable and productive agricultural future for North Carolina is the one that Dewitt Hardee helps manage at the state’s agriculture department. The Agricultural Development and Farmland Preservation Trust Fund was created in 2005 by the General Assembly. It falls under the purview of the state’s agriculture commissioner and is advised by committee of farmers, commodity leaders, university representatives and others.

Dewitt Hardee (08:42):

The trust fund is basically set up by statute to do two things – one is to preserve basically the lands of the state and also to provide availability of funds for ag development to sustain family farms.

Dee Shore (08:58):

The trust fund awards grants for agricultural planning, agricultural development projects and agricultural conservation easements, which are deed restrictions that landowners voluntarily placed on their property. Conservation easements provide farmers with some tax benefits and may help them transfer their operations to the next generation. Funding also goes toward limiting subdivision, non-farm development and other uses inconsistent with commercial agriculture.

The trust fund works in partnership with a range of stakeholders, including soil and water conservation districts, North Carolina Cooperative Extension and nonprofit land trust organizations. It also partners with military and federal agencies like the U.S. Department of Agriculture and its Natural Resources Conservation Service to develop matching funding sources. Six regional field representatives are available to meet with landowners, discuss options and work with the land trust community to find preservation solutions.

Dewitt Hardee (10:07):

If a landowner has a thought, they want to meet with somebody or get more information, they can go to the ADFP Trust Fund website, and that’s at www.ncadfp.org. And there’s a little place they can click on and fill out a little document, and we will have one of those regional representatives go out and make contact with them and describe what conservation is and help them see the visual picture of what conservation easements are and how that might be applicable for their farm and what their interest is for future generations they may be looking to preserve their lands for or continue to transition that land to another generation.

Dee Shore (10:52):

Another organization that works to help landowners keep their land in farming is NC FarmLink offered by NC State Extension. Led by William Hamilton and Noah Ranells, the program is designed to bring together people who own agricultural lands with those seeking that land. Central to the program is an online database that allows landowners and farm seekers to connect through profiles that explain what they’re looking for. The database is accessible at ncfarmlink.ces.ncsu.edu.

Ranells explains why the program was started.

Noah Ranells (11:34):

In times past, the intergenerational nature of farm transition was clear. In many cases, there was always someone in the family who maybe wanted to stay on, and I’m talking back probably 50, 60 years ago. So that farm transition was more secure and safe, and the farmland was less likely to be put at risk in terms of being sold out from production farming.

As North Carolina, just like everywhere else, developed, a lot of people have chosen other opportunities off the farm, farm kids – farm children – grow up and in some cases find their path in life that doesn’t involve farming. And in some cases, they move away from the farm and out of North Carolina.

At the same time, we have a really strong interest in what I would say, non-historical farmers, people who are coming to farming and want to, either mid-life career change folks or college-age people, who feel that they want to farm. And, of course, our job is to encourage people to take a hard look both on the landowner’s side and the farm seeker’s side – why they want to farm, why they want to keep their land in farming. We try and help people along provide resources on our website so that they can consider the ins and outs of connecting to a farm.

Dee Shore (12:57):

Sometimes Ranells and Hamilton work with the landowner and farm seeker to explore options. But sometimes website visitors seal arrangements on their own. Usually there are about 50 to 70 owners actively using this site, while there are about 3,000 registered farm seekers. Thousands use the site each month, and the number is rising. Hamilton says their interests vary.

William Hamilton (13:24):

We work with a whole gamut of farmers, a large percentage that are relatively new to farming and then those that grew up on farms and went off to college or technical school and have come back and finding the farmland around the farms that they once knew and grew up on are being converted to housing and they don’t have enough land to expand beyond their fathers or their grandfather’s herd of beef cattle and it’s not enough to support the family. And so they’re looking for land as well.

Dee Shore (13:51):

NC FarmLink doesn’t require site users to report whether they’ve made successful connections, but anecdotally at least, the system is working. Here’s Noah Ranells again.

Noah Ranells (14:05):

I can be talking to them because they’re a farmer who happens to be presenting at the land ownership event for new farmers. And they said, “Oh yeah, I found my connection on FarmLink.” I feel really great because it’s working, and this was a single farmer who found a connection in Asheboro area, young farmer. And she used FarmLink without us ever knowing that she was using it and found a great match, and now she’s a leader in the community for farming.

Dee Shore (14:38):

Other FarmLink successes include a grower who’s using part of the Yadkin Valley Farm to get started in agriculture; a couple who came to Orange County from the Northeast and is now selling farm goods to a specialty grocery store and at farmer’s markets; and a farm family in Guilford County that found neighboring property where it could expand its cattle operation.

Mary Ogburn, a Winston-Salem resident with land in fast-growing Lewisville, used NC FarmLink to find a local grower to lease her farmland earlier this year. Along with her siblings, she’d inherited the property about 20 years ago and wanted to keep it in farming. However, the previous farmer who’d leased the property failed to pay for a year. So Ogburn wanted to find another farmer interested in leasing additional land.

Mary Ogburn (15:33):

I don’t know what I would have done quite honestly if I had not stumbled across FarmLink, because I had no idea how to locate someone who would be interested in farming the land. It’s a tremendous communication tool, and obviously farmers look at. I hope I’m not looking for another farmer in a couple of years, but if I am, I would go straight back to FarmLink.

Dee Shore (15:59):

When it comes to the future of farmland, access and affordability in North Carolina, the experts I spoke with for this episode stress the importance of planning, whether it be by farmers, landowners or governments. As Ranells put it:

Noah Ranells (16:15):

So in terms of deficit, I’d say there isn’t a deficit, but we are losing it. And if we’re losing it, we have to be aware of how we can maintain it. And the best way to maintain farmland is to keep it productive and profitable.

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Dee Shore (16:35):

Thanks for listening today, and we hope you’ll join us again for the next episode of Farms, Food and You. To learn more about the College of Agriculture and Life Sciences and our podcast visit go.ncsu.edu/farms. While you’re there, share your thoughts. We’d love to get your ideas and to hear what topics you’d like for us to explore in the future.

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