Ag land conversion

STATE

OF COLORADO

DEPARTMENT OF AGRICULTURE

700 Kipling Street, Suite 4000 Lakewood, Colorado 80215-5894 (303) 239-4100

(303) 239-4125 FAX March 27, 1995 Mr. Brian Werner Poudre River Trust 201 S. College Ave. Ft. Collins, CO 80521

SMART GROWTH-AG LAND CONVERSION PROJECT Dear Mr. Werner:

How does agriculture maintain its land. water. and economic viability. given the pace of growth in Colorado? This complex question is not new and is being discussed in . agricultural organizations and in many commmunities across the state. Many worthwhile

and constructive approaches are already underway at local levels in Colorado.

I write to request your input and assistance to a statewide. task force, created by Governor Romer in January.· The task force was formed to develop incentive-based, voluntary approaches to protecting productive agricultural land and to promote agricultural activity in the state. Final recommendations are expected by fall.

Enclosed is a copy of 20 initial ideas and a feedback sheet prepared by the task force for discussion during the next few months. We seek your assistance in two-way communication with agricultural leaders about these and other ideas as follows:

1. Organizational meeting. We request an opportunity to meet with members of your organization sometime during the next 30-90 days, preferably during an already~

scheduled meeting. The time is flexible and could range from 30 to 90 minutes or more. The session would focus on specific ideas and recommendations that could make a difference. A meeting with a cross-section of your members-or a board meeting or committee meeting-are all excellent options. We will supply copies of the enclosed 20 Ideas packet to you ahead of time, if you wish.

2. Publicity. A news release on the 20 Ideas is also enclosed. We request that your members be informed about the project and invited to share their ideas directly. Copies of the 20 Ideas packet will be sent to individuals upon request.

Please complete and return the enclosed sheet by mail or fax to indicate your degree of interest in this project. We look forward to working with you to develop constructive, practical ideas that will keep agriculture strong in our state for decades to come.

Thomas A. Kourlis, Commissioner

Roy Romer Governor Thomas A. Kourlis Commissioner Robert G. Mclavey Deputy Commissioner

media release

Colorado Department of Agriculture

March 24, 1995

For information contact funMiller, (303) 239-4100 or Dr. David Carlson, 239-4112

Note to Editor:

11wmas A Kowlis, Commissioner 700 Kipling Street, Suite 4000 Lakewood, Colorado, 80215 (303) 239-4100

A list of individuals to contact regarding the topic of this news release

is

printed on the

reverse side.

COMMENTS SOUGHT ON IDEAS TO CURB AG LAND LOSS

A statewide task force, created by Colorado Governor Roy Romer

this

January, is looking for citizen comment on ideas to

stem the loss of farmland and keep agriculture viable in the state.

"Colorado's agriculture is facing challenges as the state's population grows and pressures increase

to

convert agricultural

lands

to

residential

and

commercial uses," said TomKourlis, Colorado's agriculture commissioner. "The Governor's task

force is looking at ways to keep farming and ranching economically viable and to keep farmlands productive for

generations to come through voluntary, incentive-based solutions," he said

The Colorado Agricultural Lands Task Force has released a broad

list

of20

preliminary

ideas for public discussion,

including purchase or transfer of development rights programs, voluntary agricultural enterprise districts, strengthened

right-to-farm legislation, and expanded activities in marketing and value-added processing. The public comment

period

nms through July 15th.

Other ideas: streamlined county subdivision review processes to encourage clustering of development as an alternative to

35-acre "ranchettes"; a review of ineffective, costly regulations

that

hamper

farming, ranching, and value-added

processing; and reduced inheritance taxes to ease the transfer of farming enterprises across generations.

fu

its deliberations, task force members are guided by such principles as: profitable opporttmities in agriculture are the

basis for farmland protection; private property rights of landowners must be respected; and solutions must be

environmentally and economically sound, and implementable.

1he

12-page handout includes brief infonnation on Colorado

ag

land conversion trends

and

the economic importance of

agriculture

to

the state; a description of20 ideas for action;

and

a

reader

survey form for gathering comments and more

suggestions from

the

public. The

report

is available by mail or fax from

the

Colorado Department of Agriculture, 700

Kipling St., Suite 4000, Lakewood, CO, 80215; (303) 239-4100; fax: (303) 239-4125.

Governor's Task Force on Agricultural Lands

Mary

Brown,

Chainnan

of the Colorado Air Quality Control Commission, Steamboat Springs; (303) 879-0270

:Mark Burget, Executive Director, The Nature Conservancy, Boulder; (303) 444-2985

Jay Fetcher, rancher, Clark; (303) 879-3713

David Ford, Slllllly Valley Fanns, Center; (719) 754-2487/3457

Alan Foutz, wheat producer, Akron; (303) 345-6679

Kirk Hanna, cattle producer, Pueblo; (719) 382-7830

Cynthia Bickert, Washington County Commissioner, Akron; (303) 345-2701

Eric Johnson, sculptor and

Chairman

of Club 20, Redstone; (303) 963-1962/3790

Dr.

