Farming on the Fringe

When most people think of California and its economy, thoughts usually turn to Hollywood and the high-tech industries in Silicon Valley, rather than the acres of avocadoes and endless miles of cattle ranches stretching throughout the state’s Central Valley. Farming is somehow associated more with the Midwest Corn Belt than the Golden State. California, however, is the most agriculturally productive state in the union, and agriculture is the top industry in California. California also has one of the nation’s fastest growing populations. Rampant expansion threatens to counteract the measures the state has taken to protect its lucrative farmland - the Williamson Act chief among them. Might suburban sprawl kill the Golden State‘s biggest industry?

Cash Crops Under Pressure

With the state’s 2002 market value of agricultural products at nearly $26 billion, the conversion of California’s fertile lands to urban uses has alarmed policy-makers, non-profit organizations, academics, and private citizens alike. An American Farmland Trust study quantifies the threat of residential development to California’s farms. The organization ranked agricultural regions throughout the country according to an index that takes into account both an area’s agricultural value as well as its level of local development pressure. California has three regions that placed among the top 20 in this index: the Central Valley (1st), the Central California Coastal Valleys (15th), and Imperial Valley (17th). According to University of California-Davis professor Ted Bradshaw and University of Colorado-Denver professor Brian Muller, as much as 1,035,000 acres of Central Valley farmland will be converted to urban uses by 2040, including over 600,000 acres of “prime” or “statewide important quality” land (the two most productive types of farmland as defined by California’s Department of Conservation).

California has already lost well over 11 million acres of farmland since its peak in the 1950s. When the post-World War II building boom squeezed farmland out of much of the coastal regions, the agricultural industry colonized new lands in the Central Valley. Today, however, as the Central Valley sprouts homes and warehouses - with population expected to triple by 2040 - no new valley remains to replenish California’s disappearing farmland. Improved farming methods and greater labor productivity had helped to compensate for the loss of acreage, but productivity per acre has plateaued. Overall output will eventually decline as the best farmland continues to be nibbled away by sprawl and as water becomes an increasingly scarce commodity. In some areas of the state, the cost of installing a new water meter alone has become expensive enough to prevent any new farming operations.

Meanwhile, constant bickering with neighbors is often the last straw for current edge farmers. Urbanites who have resettled near farmland enjoy its open-space aesthetic and tend to disregard its more utilitarian function as a place of business and food production. Homeowners complain about farming noises, odors, and chemicals while farmers have to deal with trespassers, theft, and mischievous pets. Even with Right-to-Farm ordinances in place, which protect farms from new regulations and lawsuits against the noise and odors, these tensions, plus the lure of money offered by developers, are often enough to push farmers into selling their land. As Eric Hvolboll, a Santa Barbara County avocado farmer and eighth generation Californian puts it, “There are not many farmers so invested in their work that they can justify the opportunity cost of not selling…Why risk your life, doing a dangerous job, working 60 hours a week, when you could make more money doing nothing?”

Conservation Counter-measures: Easements and the Williamson Act

California has several programs in place that are designed to combat the loss of valuable farmland. The California Farmland Conservancy Program (CFCP), for instance, pays farmers to put their lands in easement and has yielded roughly 24,000 acres thus far. Similar efforts at the local level have acquired approximately 53,000 more. These easements guarantee perpetual protection of valuable agricultural land; however, they cover only about 0.26 percent of California’s 30 million acres of total private farmland. In contrast, the state of Maryland in 2003 had 2.1 million acres of farmland with 282,000 acres in a similar state-level program and 209,000 acres held in local programs, providing closer to 23 percent permanent protection.

