Farmland Tenure: A Tool Kit

Farmland Tenure: A Tool Kit

Summary

In 2005, California FarmLink advanced work on aspects of all project objectives. Staff discussed implementation of the project with partners. The work emphasized researching, facilitating development and implementation of various land tenure models for small-scale farmers. Several projects advanced with individual farmers that reflect tenure models. Efforts to translate tenure models into Spanish began with translation of comprehensive lease language. Work with these farm-specific projects will be summarized and used for the Tenure Models Handbook later. Development of policy options was advanced to facilitate access to land tenure for farmers through work with California’s Coastal Commission and with representatives of other farm link organizations.

Objectives/Performance Targets

Project Objectives
Goal 1: Increase knowledge of trends in land tenure arrangements utilized by California farmers.
A. Review and analyze 1992, 1997 and 2002 Census of Agricultural Data (Mo. 3-7)
B. Distribute surveys to 500 California agricultural producers on obstacles & solutions to obtaining land tenure and connections between tenure length and stewardship practices. (Mo. 1-5)
C. Survey producers and agricultural professionals serving them regarding policy options to facilitate easier access to long-term tenure options. (Mo. 13-18)

Goal 2: Assist at least 500 farmers and ranchers in developing long-term land tenure agreements by providing a clear, concise guide to land-tenure options.
A. Compile a handbook on land tenure models including case studies and sample legal language.
B. Translate key sections of land tenure handbook to Spanish. (Mo. 10-12)
C. Present land tenure information at 6 trainings for beginning farmers. (Mo. 8-24)
D. Distribute land tenure model information and case studies to at least 500 farmers. (Mo. 10-30)
E. Post land tenure models, case studies and legal language on the World Wide Web. (Mo. 12-16)
F. Survey and interviews at least 30 recipients of the handbook to evaluate impact.(Mo. 30-33)

Goal 3: Provide key decision-makers with policy options for increasing long-term tenure opportunities for beginning farmers.
A. Survey at least 20 public agencies (special districts, etc.) to study the legal and social barriers to leasing lands to farmers, and interview representatives of at least 3 public agencies that do lease land to agricultural producers to learn about their process and the tools they used. (Mo. 13-18)
B. Distribute a summary of recommendations for leasing land to beginning farmers to at least 20 public agencies and governments in California, and post on the World Wide Web. (Mo. 16-22)
C. Analyze the applicability of policies around the country that facilitate land tenure. (Mo. 13-18)
D. Develop a list of specific policy recommendations appropriate to California, distribute to policy decision makers and make findings available from the World Wide Web. (Mo.18-22)
E. Share project findings, land tenure publication and policy recommendations with organizations from 20 states through the National Farm Transition Network. (Mo. 12 and 24)

Accomplishments/Milestones

As proposed and approved, original project goals are in Italics. Updated information related to specific objectives is included in the section below the respective goal and/or objective.

Goal 1: Increase knowledge of trends in land tenure arrangements utilized by California farmers.

Early in the year, California FarmLink staff met with producer partners in the project to discuss plans and gain input for the remainder of the project period. This meeting helped to inform development of surveys on obstacles and solutions related to land tenure and related stewardship practices. In addition, the principal investigator spoke to a representative of the Census of Agriculture to advance a request for additional queries. Progress on this goal was limited in 2005 due in part to issues related to personnel capacity. A new team member was recruited to the California FarmLink staff to assist with advanced analysis of Census of Ag, as well as work on objectives B and C.

Note: As reported in the 2004 annual report on the first six months of activity, data entry had been completed and preliminary analysis was done with assistance of a Graduate Student Intern working with the principal investigator.

Goal 2: Assist at least 500 farmers and ranchers in developing long-term land tenure agreements by providing a clear, concise guide to land-tenure options.

Work on development of the Land Tenure Models Handbook advanced in the form of development of practical tenure models and associated legal documents needed to implement them (i.e. leases or easements). Key models we researched, developed or implemented this year included: variations on crop-share leases; acquisition of tenure on farm land with an agricultural easement; and transition of a long-term lease from one CSA manager to another.

Working with California’s Coastal Commission and building on work done through a previous WSARE grant (Professional Development Program), California FarmLink was able to facilitate the development of public policy related to adoption of innovative conservation easements. Specifically, we spoke with Coastal Commission staff and presented at a large workshop in November that focused on discussing the innovative “affirmative easement language” as a means to facilitate access to land for small-scale farmers seeking to secure long-term tenure in the coastal counties where land can be valued at more than $40,000 per acre for sale as ranchettes to non-agricultural buyers.

A new land tenure model was explored and researched in the summer and fall months related to purchase of an easement to farm by a private farmer. Typically, agricultural conservation easements are held by land trusts or public entities, which purchase the development rights or receive them as a charitable donation. The new model would be more like a standard real estate easement to place a driveway or powerlines on part of the land: it emphasizes what the easement holder can do in terms of productive uses. Another analogy is the way in which mineral or water rights can be separated from other aspects of landownership (especially in the Western states). The principal investigative research regarding this model included speaking at length with two independent expert land-use attorneys regarding the model, as well as a colleague with the New England Small Farm Institute. All agreed that the approach could be viable, but none had heard of this approach before. With this model, a farmer holds the easement and may be able to build equity over the years he or she farms the land before selling the easement to another farmer upon retirement. The topic arose again at the Coastal Commission hearing referenced above. Significantly more work regarding this tenure model is planned during 2006.