Kirvin

Knox, Associate Provost for Agriculture and Public Service and

Dean

of Agriculture,

Colorado State University, Fort Collins; (303) 491-6614

John McBride, Aspen Airport Business Center; (303) 925-2102

Robert

Sakata,

Sakata Fanns, Brighton; (303) 659-1559

Tim Sanford,

April

Corpomtion, Englewood; (303) 771-7400

Tim Schultz, President and Chairman of the Board, Colorado Open

Lands;

(303) 694-4994

John Stulp, wheat and cattle producer and Prowers County Commissioner, Lamar; (719) 336-9001

James Sullivan, Douglas County Commissioner, Castle Rock; (303) 660-7469

AGRICULTURAL LAND CONVERSION IN COLORADO

A Preliminary Report

March 1995

by the Colorado Department of Agriculture

and the Governor's. Task Force on Agricultural Lands

The conversion of Colorado's agricultural land to nonagricultural uses is a serious issue for all

citizens of the state. In addition to its direct impacts on fanners and ranchers, agricultural land

conversion affects the cost and quality of food, economic stability, wildlife habitat,

air

quality,

the cost of government, and Colorado's western heritage.

During 1995, a statewide task force, created by Executive Order and appointed by the Governor,

will examine the trends, causes, and consequences of agricultural land conversion and develop

recommendations for local, state, federal, and private sector action by December.

SpeCifically, the Governor's Task Force on Agricultural Lands is charged to report on:

•

incentives and other voluntary methods for maintaining land and water for

agricultural production, open space, and wildlife values;

•

methods to provide compensation for landowners who choose to continue farming

or ranching over converting their landholdings to development;

•

recommendations to enhance the continued vitality of agricultural activity, thereby

retaining land and water in agricultural use.

The goal is to

maintain an economically and environmentally sustainable agriculture in

Colorado. This means:

a system that can provide food and fiber at a profit to the producer

while protecting the environment for all citiuns now and for generations to come.

This preliminary report is intended to provide initial information on agricultural land conversion

trends, plus some preliminary ideas and options from the Task Force for review and discussion

across the state. A more complete report will be produced this fall.

Your comments and ideas

are welcomed. Please use the enclosed response fonn or otherwise communicate with us.

The Task Force was guided in developing these preliminary options by the following principles:

0

Profitable opportunities in agriculture are the basis for farmland protection.

0

Private property rights of landowners must be respected.

0

Solutions should be environmentally and economically sound, and implementable.

0

Solutions must respect the diversity of Colorado's landscape and viewpoints.

0

Family-based agriculture should be maintained and supported.

Since 1978, Colorado fannland has declined by 90,000 acres per year on average-equal to a

path one mile wide and 140 miles long (the distance from

Ft.

ColUns to Colorado Springs).

Summary of Agricultural Land Use Trends, 1959-92

Agricultural Land (34.0 million acres--51% of Colorado's land base of 66.3 million acres)

•

1992 total farmland acreage has declined by 4.8 million acres (12 percent) from the 1959

total of 38.8 million acres.

•

Between 1978 and 1992, total farmland acreage declined by I ,270,000 acres-an average

of more than 90,000 acres per year.

•

Front Range farmland totaled 6.0 million acres in 1992-a 24 percent decline of 1.9

million acres since 1959-nearly 60,000 acres/year on average.

•

Since I959, 18 of 63 counties have lost more than 100,000 acres of farmland; one county

gained more than 100,000 acres during that time.

Cropland (10.9 million acres--16% of Colorado's land base)

•

Since 1959, total cropland in Colorado has declined by only 100,000 acres-less than I

percent.

•

Front Range cropland totaled 2.0 million acres on 1992-a 16 percent decline of 370,000

acres since I959.

During this time, eastern Colorado gained 342,000 acres of

cropland-mostly by irrigating rangeland with finite supplies of groundwater.

•

Six of 63 counties lost more than 50,000 acres of cropland between I959 and 1992,

while six counties (all but one in eastern Colorado) gained more than 50,000 acres during

that time.

Irrigated Land (3.2 million acres--5% of Colorado's land base)

•

I992 irrigated acreage has increased by 485,000 acres, or 18 percent, from the 1959 total

of 2. 7 million irrigated acres. But 1992 irrigated acreage has declined by 261,000 acres,

or 8 percent, from the 1978

peak

of 3.4 million irrigated acres.

•

Front Range irrigated land totaled 617,000 acres in 1992-an 11 percent decline of

80,000 acres since 1959 and an 8 percent decline of 57,000 acres since 1978.

•

Irrigation from the Ogallala Aquifer, a fmite groundwater source in eastern Colorado,

has increased from 103,000 acres in 1959 to 635,000 acres in 1992, peaking in 1978 at

683,000 acres.

•

In contrast, statewide irrigation from non-Ogallala water sources has declined 2 percent

since I959 and by 8 percent (213,000 acres) since the

peak

irrigation year of 1978.

Sources: Federal Census of Agriculture reports for 1959, 1964, 1969, 1974, 1978, 1982, 1987, and 1992. Information includes land owned, rented, or leased, but excludes land used on a per-bead basis under a grazing permit.

In this report, the term "agricultural land" includes cropland plus rangeland; the terms "agricultural land" and "farmland" are synonymous. "Irrigated land" includes irrigated cropland and irrigated pastureland.

COLORADO AGRICULTURAL LAND TRENDS, 1959-92

195911964119691197411978# 11982# 11987# 11992#

CHANGE CHANGE 1959-92 1978-92 REGION ---000 ACRES--- OOOA

I

o/o OOOA

I

o/o EASTERN COLORADO 18949 18949 18484 18612 18542 17885 18351 18299 -650 -3% -243 -1 o/o FRONT RANGE 7861 7648 7496 7053 6516 6004 6063 6004 -1857 -24% -512 -8% SAN LUIS VALLEY 2133 1995 1814 1723 1686 1549 1509 1541 -592 -28% -145 -9% WESTERN SLOPE 9867 9630 8904 8513 8507 8096 8108 8151 -1716 -17% -356 -4%

I

sTATE TOTALS 138787 38259 36697 35902 35253 33538 34048 33983 l-4804 -12%1-1270

COLORADO CROPLAND ACREAGE TRENDS, 1959-92

195911964119691197411978# 11982# 11987# 11992#

CHANGE CHANGE 1959-92 1978-92 REGION ---000 ACRES--- OOOA

I

o/o OOOA

I

o/o EASTERN COLORADO 6666 6573 6618 6580 6642 6650 6972 7008 342 5% 366 6% FRONT RANGE 2397 2284 2287 2041 2072 2042 2105 2027 -370 -15% -45 -2% SAN LUIS VALLEY 526 486 473 483 530 552 562 584 58 11% 54 10% WESTERN SLOPE 1444 1395 1395 1407 1363 1308 1350 1314 -130 -9% -49 -4%

I

sTATE TOTALS l11o33 1o14o 1o113 10513 1o6o1 10552 10989 1o933

I

-1oo -1%1 326

COLORADO IRRIGATED ACREAGE TRENDS, 1959-92

195911964119691197411978# 11982# 11987# 11992#

CHANGE CHANGE 1959-92 1978-92 REGION ---000 ACRES--- OOOA

I

o/o OOOA

I

EASTERN COLORADO 103 187 334 517 683 640 568 635 532 517% -48

(Ogallala Region @)

EASTERN COLORADO 497 449 535 541 634 570 521 552 55 11 o/o -82 (Non-Ogallala Region)

FRONT RANGE 697 648 634 588 674 644 563 617 -80 -11% -57 SAN LUIS VALLEY 427 434 456 421 496 501 500 497 70 16% 1 WESTERN SLOPE 961 971 935 808 946 848 855 867 -94 -1 Oo/o -79

I

sTATE TOTALS 2685 2690 2895 2874 3431 3201 3014 3170

I

485 18%1 -261

#FOR SOME COUNTIES, NO DATA WAS REPORTED BECAUSE OF DISCLOSURE RESTRICTIONS. TOTALS USE INTERPOLATED VALUES. @THE PERCENT OF EACH COUNTY'S LAND AREA THAT OVERLIES THE OGALLALA AQUIFER IS ESTIMATED. THIS PERCENT IS THEN MULTIPLIED BY THE COUNTY'S TOTAL IRRIGATED ACREAGE. THESE COUNTY TOTALS ARE THEN ADDED TO YIELD THE RESULTS SHOWN. EVIDENCE INDICATES THAT AGRICULTURAL CENSUS DATA FOR 1982 MAY BE UNDERREPORTED. TOTALS OF REGIONAL VALUES MAY VARY FROM STATE TOTALS BECAUSE OF ROUNDING. SOURCE: CENSUS OF AGRICULTURE, U.S. DEPT OF COMMERCE, VARIOUS YEARS.

o/o -7% -13% -8% Oo/o -8%

COLORADO AGRICULTURAL PRODUCTION: 1993

($4.3 billion)

Fruits/Vegetables/Green Industry ($385) Corn ($309) Hay ($332) Wheat ($309) Other Crops ($179) Dairy Products ($189) Other Livestock ($186)

Cattle & Calves ($2,421)

Source: "Colorado Agricultural Statistics" (1994) Commodity values in millions of dollars

COLORADO FARMS AND RANCHES AT A GLANCE

• 25,500 farms and ranches

• Average size of farm and ranch: 1,286 acres

• Colorado ranks 17th nationally in cash receipts from agriculture (1992) • Total 1992 farm marketing receipts: $4.0 billion

• Total 1992 agricultural exports: $807 million (24% of Colorado's exports) • Farms by type: 83% individual, 11% partnership, 5% corporate

• Farms by tenure: 54% fuU owners, 31% part owners, 15% tenants • Farms by class: 59% livestock and poultry, 41% crops

• Totall992 farm real estate value: $11.3 billion

• Total 1992 of other farm assets (crops, livestock, etc.): $4.5 billion • Total 1992 farm debt: $2.8 billion

Sources: "Colorado Agricultural Statistics" (1994), and USDA and the Colorado Business/Economic Outlook Committee. Data are for 1993 unless otherwise noted.

Governor's Task Force on A&ricultural Lands

Mary Brown, Chairman of the Colorado Air Quality Control Commission, Steamboat Springs; Mark Burget, Executive Director, The Nature Conservancy, Boulder; Jay Fetcher, rancher, Clark; David Ford, Sunny Valley Farms, Center; Alan Foutz, wheat producer, Akron; Kirk Hanna, cattle producer, Pueblo; Cynthia Dickert, Washington County Commissioner, Akron; Eric Johnson, sculptor and Chairman of Club 20, Redstone; Dr. Kirvin Knox, Associate Provost for Agriculture and Public Service and Dean of Agriculture, Colorado State University, Fort Collins; John McBride, Aspen Airport Business Center; Robert Sakata, Sakata Farms, Brighton; Tim Sanford, April Corporation, Englewood; Tim Schultz, President and Chairman of the Board, Colorado Open Lands; John Stolp, wheat and cattle producer and Prowers County Commissioner, l.a.mar; James Sullivan, Douglas County Commissioner, Castle Rock; Harry Talbott, Talbott Farms, Inc., Palisade.

