The Impact of Vermont's Farmland Conservation Program on Program Participants

Executive Summary

Prepared for:
American Farmland Trust, Saratoga Springs, New York

Prepared By:
Market Street Research, Inc., Northampton, Massachusetts

 Release Date: November, 1999

The Northeast Field Office of American Farmland Trust is working with the Vermont Land Trust, the Vermont Housing and Conservation Board, and the Vermont Department of Agriculture to study the Vermont farmland conservation program, whereby participating farmers sell their land development rights to a government body. The farmers are still able to use or sell the land for agricultural purposes, but the land can never be developed for housing or other non-agricultural uses.  The program has been successful in attracting applications for participation, and the American Farmland Trust and its Vermont partners would like to assess the effectiveness of the program.

For this study, Market Street Research, Inc. conducted two phases of research. The first phase consisted of in-depth interviews with ten agricultural service providers, such as bank officers and equipment and seed dealers, during March of 1999. For the second phase, Market Street Research conducted telephone interviews with 130 program participants, including 109 who sold their development rights, 17 who bought protected land, and 5 who bought the land when the development rights were sold. These interviews took place in April of 1999.

About one-half of the farms are located in the Champlain Valley and the rest are mostly in the counties of Orleans, Caledonia, Orange, and Bennington. The sample included a mix of larger and smaller farms, with an average of 430 acres, and about one-half having between 250 and 500 acres. About three-fourths of the sample consisted of dairy farms. The majority of the program participants work only on the farm; almost all employ household members, and more than one-half employ non-household members.

FIGURE A
SUMMARY OF FARM CHARACTERISTICS

* Average Total Farm Acreage430 acres
* Median Gross Annual Income from Farming$203,00
* Average # Household Members Employed on Farm3 people
* Percent of Farms Employing Non-Household Members55.3%
* Average # Non-Household Members Employed by Farm2 people


Summary of Findings

Overall, the results of this study indicate that most farmers are satisfied with the farmland conservation program (98% very or somewhat satisfied), and that most agricultural service providers think the program has a positive image. The program appears to be meeting its goal of conserving farmland for agricultural uses, both by making it easier for farmers to stay in business and by reducing the costs of entry for new farmers. Most of the program participants are using their protected land for dairy farming, although some use it for vegetable production, hay, maple syrup production, forest products, and beef. The majority of participants are using the funds from the sale of development rights to make capital improvements and improve the cash flow of their farming operations. In general, program participants are using the income from the sale of their development rights to pay debts, or to reinvest in their farms by buying more land or improving buildings. To a lesser extent, participants are creating savings and retirement funds, buying new equipment, supplies, and livestock, or expanding in other ways, such as hiring more employees.

(Please see Figure B below)

FIGURE B
PRIMARY USE OF FUNDS*

* Proportion of participants who sold development rights (N=109).  Top three uses of funds combined.

The desire to conserve farmland for agricultural purposes is a key reason for participating in the conservation program. Many participants and agricultural service providers mentioned the philosophy of the conservation program and the desire to protect the land from development as a major reason for participation. Other notable reasons for participating include the ability to reduce debt or purchase land inexpensively, the ability to expand farming operations, and the ability to preserve land for future family generations. Most participants are satisfied with the program, and do not regret their decision to join.

FIGURE C
REASONS FOR PARTICIPATION

Almost three-fourths of participants used the proceeds to improve or expand their farms.  In addition to reducing debt and making capital improvements, about one-fourth made specific operational changes. These changes included establishing new conservation practices and new farm management practices as well as branching out into new agricultural enterprises

FIGURE D
CHANGES IN FARM OPERATIONS SINCE
SELLING OR PURCHASING*

* Proportion of participants who indicated they have changed farm practices in specific ways

Participants who had purchased a conserved farm were asked about the impact of the program on their ability to purchase the conserved farm. Echoing the thoughts of the agricultural service providers, the greatest impact appears to be on the financial aspects of the real estate deal; in other words, on the affordability of the farm. Participants said the inclusion of the farm had a very positive impact on their overall financial ability to purchase the farm, the purchase price, and their ability to obtain financing for the purchase.

