Farmland Tenure: A Tool Kit

Farmland Tenure: A Tool Kit

Summary

In 2006, California FarmLink (CFL) made significant progress on aspects of all project objectives. The emphasis was on researching and facilitating development and implementation of various land tenure models for small-scale farmers. Several projects moved forward with individual farmers as a result of work on tenure acquisition strategies that other family farmers can use. California Farm Link will summarize the work with these farm-specific projects and use it for the Tenure Models Handbook later. CFL advanced development of policy options that will facilitate access to land tenure for farmers by working with representatives of other farm link organizations and partner groups. The project team collaborated with organizers of three key state-wide conferences offered in the first three months of 2007 to ensure that findings of the project will be reported and model strategies described per the original workplan proposal.

Objectives/Performance Targets

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

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 Agriculture, as well as work on objectives B and C. As of the end of the reporting period 9/30/06 the Census of Agriculture staff still had not delivered a final version of the special tabulations requested in 2005. These arrived in October and have been analyzed by FarmLink staff member John Guardino in consultation with the principal investigator. The draft report language has been prepared and staff are working to finalize it before distributing it, with other components developed through the project, to partners for peer review. We have not yet moved ahead with the survey of producers about obstacles to securing tenure, and are reevaluating the best way to accomplish this.

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 the Land Tenure Models Handbook advanced by means of the development of practical tenure models and associated legal documents needed to implement them (i.e. leases or easements). Key FarmLink project team members Steve Schwartz, Reggie Knox, Kendra Johnson and John Guardino held several meetings to refine and expand the list of tenure models for the handbook. Team members then interviewed farmers for the case studies. Draft case studies have been prepared for six models and others are in progress. Additional materials are still being gathered for specific case studies including legal documents used in implementing the models. Due to the long duration of the project some of the partners originally expected to assist with peer review may no longer be available. However, the project team has continued to engage qualified individuals who can assist with preparation or review of key documents. These include John Davis, a land use and contracts attorney working with Northern California Legal Services in Sacramento.

Key models we researched, developed or implemented this year included: leases with an option to buy; a land contract sale (also known as an installment sale); and an Employee Stock Ownership Plan set up to facilitate the transfer of land from one generation to the next. The following provide highlights of work related to these and other models that we plan to draft as case studies for the Land Tenure Models Handbook.

Monterey County: FarmLink worked closely on a farm purchase with a client and her husband. Both are monolingual Spanish speakers with lengthy experience on family farms in Mexico and as farm workers in California. She is developing a small organic farm, which is in its third year of operation. The couple contacted FarmLink when the process of purchasing a 10 acre farm in southern Monterey County, offered at $250,000, seemed overwhelmingly complex. We helped them navigate through a situation where neither the seller nor the buyer had a realtor. FarmLink assisted them in writing a business plan for potential lenders. We then helped identify needs of the title company, find a Spanish speaking attorney to solidify a purchase agreement, gather information from a 1031 like-kind exchange facilitator and interface with lenders. (California law requires real estate purchase agreements be written in English, a large hurdle for Spanish speaking buyers and sellers). Securing a Spanish speaking land-use attorney to assist, we helped the two save thousands of dollars in realtor and lender fees. We worked with a partner organization, which ultimately approved a USDA Farm Service Agency guaranteed loan of $175,000. The family will use Farm Link’s Individual Development Account (IDA) funds as part of the down payment. We continue to assist them in securing private bridge financing until they can sell a small home they own to cover the remainder of the farm purchase price. This model of “flipping” a house to build equity to buy a farm is an effective strategy for many small farmers.

Mendocino County: On a 212 acre hilly parcel near Boonville, with approximately 15 acres suitable for row crops, FarmLink connected a beginning farm couple with non-farmer landowners. The farmers relocated to the area and are working the property with the landowner and developing farm infrastructure. They have built fencing, a chicken coop, planted fruit trees and berries, etc. With FarmLink support, the two couples are moving forward on a long-term tenure agreement that may include a Community Land Trust. The landowner is offering a partial land ownership deal and a partnership in the LLC, which will offer very favorable terms to the young farmers.

The project team worked with organizers of the Ecological Farming Conference, the California Farm Succession Conference and the Small Farm Conference to develop workshops where FarmLink will present information from the Land Tenure project and tool kit. These are the three key statewide conferences offered in 2007. They are located in the major farming regions of the Central Coast and Central Valley in order to be accessible to family farmers. All three conferences will be held during the first three months of 2007. The conference sessions and panels organized as part of this project will ensure that findings of the project will be reported and model strategies described per the original workplan proposal.

Note: California FarmLink staff conducted several trainings that addressed the topics of agricultural leases and other tenure acquisition strategies in 2005 and 2006. 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 trainings in detail at this time.

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 Patrick Archie by telephone and in person several times regarding the survey of public agencies and private land trusts that may lease land to farmers. Lists were accumulated for some 1500 potential respondents. After finalizing the survey in conjunction with the principal investigator, graduate student Patrick Archie, the project team organized distribution to public agency and private land trust personnel. The survey was distributed in early summer and the project enjoyed a high response rate. In-depth interviews were held with approximately eight of the most relevant survey respondents. The graduate student analyzed the data and drafted a preliminary report, some of which he intended to use as part of his doctoral thesis at University of California Berkeley.

CFL developed preliminary drafts of policy recommendations in discussion with colleagues in the National Farm Transition Network, the Sustainable Agriculture Coalition, the California Farm Bureau and other partners in California. These discussions took place primarily in July and August 2006.

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. Through the handbook of land tenure options, the information we have gathered and the case studies will be available to small farmers throughout California. The larger impact on producers from the handbook, workshops and policy recommendations cannot be fully assessed at this time in the project’s life cycle. However we expect that some of the findings will help to impact policies of the California Coastal Commission, the California State Government and the federal Farm Bill.

Financial Narrative

Reimbursable project expenditures for the 1st, 2nd and 3rd quarters of 2006 were submitted earlier totaling $27,550.34 and an invoice for the 4th Quarter was prepared for mailing on the 31st of December, 2006 totaling $15,804.90 in reimbursable expenses. This brings reimbursable expenditures to date since the beginning of the project to $82,676.77. No additional match expenditures are being reported at this time.

Fringe includes allocated portion of accrued employee leave based on the percentage of time during the project period spent directly on the SARE project compared to total work hours during the project period. Additional detail is available upon request.

Accomplishments/Milestones

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

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. Through the handbook of land tenure options, the information we have gathered and the case studies will be available to small farmers throughout California. The larger impact on producers from the handbook, workshops and policy recommendations cannot be fully assessed at this time in the project’s life cycle. However we expect that some of the findings will help to impact policies of the California Coastal Commission, the California State Government and the federal Farm Bill.

Financial Narrative

Reimbursable project expenditures for the 1st, 2nd and 3rd quarters of 2006 were submitted earlier totaling $27,550.34 and an invoice for the 4th Quarter was prepared for mailing on the 31st of December, 2006 totaling $15,804.90 in reimbursable expenses. This brings reimbursable expenditures to date since the beginning of the project to $82,676.77. No additional match expenditures are being reported at this time.

Fringe includes allocated portion of accrued employee leave based on the percentage of time during the project period spent directly on the SARE project compared to total work hours during the project period. Additional detail is available upon request.

Collaborators: