1. An Overview of Farmland Protection Tools under The Agricultural Development and Farmland Preservation Enabling Act
Theodore A. (Ted) Feitshans
Department of Agricultural & Resource Economics
North Carolina State University
2007

2. Support
Additional support provided through the “Understanding the Farm Business Planning and Tax Implications of Federal and State Conservation Incentives” project funded by the Southern Region Risk Management Education Center

3. Public Policy: Reasons to Protect Land Used for Agriculture, Horticulture or Forestry
Promote important industries and related employment
Protect local food and fuel sources
Provide recreational opportunities
Protect environment
Water quality
Endangered species
Biological diversity
Air quality
Carbon sequestration

4. Public Policy: Reasons to Protect Land Used for Agriculture, Horticulture or Forestry (continued)
Protect quality of life
Limit sprawl and associated externalities
Promote efficient delivery of services
Protect fiscal soundness of local government
Better balance governmental ‘portfolio’
Reduce expenditures on subsidies for development

5. Voluntary Agricultural Districts (VADs)
Available to counties and cities
Qualifying land
10-year revocable agreements
Agricultural Advisory Board
County ordinance covers unincorporated areas/City ordinances cover incorporated area
Need for agreements between counties and cities to coordinate farms that fall within both jurisdictions and to address impact of annexations
Cities may recognize VADs in their planning jurisdictions

6. Benefits of VADs
Record notice of proximity to farmlands (only in counties with computerized land record systems that can accommodate this)
Affect on nuisance actions
Official role in county/municipal government
Public education about agriculture
Abeyance of water & sewer assessments (optional, and may be available under other law)
Public hearing on condemnations
Municipalities may amend ordinances to provide flexibility to farms in a district

7. Enhanced Voluntary Agricultural Districts (EVADs)
Conservation Agreement
Includes all terms of a VAD agreement plus:
Irrevocable for 10 years
Automatic renewal for 3 years absent notice as required by the ordinance

8. Benefits of EVADs All VAD benefits
Remain bona fide farm exempt from county zoning even if sales of up to 25% nonfarm product (burden of proof on farmer)
Eligible for a higher percentage of cost share funds under § (b)
Priority consideration for grants from state departments, institutions or agencies
Abeyance of all county/municipal utility assessments

9. N.C. Agricultural Development and Farmland Preservation Trust Fund
Purposes:
Purchase conservation easements (including transaction costs)
Public and private enterprise programs to promote profitable & sustainable family farms
Fund conservation agreements
Fund cost of administering the program

10. N.C. Agricultural Development and Farmland Preservation Trust Fund
Nonprofit conservation organizations – 30% match
County with no countywide farmland protection plan – 30% match
Development tier two or three county with countywide farmland protection plan – 15% match
Development tier one county with countywide farmland protection plan – no match

11. Agricultural Development
Countywide Farmland Protection Planning – statutory elements
List & description of existing agriculture
Challenges to continued family farming
Opportunities for maintaining or enhancing small, family-owned farms & the local agricultural economy
Plans for viable agriculture
Implementation schedule

12. Conservation Easements
Permanent easements
Uniform Conservation Easement Act
Avoid common law restrictions
Avoid real property marketable title acts
Complies with requirements of federal tax law
Conservation agreements/Term easements

13. Conservation Easements
Issues:
Baseline study
Preexisting liens
CERCLA/Abandoned underground storage tanks
Full discussion of plans/objectives/goals
Discussion of plans for transferring rights
Lack of flexibility
Family wealth maintenance/creation

14. Conservation Easements: Maintenance of Farming and Forestry
Adequate income opportunities
Continuation of normal farming, horticultural and forestry practices
Flexibility - changes in practices
Flexibility - changes in laws

15. Conservation Easements (Permanent): Taxation
Property tax
Federal income tax
State income tax
Federal estate tax
State estate/inheritance tax

16. Resources Land Preservation Notebook American Farmland Trust
American Farmland Trust