AGRICULTURAL LAND CONVERSION IN COLORADO

READER SURVEY SHEET

The Colorado Task Force on Agricultural Lands seeks your comments on the preliminary ideas in

this report and other suggestions you may have for

maintaining productive agricultural lands and a

healthy agricultural economy in Colorado. Please return your comments and suggestions as soon

as possible but no later than August 15th. Use additional sheets

if

necessary. Thank you!

I am D an agricultural producer; D in agribusiness; D a government official (D staff);

D an environmental organization member; D in education; D a resident of _ _ _ _ _ _ _ County

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On the left, circle your

ratin~

of the importance of each idea below.

1. EFFECTIVE COM'MUNICATION about agriculture's indispensable

contributions to Colorado's economy, environment, and way of life.

2.

Increase TECHNICAL ASSISTANCE to counties to promote desirable growth

and protect agricultural lands.

3.

Increase county SUBDIVISION PROCESS FLEXIBIUTY to help maintain

productive agricultural lands.

4.

Establish TECHNICAL ADVISORY TEAMS to assist owners of agricultural

lands under development pressure to examine their options from resource use

and economic perspectives.

5.

Direct growth and INFRASTRUCTURE DEVELOPMENT to protect

productive agricultural lands.

6.

Clarify the AGRICULTURAL LAND PROPERTY TAX CLASSIFICATION

for property

tax

purposes.

7. Establish DEVELOPMENT RIGHTS PROGRAMS to compensate farmers and

ranchers who keep lands under growth pressure in agriculture.

8.

Establish voluntary AGRICULTURAL ENTERPRISE DISTRICTS that

provide incentives to maintain commercial agricultural activity.

9.

Increase federal

tax

incentives to use CONSERVATION EASEMENTS as a

tool to protect agricultural lands.

10. Reduce INHERITANCE TAXES on agricultural and small business enterprises

to ease the transfer of farm enterprises across generations and protect ag lands.

11. PROMOTE the sale and consumption of Colorado agricultural products in

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On the left, circle your ratin& of the importance of eaeb idea below.

12. Expand in-state VALUE-ADDED PROCESSING and food and fiber manufacturing opportunities.

13.

Review and modify REGULATIONS affecting agriculture and related businesses to be more practical and flexible.

14.

Strengthen Colorado's RIGHT-TO-FARM LAWS and educate people moving

in next

to

ranches and farms about agricultural practices.

15. Expand assistance to BEGINNING FARMERS AND RANCHERS.

16. Improve the BUSINESS CLilMATE, economic opportunities, AND essential public services in RURAL COMMUNITIES.

17. Seek greater COMPATIBll.ITY OF FEDERAL AND STATE POUCIES and programs with local and state policies and programs that promote agriculture. 18. Increase support and INCENTIVES TO EXPAND PROTECTION of soil,

water, vegetation, wildlife,

and

other natural resources on agricultural lands.

19.

Protect strategic WATER SUPPLIES for highly productive lands.

20.

Provide relevant INFORMATION

AND

RESEARCH on agricultural lands, natural resources, and economic viability for sound public policy and private decision-making.

Use the space below for: (a) your comments on the above ideas; (b) additional ideas to consider; (c) requests for additional information. Be as specific as you can. Use additional sheets if necessary.

Nmneaodaddr~~ptioBd)---Please mail or fax this sheet as soon as possible but no later than August 15th to:

20 IDEAS TO MAINTAIN COLORADO AG LAND AND PRODUCTIVITY

1.

Effective Communication

Increase understanding and support of agriculture's contribution to Colorado's economy, environment, and way of life.

Agriculture generates more than $11 billion per year and 80,000 jobs in Colorado's economy. More than half of the state's land is owned or managed by 25,500 farm units-land that provides valuable open space and wildlife habitat as well as high-quality food and fiber. Raising crops and livestock near urban and recreation areas adds diversity to the landscape and connects people with Colorado's western heritage and their food supply. • Establish a statewide task force of general farm organizations and commodity groups to develop and implement cooperative activities, in partnership with the Colorado Department of Agriculture and CSU.

· With less than 2% of Colorado's population, farmers and ranchers must also seek opportunities for two-way com-munication, such as the Colorado Resource Roundtable. Started by the Colorado Sierra Club and the Colorado Cattlemen's Association in 1991, it provides a forum for ranchers and environmentalists to find common ground.

0 Use the Reader Survey to share your ideas and other examples of effective communication.

LOCAL AND STATE POLICIES

2.

Technical Assistance

Increase technical assistance to counties to promote desirable growth and protect agricultural lands.

The major responsibility for determining how growth impacts agricultural land rests with local government. Currently, 49 of Colorado's 63 counties have adopted a comprehensive plan; only 18 have explicit policies to retain agricultural land or water. The Colorado Division of Local Government offers staff and funding assistance to help with local planning needs.

Identifying prime, unique, and important agricultural lands is an essential step. The Natural Resources Conservation Service-USDA has mapped such lands based upon soils information. Local, state, and federal agencies can use computerized geographic information systems to combine soils, land use, and growth

information to display key agricultural lands in the path of development.

• Trends in agricultural land (and water) conversion, soil erosion, and growth trends should be monitored and consolidated information disseminated regularly. Assistance does not have to be through public agencies. Colorado Counties Inc. facilitates exchange of land use information and ideas through its workshops and reports.

0 Use the Reader Survey to request injonnation on county comprehensive plans and policies on agriculture.

3.

Subdivision Process Flexibility

Increase the flexibility of county subdivision review processes to maintain productive agricultural lands.

Under Senate Bill35 (§30-28-101 et seq., C.R.S.), land may be subdivided in parcels of 35 acres or more with-out county review; otherwise, review is required. Many farmers and ranchers selling or developing their land find it faster, simpler, and more certain to subdivide the land into 35-acre "ranchettes" and have roads cut for access. Often, the land can no longer be used for agriculture, and wildlife and scenic values are affected. New approaches encourage clustering of buildings to retain as much agricultural and open space value of the original site as possible. Some counties such as Routt are developing faster, simpler review processes to encourage clustering. A Routt County task force of ranchers and other citizens are exploring ways to allow some increased density as an incentive if additional amenities are provided. Also, State Senator Don Ament has drafted a bill that addresses clustering.

• To be widely used, clustering options should result in economic returns to the landowner at least comparable to the "ranchette" approach.

• Incentives for clustering should promote permanent conservation easements on the balance of the land and placement of homesites on marginal agricultural land.

• Lot sizes within a cluster should be determined so that health and environmental concerns are met.

• Give a farmer or rancher who establishes an agricul-tural easement on 80% or more of the farm or ranch a

permanent vested right to put x housing units on the remaining 20%, with no time limit on further develop-ment. Keep property taxes on the remaining 20% at an agricultural value until development occurs.

4.

Technical Advisory Teams

Establish technical advisory teams to assist owners of agricultural lands under development pressure to examine their resource use and economic options.

The Routt County task force mentioned above recommends that such teams be available to owners of agricultural lands early in the development process. The 30 land trusts in Colorado can be useful sources of information, assistance, and contacts.

• A revolving fund could be established, replenished by landowners using the service.

D Use the Reader Survey to order a list of land trusts.

5.

Infrastructure Development

Direct growth and infrastructure development to protect productive agricultural lands.

Growth generally follows the location of water and sewer systems, roads, and other public infrastructure. Much of this development is federally-funded.

The federal Farmland Protection Policy Act requires federal agencies to minimize the taking of agricultural land for highway construction and other federal projects.

If federal funds are involved in a project, agricultural lands designated prime or unique by USDA's Natural Resources Conservation Service are to be protected from conversion, or mitigation of the loss is required.

• The corresponding State Environmental Review (7-P) process should be equally protective of productive agricultural lands when state funds are involved.

6.

Ag Land Property Tax Classification

Clarify the agricultural land classification for property tax purposes.

Agricultural land is taxed in Colorado at a lower rate than other lands because of its use to produce food and fiber. (Several studies have shown that the net cost to local government to provide services to agricultural land is lower than for other types of land use.) This basic

principle has steadily eroded over time. For example, a 35-acre "ranchette" seldom supports a working farm or ranch, yet often enjoy lower property taxes.

Two related bills in the legislature are: (a) House Bill 95-1268, which would classify land formerly agricultural but now subject to a perpetual conservation easement as agricultural land for property tax purposes; and (b)

House Bill 95-1203, which would classify any land with four beehives as agricultural land for property tax purposes. Each bill stretches the original intent of the definition of agricultural land for property tax purposes. • Creating a separate property tax classification for such uses of land would tighten the agricultural land classification, benefitting true agricultural producers.

D

Use the Reader Survey to request copies of bills.

AG LAND PROTECTION TOOLS

7.

Development

Rights

Programs

Establish purchase and/or transfer of development rights programs to compensate farmers and ranchers who keep lands under growth pressure in agriculture.

Purchase of development rights (PDR) programs compensate agricultural producers by paying them for the right to build on or develop their land. For several years, the city of Boulder has bought development rights of farms and purchased open space with funds from a citywide sales tax, which currently generates $13 million per year; Boulder County ($6 million) and Jefferson County ($20 million) have similar programs. Develop-ment impact fees are another potential source of funds. (Such fees are not subject to the Amendment 1 cap.) The Great Outdoors Colorado Trust Fund (GOCO) is a growing source of PDR funds. Beginning in 1999, GOCO will distribute more than $40 million per year for open space, wildlife, parks, and outdoor recreation; agricultural land protection can be compatible with each of these categories. Eight states have adopted PDR programs, including Pennsylvania, which passed a $100 million bond issue in 1988 to fund its program. USDA's Farms for the Future program is a potential source of funds to help states with PDR programs. PDR programs rely on public funds, and can protect only a small fraction of agricultural lands under development pressure. Hence, some counties are study-ing transfer of development rights (IDR) programs.

, Here, agricultural producers are compensated for their development rights by willing buyers. In a nutshell, future growth pays for the development rights owned by the landowner. Local governments must develop com-prehensive plans that designate areas of agricultural use and areas of urban or industrial development. In March

1995, Boulder County adopted a TDR program.

0 Use the Reader Survey to request more information.

8.

Agricultural Enterprise Districts

Establish voluntary agricultural enterprise districts that provide incentives to maintain commercial agricultural activity.

Agricultural districts are voluntary groupings of farmers and ranchers who wish to focus on producing food and fiber-not development. A district is formed when a group of agricultural producers petition county govern-ment to create the district. Members of agricultural districts must agree not to develop their land for a certain period of years.

If a district is approved, members are eligible for benefits such as: (a) protection against ordinances that interfere with agricultural activities; (b) eminent domain restrictions; (c) protection against special district taxation; and (d) discouragement of public investment in sewer and water lines and other infrastructure.

• Other possible incentives include: (e) a state income

tax credit of 2% for investment; and (f) preferential consideration for state PDR funds.

Benefits to county residents include: maintaining agri-culture and related employment, preserving open space, and lower taxpayer costs to provide public services. Since 1971, New York's agricultural districts program has protected 8.5 million acres on 22,000 farms. A number of other states have adopted such programs.

0 Use the Reader Survey to suggest other incentives that could be offered to producers in an ag district.

9.

Conservation Easements

Increase federal tax incentives to use conservation easements as a tool to protect agricultural lands.

A conservation easement on farm or ranchland is a tool to protect such land from further development. Where

programs exist, conservation easements may be sold or donated. Easements are held by land trusts or government agencies. When donated, a conservation easement may provide income and estate tax benefits. The incentive value of a conservation easement could be raised by increasing the income tax deductibility for donating an easement. Federal (and state) income tax rules allow an income tax deduction for a donated conservation easement of up to 30 percent of adjusted gross income over a period of at most six years.

For example, a landowner with adjusted gross income of $100,000 may deduct a maximum of $30,000 a year over six years, or $180,000 total. However, if the landowner's conservation easement is worth $1,000,000 (for example, $1,000 an acre on a 1,000 acre ranch), the landowner could then deduct a total of only 18 percent of the value of the easement over the six-year period. • Tax code changes to consider: (a) increase the maximum yearly deductible of 30 percent of adjusted gross income to 50 percent or more; (b) increase the number of years the deduction can be taken from 6 years to 10 years or more; (c) change the income tax

deduction for a donated conservation easement to a tax

credit; and (d) allow tax deductions (or credits) for donated conservation easements to be sold to other tax payers at full (or discounted) value.

VIABILITY OF AGRICULTURE AND

RURAL COMMUNITIES

10.

Inheritance Taxes

Reduce inheritance taxes on agricultural and small business enterprises to ease the transfer of farm enterprises across generations.

If the landowner in the example above dies, the land's value for inheritance purposes at its developable potential of say, $2,000 an acre, or $2 million total. Taking the allowable $600,000 exemption, heirs must pay taxes of 55% on the remaining $1.4 million, or $770,000 within nine months. To pay such a sum, heirs often must sell this land to a developer; the agricultural integrity of the parcel is often lost or severely compromised.

Raising the inheritance tax exemption above the current threshold of $600,000 would certainly help ease the transfer of farms from one generation to the next. Congress is considering legislation to increase the inheritance tax exemption.

• Raise the inheritance tax exemption for agricultural and small business enterprises to $1.5 million.

• If not all of the value of a donated conservation easement can be deducted from income taxes, allow the landowner's heirs to deduct it from any inheritance tax.

11.

Marketing and Promotion

Promote the sale and consumption of Colorado agricultural products in domestic and export markets.

Colorado's unique climatic, water, and soil conditions produce high-quality crops and livestock, giving our state an edge in domestic and export markets. Despite current problems with the Mexican peso, NAFTA and

GATT provide significant long-term opportunities for Colorado agriculture to expand exports.

The Markets Division of the Colorado Department of Agriculture, in cooperation with commodity groups and grower organizations, provides marketing assistance to producers, suppliers, and processors of agricultural products. CSU offers assistance in using the futures market and related tools to market agricultural products. Always Buy Colorado (ABC) is a private association that also promotes Colorado agricultural products.

D

Use the Reader Survey to share other marketing and promotion ideas and ways to improve current programs.

12.

Value-Added Processing

Expand in-state food and fiber manufacturing and by-product processing opportunities.

Colorado produces exceptionally high-quality crops and livestock used for direct consumption or as initial products for further processing. Valued-added process-ing. of agricultural commodities in the state is minimal, except for a few industries such as brewing and meat packing. Expanding food manufacturing and by-product processing supports rural communities, creates jobs, and stimulates the development of support industries. Complementing private industry activities, the Markets Division of the Colorado Department of Agriculture (CDA) conducts food processing workshops, and CSU provides technical assistance through its Food Science Department. CDA also has an annual feasibility study grants program funded by the Economic Development Commission; grants help companies investigating

possible food and fiber products.

The federally-funded Alternative Agricultural Research and Commercialization (AARC) Center expedites the development and market penetration of food, non-feed products from agricultural and forestry materials. D Use the Reader Survey to add other ideas for expanding value-added processing.

13.

Regulatory Reform

Review and modify regulations affecting agriculture and related businesses to be practical and flexible.

Regulations applied without understanding and considera-tion of site-specific condiconsidera-tions are often inappropriate and do not always correct the condition in question. Mutual problem-solving and less litigation would gener-ate effective solutions more quickly and less expensively. • New and existing regulations should be examined for impact, cost-benefit, and practicality of implementation. • Commodity groups should participate in analyzing and developing rules and regulations. Regulatory agencies should actively seek such input.

• At the same time, agricultural producers-and other owners of agricultural land-who willfully abuse the environment and fail to take reasonable precautions to protect and conserve soil, water, wildlife, and other natural resources should be disciplined.

• Commodity groups and general farm organizations could establish a cooperative system for monitoring proposed regulations affecting agriculture. Such an effort could also explore alternatives beyond fines and litigation to deal with those who harm the environment. D Use the Reader Survey to describe regulations affecting agriculture and related business activities which are inappropriate, ineffective, or have low benefits to costs. Be as specific as you can.

14.

Right-To-Farm Legislation

Strengthen Colorado's right-to-farm laws and educate people moving in next to ranches and farms about agricultural practices.

As population growth continues to expand into agricultural· areas, farming and ranching operations are

,

increasingly likely to be subjected to nuisance suits. Complaints over noise, odors, spraying, and slow-moving farm machinery intensify conflicts between residential and agricultural use of the land.

A state statute on the

Nuisance Liability of Agricultural

Operations

(§35-3.5-101

et seq.,

C.R.S.) was created in 1981 to protect and encourage the use of agricultural land. The statute defines conditions under which agri-culture is not a nuisance, thereby reducing the threat of frivolous .lawsuits from people moving in next to estab-lished agricultural operations. County ordinances could further protect farmers and ranchers from frivolous suits. • Extending· this law to agricultural processing activities should be studied.

• Mediation should be required before going to court. • Agricultural operators should be allowed to recover legal fees when nuisance suits are settled in their favor. • Work with realtors and developers to inform buyers of homes near farms and ranches about the importance of agriculture in the county and the nature of agricultural activities to reduce. misunderstanding.

0 Use the Reader Survey to share examples of

right-to-farm issues

and

how to address them.

15.

Beginning Farmers and Ranchers

Expand assistance to beginning farmers and ranchers. The

Colorado Agricultural Development Authority

(GADA) is an independent public body, established by state statute in 1981. CADA encourages the investment · of private capital in agriculture and reduces interest rates for beginning farmers. For land and new equipment, up to $250,000 can be borrowed. To date, 80 beginning farmers in Colorado have been helped. Under federal regulations, the CADA program cannot be used if the farm property from a parent or grandparent.

• Federal regulations should be changed to allow a begiruiing farmer to use the CADA program to acquire a farm or ranch from a parent or grandparent.

The Consolidated Farm Service Agency-USDA also has beginning farmer programs-one for land loans and one for operating loans. Since 1992, these two popular programs have helped 29 beginning farmers in Colorado,

but federal funding is insufficient to meet the demand.

0

Use the Reader Survey to request information and to

share other ways to assist beginning farmers.

16.

Business Climate and Rural

Communities

Improve the business climate, economic opportunities, and essential public services in rural communities. Agriculture can flourish only if rural communities and related agribusinesses are healthy. A favorable financial and tax climate is essential for agriculture, processors and value-added industries, and small businesses. Quality education, health care, and utilities are also indispensable. Well-maintained highways and roads are needed to transport farmgate products. Access to state-of-the-art telecommunications is also essential: telephones, computers, fax machines, and the internet. Several organizations and groups are working on these issues, including: Colorado Counties, Inc., the Colorado Municipal League, Club 20, the Colorado Rural Development Council, the Colorado Rural Health Association, and local and regional economic development committees.

Most rural communities rely on rural electric cooperatives for affordable power and communications services to attract existing businesses and industries. Congress is considering restricting access by coopera-tives to low-interest loans. This will result in higher utility costs to rural communities, farmers, and ranchers.

0 Use the Reader Survey to suggest sped.fic ways to

support rural communities, businesses and infrastruCture.

AGRICULTURE AND ENVIRONMENT

17.

Federal and State Compatibility

Seek greater compatibility of federal and state policies and programs with local policies and programs that promote agriculture.

If Colorado develops grassroots and regional strategies for meshing growth with viable agriculture, this can foster increased interaction with federal and state agencies, such as the Bureau of Land Management, the U.S. Forest Service, and the State Land Board. Greater

cooperation would minimize conflicts that occur because of multiple agency policies and regulations.

The Yampa River Basin Partnership, a newly-formed partnership that includes landowners and local, state, and federal officials, currently is piloting that concept. Managing the Yampa Valley ecosystem to respect the needs of all stakeholders is the basis of that partnership.

D

Use the Reader Survey to share examples-and opportunities-for federal/state/local cooperation.

18.

Resource Protection Incentives

Increase support and incentives to expand protection of soil, water, vegetation, and wildlife on agricultural lands.

Colorado's farmers and ranchers use and manage most of the state's land and water resources, and so are key stewards for Colorado's natural resources. They already do a great deal voluntarily, without fanfare or public compensation, to protect these resources. The economic uncertainties of agricultural production and price often are limiting factors.