FIGURE E
IMPACT OF PROTECTED STATUS ON PURCHASE OF FARMS*

*  Proportion of participants who have bought protected farms (N=21) who indicate protected status had a “very positive impact” on specified

The effectiveness of the farmland conservation program will be best measured over the long term. That is, will the program conserve farmland and help strengthen agriculture in Vermont?  The survey results showed that over 20% of the land would have been sold for some kind of non-farm development if the program did not exist.  Further, the program has had a very positive impact on participants’ attitudes toward farming and conservation. And finally, and perhaps most importantly, the survey results revealed that almost three-fourths of the participants report that the program has had a very positive (39.2%) or somewhat positive (34.2%) impact on their families’ ability to stay in farming. Similarly, about two-thirds think that participating in the program has made it more likely they will pass the farm on to children or family members (42.4% very positive impact and 25.4% somewhat positive impact).
 
Although the findings from the interviews with program participants and agricultural service providers reveal that the program is successful, the results also indicate that some question the long-term effectiveness of the program. Some of those interviewed felt the impact on farmers and local communities is relatively short-term. Many participants reduce debt and make payments on loans to banks and seed, feed, and equipment dealers, while others do construction, which impacts the local building trade. Some argue that these are one-time economic boosts that will not sustain agriculture and community commerce in the long-term unless other on-going efforts are made as well.

Recommendations

Farmland conservation program participants are very satisfied with the program overall, and the program has a generally positive image among agricultural service providers. The increased number of applications to the program is also a sign that the program is meeting the needs of farmers and that it has a positive reputation overall.  In order to remain a successful program in the short- and long-term future, there are some areas of improvement that were revealed in this study that the program could address.
 
One of the concerns mentioned by both program participants and agricultural service providers is the prolonged length of time it takes to process applications to the program. Although some expressed the sentiment that it is a government program and the wait is expected, many felt that once a farmer has made the decision to apply, the process should go more quickly. The program should look at ways to streamline the application and approval process.
 
It would also be beneficial for the program to track the long-term effects of selling development rights, especially with regard to which types of farmers are buying more land and/or retiring debt. Although only a small proportion of participants said they plan to sell the farm in the next decade, there is a perception among some participants and agricultural service providers that some participants “take the money and run,” by selling the farm and retiring. By tracking who is buying more land and who is retiring debt, the program can investigate the effects of these uses of the sale proceeds and address any programmatic or negative image issues.
 
Another consideration of the program should be the development of technical assistance to improve farmers’ competitiveness in the agricultural market. The results indicate that many farmers use proceeds to retire debt, and the addition of a technical assistance component could help farmers stay financially viable after debts are paid.  Technical assistance such as business development assistance, diversification of products, marketing, and conventions or workshops to share agricultural improvements would increase the business skills and knowledge base of farmers, and enhance the long-term viability of farms. This addition to the farmland conservation program would complement existing efforts and enhance its image as a program that addresses both the needs of farms and the needs of farmers. 
 
The farmland conservation program is successful, and it should continue to promote its image by advertising “success stories.” Different perspectives of the program and its impact would enhance its image, dispel myths, and provide information about the usefulness of the program to various constituencies. Stories of successful farming families, farms, towns, and businesses could be published in local newspapers, agricultural technology magazines, seed and equipment magazines, and advertisements in professional farming association publications. 
 
While the results of this study show some economic impact of the program on the local community, the American Farmland Trust should continue its efforts to examine this issue.  As American Farmland Trust conducts more in-depth interviews with program participants, it should consider partnering with an agricultural economist to explore more fully the economic impact on farm businesses and economic multiplier effects of the conservation program on local communities. 

For more information about the American Farmland Trust, please visit their web site at http://www.farmland.org/northeast/index.htm


These links provide other information about VLT's farmland conservation program:

 

The following links provide information for you, if you are interested in conserving land that is not a working farm:

 

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