In place of a serious conservation easement program like Maryland’s, for 40 years California has relied heavily on the California Land Conservation Act - better known as the Williamson Act in honor of its assemblyman author. The Williamson Act permits local authorities, such as county governments, to contract with private landowners to restrict the use of specific land parcels to agriculture or open space. Under the act, landowners receive lower use-based property tax assessments rather than being assessed at the full market value of the land. All agricultural lands are eligible for Williamson Act contracts provided they meet minimum parcel requirements, ranging from 10 acres to 100 acres depending on the quality of farmland and local county regulations. Enrolling in the program is easy: in a participating county or city, a potential landowner need only file an application with the local government. Assuming the land is eligible, it is usually accepted. Under normal conditions the contract automatically renews each year. Local governments, in turn, receive annual compensation from the state for their lost tax revenue.

The state, however, does not pay back the exact amount that the locality has lost. Rather, the localities receive $1-8 per acre depending on the quality of the land and its proximity to incorporated cities. Thus localities rarely, if ever, recover the tax revenue they have foregone. Nevertheless, California counties are relatively fortunate since most states offer no repayments whatsoever to localities that have similar programs.

But perhaps the greatest weakness of the Williamson Act is that, since enrollment as well as termination of the Williamson Act is voluntary for landowners, the Act does not offer permanent protection of farmland. Though joining is simple, it is time-consuming for landowners to withdraw from the program, delaying conversion but not denying it. Non-renewal of a Williamson Act contract requires a nine-year phase-out period whereby taxes are gradually shifted back from use-value to market-value rates. During this time, the land in question is still ineligible for development. Non-renewal initiations, therefore, act as red flags, indicating where future development will likely occur.

The Williamson Act’s Subtle Value

Currently, there are about 16.9 million acres under Williamson Act contract, well over half of all private agricultural land in California. An initial look at the history of these lands might imply that this land faces no urgent threat of development: the Williamson Act acreage numerically surpasses the land under contract ten years ago, and from 1992 to 2002, only about 280,000 acres converted from agricultural uses to urban uses out of a pool of 30 million acres of agricultural land. California’s constant budget woes, and the allure of possible tax revenue from urban growth, might lead legislators who are looking trim the budget to seize on these statistics and to ask why California needs the Williamson Act, or any agricultural preservation measures at all.

While the rates of conversion are low so far, they are clearly accelerating. The period from 1992 to 1994 saw 30,000 acres paved over, while the 2002 to 2004 figures report 94,000 acres converted, a three-fold increase in rate. Just where these contracted lands are located is of even greater importance. Land use lawyer Susan Petrovich claims, “The Williamson Act is very effective for non-prime parcels like ranches out in remote areas because it keeps development from leapfrogging into the rural areas and keeps it closer to already developed areas.” The lands that have lost protection tend to be concentrated closer to established urban centers, in many cases replaced by tract housing or industrial sites. Fewer conversions takes place in lands distant from urban clusters, but those areas have always offered less attraction for speculators or developers than those on the city fringe, and arguably require less strenuous measures of protection. Unfortunately, these distant parcels are mostly comprised of less valuable grazing lands. The best farmland tends to ring land-hungry urban areas, making the lands outside of California’s cities prime both for farmland and real estate - a competition that agriculture just can’t win. Between 1992 and 2002, prime farmland averaged an urbanization rate of nearly 0.2 percent a year - almost three times faster than the rate for more remote grazing lands. As Goleta farmer John Lane, manager of Lane Farms, says, “Once a neighborhood is built next to a farm, it is only a matter of time before the farm succumbs to development.”

The Need for Farmland Preservation and the Pressure to Develop

What ultimately discourages greater enrollment of inner-ring farmland is the one-two punch of financial pressure and the strictness of enrollment regulations. Lest we forget, Mike Lunsford of the Gaviota Coast Conservancy points out, “Economics is what drives the farming business!” Before accusing Joe and Jane Farmer of greed, one should understand the kind of pressure they find themselves under. For many it is not a matter of striking it rich so much as they can no longer afford to stay in business. Susan Petrovich relates a situation in which the City of Lompoc, on the central coast of California, used eminent domain to build a road across a small farmer’s property. As the construction cut into his overall acreage, the farmer became ineligible for the Williamson Act. His increased tax assessment on top of the regular operating costs made his farm financially infeasible. Left with mounting debt, he had no choice but to develop. This common situation underscores the problem with the Act’s ambitious acreage standards. Since development nibbles away farmland
a few acres at a time and parcels near urban areas tend to be smaller from the outset, the Williamson Act could benefit from more flexible acreage requirements.

