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Easement could hurt farmer’s ability to borrow

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PHOTO/JENNIFER MARANGOS/
About 100 people from business, government and the community attended the Save It Or Pave It event
program recently at Northampton Community College’s Fowler Center in Bethlehem.
PHOTO/JENNIFER MARANGOS/ About 100 people from business, government and the community attended the Save It Or Pave It event program recently at Northampton Community College’s Fowler Center in Bethlehem.

When talking about preserving farmland, it’s also critical to think about preserving farms.

That’s the message that Gary Smith, president and CEO of the Chester County Economic Development Council, recently delivered to 100 people representing businesses, governments and communities in Lehigh and Northampton counties at a panel discussion at Northampton Community College’s Fowler Center in Bethlehem and hosted by Renew Lehigh Valley. RenewLV is an advocacy organization dedicated to farmland preservation, food sustainability and smart transportation.

“Farmers are running businesses,” said Smith, who runs his family’s dairy farm in addition to helming the development council. “At the end of the day, we have bills to pay and when expenses exceed income, we go out of business.”

Titled “Save It Or Pave It,” the program was one in a series of public engagement events that RenewLV has been hosting to get community members thinking about and talking about farmland preservation and smart growth, according to Joyce Marin, its executive director.

“We are commodity producers, and we have no idea what value will be,” Smith said. “Who can live on a 30 percent pay cut? Taxes go up. Other input costs go up. All these ingredients are a burden to those farmers.

“Once you put your farm into agricultural easement, the value goes down. You can no longer get fair market value [for the land].”

Most Pennsylvania counties, including Lehigh and Northampton, participate in the agricultural conservation easement program. Essentially, the county buys the development rights to the land, giving the farmer money in return for placing a deed restriction on the property so that it is never developed.

Smith described the fictional scenario where a farmer’s son or daughter goes off to college and returns home with great ideas about growing the family business.

The family goes to the bank to get a loan to help fund the expansion – whether it be to buy more land, cows or equipment. But since there is a farmland preservation easement on the property, it can’t get the needed funds.

“The problem we have is the banker looks at it as a special-use property and thinks, if I need to foreclose, it can’t be modified for a use other than it is,” Smith said.

During the event, RenewLV released new data regarding confirming that development in the Lehigh Valley is outpacing the rate of farmland preservation, and questioning if regional farmland preservation goals can feasibly be reached.

According to Northampton County’s preservation office, an estimated 1,500 acres a year are being developed, compared to 800 acres being preserved.

The disparity is larger in Lehigh County, according to its preservation office, as annually an estimated 1,500 acres are being developed and 375 acres are being preserved.

In Northampton County, about 5 percent of farmland is preserved; in Lehigh, it’s about 10 percent. Neither county is close to the 25-percent goal.

Smith was one of five presenters. The others were Maria Bentzoni, director of the Northampton County Farmland Preservation Program; Percy Dougherty, Lehigh County Commissioner; Ron Beitler, Lower Macungie Township Commissioner; and Douglas Wolfgang, director of the state Department of Agriculture Bureau of Farmland Preservation.

The presenters covered a singular theme from different angles – the tools available to support farmland preservation at the municipal, county and state level. One tool they discussed and use is the agricultural easement – something that RenewLV has advocated.

Smith, the final speaker, took a slightly different tack, explaining that the farmland preservation toolbox he uses in his region, while wearing his economic development hat, is driven by the essential understanding that farms are businesses.

As such, he said, his approach to farmland preservation, which has been quite successful, focuses on providing farmers with many of the same tools that he provides to other businesses.

For example, Smith described an online resource called AgConnect, which he described as “a vibrant network of farmers, business owners and service providers connecting farmers to the business resources, training and financing to grow business and promote smart agricultural economic development.”

Farmers in his region have access to six different low-interest loan programs, he said.

“We want to bring these programs into the Lehigh Valley,” he said.

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