In Brentwood, in the Contra Costa County area, FarmLink staff had several meetings with representatives of Happy Farms, a small Community Supported Agriculture farm on leased land that is transferring management to a new farmer. This represents a complicated model because there are three parties involved in decisions related to the farmer’s tenure. These include the standard partners: landowner and farmer lessee. However, it is somewhat more complex because a third interest, a management committee made up of CSA members, will have a significant role in determining who is selected to lease the land and whether they will be able to secure long-term tenure.

FarmLink assisted a father and son team in purchasing a ten-acre farm with a commercial produce stand in San Benito County. FarmLink introduced the aspiring farmers to a non-profit lender, and worked with the lender, a realtor and the aspiring farmers to secure a FSA-guaranteed loan. The loan was secured using equity in homes owned by the father-son team, as well as $9,600 toward the down payment saved by the buyer through FarmLink’s Individual Development Account (IDA) program. An innovative aspect of the farmland purchase is the use of family members to help a beginning farmer secure credit to purchase a farm. (An interesting twist in this example is that the adult children of the beginning farm owner were co-signing the loan instead of the more commonly seen signatures by “mom and dad” for a young, beginning farmer.) This is a rare example of a former farm worker buying a significant-sized ranch in California’s coastal area. The property was sold with an agricultural easement already on it. Still, the purchase price was approximately $900,000, a price level that ironically represents the need to advance other strategies including leasing.

In San Benito County, FarmLink began working with a monolingual Spanish speaking San Benito County grower here in late 2005. With her family, she runs a Community Supported Agriculture program and sells direct to restaurants and retail outlets in the San Francisco Bay Area. In the beginning of the year, one of her CSA members from a San Jose Catholic church purchased a 14-acre farm and gave her a three-year option to buy it at the purchase price. She is paying the mortgage and taxes on the farm and working with FarmLink to come up with her own financing. This tenure model potentially involves a land trust holding a conservation easement, the value of which is donated from members of the CSA community. The hope is that the family who purchased the farm and other CSA shareholders will consider donating part of the easement value to a land trust for the tax write-off. We have reviewed other CSA models where CSA shareholders have helped their farmer to purchase land, including two carefully studied examples in Mendocino and Santa Barbara Counties.

The owners of Green Oaks Creek Ranch, a 60-acre direct market farm in Santa Cruz County, turned over much of the management of the operation to two employees, experienced aspiring farmers in their own right. In 2005, FarmLink worked with the owners and managers to develop a means of compensation reflecting the beginning farmers’ own expenses and income on a Schedule F form in order to begin a track record as farmers instead of employees. This will help them to obtain financing and/or participate in FarmLink’s IDA program, as they prepare to lease or purchase land of their own.

Happy Valley Farm contacted FarmLink in December regarding a historic 200-acre Santa Cruz County apple ranch owned as a general partnership with 20 partners. About 60 acres is arable and the partners live in houses scattered throughout the farmland. FarmLink began to assist the owners in developing a strategy for transition of the farm, which will include exploring crop share and cash lease arrangements, with the possibility of directly hiring the Latino crew who has worked the apples in the past under a hired manager.

FarmLink staff approached owners of a 160-acre farm in Gilroy regarding leasing several acres to a beginning grower. A match was made with a local aspiring farmer. With FarmLink’s assistance, they settled on an arrangement leasing half an acre in a cash lease and 2.5 acres in a crop share arrangement. The project includes the beginning farmer growing his own vegetable crops on 0.5 acres, and hiring laborers as necessary from the larger operation. A crop-share lease was entered into through which the owner and beginning farmer share all expenses, labor and marketing and split profit or loss at the end of the season. This tenure model was coupled with a mentorship component. This experience proved valuable for both the landowner and the beginning farmer. On behalf of the landowners, California FarmLink also conducted research to determine if entering into a lease agreement would affect the property tax rate under California’s Williamson Act (state legislation limiting property tax for agricultural producers).

In spring 2005, California FarmLink outreach staff worked with a farm owner and employee on an employment contract that will include incentives for the employee to continue for a second year with a crop-share lease arrangement.

Work on objective B has advanced simultaneously with development of tenure models. Specifically, in Spring 2005 materials on land tenure including a comprehensive lease with an option to buy and crop-share components was translated into Spanish with the assistance of professional translators and hired staff. This was used to help a Latino farm worker lease land for his own farm business that he began with assistance of the project to run totally independently from the large ranch where he works as an employee.

We have begun to distribute land tenure model information. This will be the focus in 2006 even before final publication of the Land Tenure Models Handbook.

Note: California FarmLink staff conducted several trainings addressing the topics of agricultural leases. However, these did not focus on dissemination of materials developed under the WSARE project we are reporting on herein and were in some cases supported by other funding. As a result, we are not describing these projects in detail at this time. The majority of the trainings described in section C will be offered later in the project period.

Goal 3: Provide key decision-makers with policy options for increasing long-term tenure opportunities for beginning farmers.
The principal investigator met with graduate student P. Archie by phone and in person on several occasions to discuss survey design for the survey to public agencies and private land trusts that may lease land to farmers.

Preliminary drafts of policy recommendations were developed in Summer of 2005 and discussed with colleagues at the National Farm Transition Network meeting and with various partners in California.

Impacts and Contributions/Outcomes

The description of research and development of models under Milestones above illustrates how the project team is addressing actual challenges faced by beginning farmers/producers in such a way as to build a resource bank of case-studies, legal documents and other materials. The work to assist the seven producers described above to obtain land tenure will be utilized for general use of a large number of producers. The larger impact on producers from the handbook, workshops and policy recommendations can not yet be estimated at this time in the project’s life cycle.

Collaborators: