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Preservation of Farmland and Forestlands 2004 Virginia Agriculture Summit Richard Harlow, Michigan Department of Agricu

Preservation of Farmland and Forestlands 2004 Virginia Agriculture Summit Richard Harlow, Michigan Department of Agriculture. February 24, 2004. Virginia 2002 Farms 47,615 Acres 8,666,557 Average Farm 182 Average Age 56.7 Primary Farming 53.6% Market Value of Ag. (97) $2,343,518,000

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Preservation of Farmland and Forestlands 2004 Virginia Agriculture Summit Richard Harlow, Michigan Department of Agricu

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  1. Preservation of Farmland and Forestlands 2004 Virginia Agriculture SummitRichard Harlow, Michigan Department of Agriculture February 24, 2004

  2. Virginia 2002 Farms 47,615 Acres 8,666,557 Average Farm 182 Average Age 56.7 Primary Farming 53.6% Market Value of Ag. (97) $2,343,518,000 33% from crops 67% from livestock Pop. 7,293,542 (02 est) 26 million acres Michigan 2002 Farms 53,273 Acres 10,083,006 Average Farm 189 Average Age 54.2 Primary Farming 54.5% Market Value of Ag. (97) $3,567,825,000 62% from crops 38% from livestock Pop. 10,050,446 37 million acre Virginia and Michigan

  3. Public Lands in Michigan • Lands under fee ownership = 4,535,340 acres • State Forests 3,812,136 acres • State Recreation /Parks 338,760 acres • State Wildlife and Game 340,324 acres • Other Areas 44,120 acres • Federal Forest land 2,000,000 acres

  4. Techniques for Preserving Farmland and Forest Land • Creating Tax Incentives • Providing for Development Rights Purchase • Enhancing the Economic Viability of Agriculture

  5. Tax Incentives & Temporary Restrictive Covenants • Voluntary (Non-regulatory) • Incentive Driven (Property tax reductions or income tax credits, assessment exemptions, right to farm.) • Temporary • Typically a Recapture provision • May be used for farmland & open space

  6. Land Preservation Programs in Michigan • Temporary Restrictive Covenants • Farmland Development Rights Agreements • Local Open Space Easements • Designated Open Space Easements • Commercial Forest Program • Purchase of Development Rights • Agricultural Preservation Fund

  7. Farmland Preservation Agreements • Established in Michigan in 1974 • Landowner enters into a temporary (10 years) agreement with the State, restricting the development of the land in exchange for certain benefits. (Lease of development rights) • Agreements may be extended by the landowner.

  8. Farmland Agreement Benefits • Benefits • Landowner may claim a state income tax credit the amount by which the property taxes on the enrolled land exceeds 3.5% of the household income (formerly 7%) • Enrolled land is exempt from special assessments for sanitary sewer, water, lights and non-farm drainage

  9. Farmland Agreement Participation • Currently 47,000 Farmland Development Rights Agreements in Michigan. • This represents about 4 million acres of Michigan farmland protected or about 40% of the farmland in the State.

  10. Qualification Requirements to Enroll - If parcel is 40 acres or more and more than 51% in agricultural production. - If the parcel is less than 40 acres but more than 5 acres and is 51% in agriculture and produces more than $200 gross income. -If the parcel qualifies as a specialty farm.

  11. Recapture When a Farmland Agreement is Terminated • When a Farmland Agreement expires or land is removed prior to expiration, it is required to repay the tax credits taken during the last seven years under the agreement. • In cases of early termination an interest charge is made.

  12. Required Repayments • Repayment money goes into the Michigan Agricultural Preservation Fund.

  13. Forest Land and Open Space Preservation

  14. Local Open Space Easements Temporary 45 Easements 6,000 acres Landowner forgiven a portion of property taxes by local government Designated Open Space Easements Temporary 16 Easements 4,000 acres Local government reimbursed for a portion of property taxes by State Local and Designated Open Space Easements

  15. Commercial Forest Program • Private landowners enroll their land. • Property tax paid per acre by landowner $1.10. • Local government is reimbursed an additional $1.20 per acre by the state. • Enrollment is recorded with the register of deeds. • Land must be made available for public hunting. • Land removed from the program must pay a penalty. • In Michigan more than 2.2 million acres enrolled.

  16. Purchase of Development Rights Program (PDR)

  17. What are Development Rights? • Development rights are a severable right in land that includes the right to construct buildings or to subdivide the parcels. • Development rights are similar to mineral rights in that they can be leased or sold.

  18. Typical PDR Easement Provisions in Michigan • The land may only be used for agricultural purposes. • Development is limited to the construction of farm related buildings. • The minimum parcel size for land divisions is 40 acres. • The easement is permanent.

  19. The Michigan Agricultural Preservation Fund • Grants to local governments for agricultural conservation easements. • Purchases of development rights under the current state program.

  20. How do Local Governments Qualify for PDR Matching Funds? • Local government must adopt a purchase of development rights ordinance. • Ordinance must contain: • An application procedure • Criteria for parcel selection • Method to establish the price to be paid • Local land use plan must be updated and include a farmland preservation program.

  21. Enhancing the Profitability of Agriculture

  22. What can be done? • Agricultural renaissance zones • Encourages processing facilities • Tax incentives for new facilities • Encourage Value added agriculture • Promote Diversification • Promote and encourage exportation of agricultural products • Promote consumption of locally produced farm goods • Encourage local promotion of local agriculture

  23. Why Preserve Land Based Industries?Michigan Land Resource Project A look at the future of land use in Michigan and the impact on its land-based industries…

  24. Michigan Land Resource Project • The following maps indicate projected land use in Michigan for 2020 and 2040 if current trends continue. • A full copy of the report is available at www.pscinc.com

  25. Built Agriculture Other vegetation Forest Lake Wetland Michigan Land Use, 1980

  26. Built Agriculture Other vegetation Forest Lake Wetland Michigan Land Use, 2020

  27. Michigan Land Use, 2040 Built Agriculture Other vegetation Forest Lake Wetland

  28. Southeast Michigan, 1980

  29. Southeast Michigan, 2040

  30. “The 37 million acres of Michigan is all the Michigan we’ll ever have…..” Former Michigan Governor William Milliken

  31. The 26 million acres of Virginia is all the Virginia there will ever be.

  32. Questions? Contact • Farmland and Open Space Preservation • Michigan Department of Agriculture • PO Box 30449 • Lansing, Michigan 48909 • 517-373-3328 • Web site: www.michigan.gov/mda Keyword Search - Farmland Preservation

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