Some effective, incentive-based programs include: (a) the USDA-funded Conservation Reserve Program, which has protected 1.9 million acres of erodible land in Colorado; (b) the Habitat Partnership Program, developed by the Colorado Division of Wildlife; and (c) the federal Wetlands Reserve Program, which buys easements from willing landowners. The fate of incentive-based programs to help farmers protect wetlands, wildlife habitat, and other natural resources will be largely determined by the 1995 Farm Bill. • Other ideas: (a) incentives for results-oriented activities to stabilize or improve natural resources; (b)

offset federal grazing fees for ranchers who spend money on rangeland improvements, provide winter range habitat for wildlife, or otherwise preserve open space; (c) create a national council on agricultural lands and open space to advise USDA and the Interior Department. D Use the Reader Survey to add your ideas to protect natural resources on agricultural lands.

19.

Water for Agriculture

Protect water supplies for highly productive lands.

Agricultural land requires water to be productive. Con-version pressure on agricultural lands from continued growth applies to agricultural water as well. Several methods to maintain agricultural lands discussed in this report could be applied to retain water for agricultural use. To retain both water and land in agriculture, development rights to both must be acquired.

• Conduct a separate study of such options.

• Other ideas to consider: (a) address statewide water policy; (b) more water storage projects; (c) lease cultural water to cities during dry years but retain agri-cultural control; and (d) increased research and tech-nical assistance on water-efficient irrigation and crops. D Use the Reader Survey to add your ideas on retaining agricultural water. ·

20.

Information and Research

Provide relevant information and research on agricul-tural lands, naagricul-tural resources, and economic viability for sound public policy and private decision-making.

Identifying prime and important agricultural lands and monitoring growth pressures on such lands is fundamental. CSU and USDA specialists are developing alternate cropping patterns with eastern Colorado farmers, which use fewer inputs but increase net income. CSU and CU faculty are analyzing the importance of mountain ranches-and the destructive impacts of rural sprawl-for wildlife habitat and open space.

• Other important areas: (a) quantifying the fiscal impact of sprawl to local taxpayers; and (b) developing cost-effective opportunities for reducing pollution caused by farms and ranches.

Research and technology transfer are basic to agricul-tural profitability. Funding for agriculagricul-tural programs at CSU has not kept pace with increased costs and demands for services. According to annual surveys of states similar to Colorado in size of agricultural production, CSU receives only 59% of the average peer state fund-ing for extension services and only 51 % for research on issues significant to Colorado's agricultural conditions.

D Use the Reader Survey to add other kinds of needed information and analysis to maintain agricultural lands and production.

3/17195

"

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...

~.~~a•CZ~~~~~·~---American Farmland Trust

ARE YOUR ELECTED LEADERS FIGHTING SPRAWL?

The Trend: In last November's elections 72 percent of 240 initiatives to protect farmland,

ranchland and open space were approved by voters across the nation. Why? It simply makes sense for America to protect the land that provides the nation's food and fiber, offers scenic open space, provides wildlife habitat, and reflects America's farming heritage.

The Problem: Urban sprawl is wastefully consuming our best farm and ranch land. Every minute of every day, 2 acres of farmland - one million acres per year - is converted to strip malls, parking lots, and sprawling residential development. Three-quarters of our fruits and vegetables and more than half of our dairy goods come from high quality land threatened by sprawl.

Do Your Elected Leaders Have Answers to These Questions?

Why are my local taxes being raised? Residential demand for services always exceed the tax revenue new housing generates.

Why is traffic so congested, and why is the air so polluted? When farmland is converted we lose open space, fresh air, wildlife habitat and watershed health.

What happened to all of the family farms? Urban pressure raises the value of remaining farms above their agricultural value, creating enormous estate tax and property tax burdens that make remaining in farming prohibitively costly.

Do we have to accept foreign food safety standards? As farmland is developed, fresh local produce is often replaced with that of foreign countries.

Why am I paying more for food? When prime farmland is developed agriculture is forced onto marginal land that requires more costly inputs and is farther from consumer markets.

Ask Your Elected Leaders To:

Give farmers and ranchers alternatives to selling their landfor development. Communities across America have saved nearly one million acres of farmland from the bulldozer through voluntary purchase of development rights programs that protect both property rights and natural resources. Stop subsidizing sprawl. Fiscal studies show that owners of farmland pay more in local tax revenues than it costs local government to provide services to their properties. Residential land uses, in contrast, are a net drain on municipal coffers.

Build partnerships. The federal government needs to become a better partner in state and local efforts to protect prime farmland. The federal Farmland Protection Program should be reauthorized and funded at an annual level of $100 million.

Support right-tojarm laws. State right-to-farm laws support the economic viability of farming by discouraging neighbors from filing nuisance lawsuits against agricultural operations.

To learn more about how to save the land that feeds America, please call

Anna Barrios at 202-331-7300 or e-mail abarrios@farmland.org for a free grassroots action kit.

NATIONAL OFFICE

1200 18th Street, NW Suite 800 Washington, D.C. 20036 Tel: (202) 331-7300 Fax: (202) 659-8339

http://www. farmland.org ~recycled

S I 1 ·t 1 l t I I Mr. Brian Werner P.O. Box474 Fort Collins, CO 80522 I I I 1 l I

I

I I