Other factors contribute to farmers’ decisions to finally give way to urban expansion. In order to better understand their motivations, Alvin Sokolow conducted a survey for the California Department of Conservation in the 1990s of those who had left the Williamson Act. Although his findings were not completely surprising (development interests were the primary reason), he did discover less obvious motivations. For instance, younger generations were less interested in farming than their parents, a trend reflected in declining rural populations. Also, those who did not live on their land or leased their land to others were more likely to opt out for reasons of development than those who lived on their own farm. Jim Davidson, a Santa Barbara estate lawyer, remarks that by the third generation, a family farm usually has owners living all over the country. As Sokolow discovered, those who do not live on their farms tend to see them as more of a commodity than a lifestyle.

Mike Lunsford laments how this trend has changed Santa Barbara County’s rural personality: “Landowners are no longer farmers, and farmers are no longer landowners. Instead, they are becoming sharecroppers and the family farm is dying.” With the demise of the family farm, who will fight to save California’s farmland? The owner living in San Francisco? The laborer working on the farm? The new suburban homeowners who love the view but can’t stand the noise of tractors or the smell of pesticides?

But should we care about preserving farms in the first place? Although urban development seems to promise greater tax revenue, there are numerous economic and moral incentives for protecting prime farmland. Around the world, prime farmland is rapidly disappearing due to poor farming practices that erode topsoil and because its flat, well-drained areas are ideal for development. As underdeveloped nations undergo staggering population growth, they will likely rely ever increasingly on U.S. agricultural products. Also, with dangerous diseases such as avian flu looming, increased food security seems prudent. In more domestic terms, farms tend to cost local governments less than the taxes levied on them while housing developments cost more, given the high cost of infrastructure and services they require. Farms often provide landscape viewsheds and can even promote tourism, whether in the wine country of California or the Amish country of Pennsylvania. They are places of business that provide jobs as well as support ancillary services such as agricultural equipment suppliers, veterinarians, feed and fertilizer consultants, and accountants. Lastly, though they use a tremendous amount of water and oftentimes pesticides, many farms serve the environment by protecting topsoil, preventing runoff, and acting as animal habitats.

The ultimate question is whether Williamson Act tax breaks can really compete with the prospect of millions of development dollars. Although millions of acres remain enrolled, the Williamson Act is in the end a voluntary measure, and a clear pattern of withdrawal has begun around cities. Unfortunately, if the Williamson Act protects only distant farms, sprawl can continue unabated; the urban footprint will eventually creep up on once-distant farms, and then they too will leave the Act and develop, allowing the cycle to continue. The rural generation gap will worsen in turn. Those same bright lights that have been luring farmers away from their plows for centuries will only intensify for tomorrow’s youth because there will be less and less to forsake - with significant economic, social, and environmental
repercussions.

The author would like to acknowledge the contribution of Ms. Gail Osherenko and Ms. Noelle Boucquey, who conducted interviews with several farmers.

American Farmland Trust. “The Farmland Protection Toolbox.” Washington, D.C.: Farmland Information Center, 2003. Online at www.farmlandinfo.org

Bradshaw, Ted K., and Brian Muller. “Impacts of Rapid Urban Growth on Farmland Conversion: Application of New Regional Land Use Policy Models and Geographical Information Systems.” Rural Sociology 63.1 (March 1998): 1-25.

California Department of Conservation, Division of Land Resource Protection: www.consrv.ca.gov/DLRP

California Department of Conservation DLRP. “The California Land Conservation (Williamson) Act 2004 Status Report.” Sacramento, California: California Resources Agency, 2004.

National Agricultural Statistics Service (NASS), Agricultural Statistics Database: www.nass.usda.gov