Agriculture Forum: New succession tools needed

Cherry trees blossom in orchards along Bingham Road in Leelanau County.

Much talk and attention has been given over the last several years to the implications of the retirement of the Baby Boomer generation, and the associated transfer of wealth — the largest inter-generational transfer of wealth in our nation’s history.

Inherent in this transition is the transfer of our region’s farmland by farm families from this same generation. Given that most farmers' wealth lies in the value of their land, the result is the pending succession of farmland unlike anything previously encountered in our region’s history.

A survey of farmers conducted by MSU’s Center For Regional Food Systems in 2013 identified more than 83,000 acres of farmland in our 5-county area (Grand Traverse, Leelanau, Benzie, Manistee, Kalkaska, and Antrim counties) that would change hands in the next 10-15 years — and did not necessarily have plans for continued agricultural use. That’s an area roughly 4 times the size of the Old Mission Peninsula.

Studies regularly show that farmland is most at risk of conversion to non-farm uses during times of transition. A significant loss of these resources could have negative effects on the region’s agricultural economy, tourism and the other contributions these resources provide to the region.

Having worked with our region’s farm families to assist them in preserving their farmland for nearly 20 years, I’ve witnessed first-hand the challenges inherent in this pending transfer of their land.

A few key factors make these efforts more complex than in past generations.

First, the market value for most farmland — and especially our best fruit-producing areas that share the same proximity to water and water views that are particularly attractive for residential development — far exceeds its value for agricultural use. This disparity has radically increased from the values seen by past generations of growers.

Second, and associated with this the growth in land values, is the need for more sophisticated succession planning by farm families to determine how to keep their land in agricultural use, when so much of their family’s wealth is tied up in that land.

Further, many more families have children who have pursued careers other than continuing the family farm business. Often one or more of the children wish to retain the farm while others do not, creating significant challenges in determining how to equitably or fairly treat these heirs when so much wealth is related to the families farmland.

Finally, new farmers entering agriculture in the region may be insufficient to take over the sheer amount of land slated to change hands. While the purchase of agricultural conservation easements, (commonly referred to as the purchase of development rights) spearheaded by the Leelanau and Grand Traverse Regional Land Conservancies, and supported by township taxpayers in Peninsula and Acme Townships, can significantly assist in these transition efforts, and are crucial to sustaining long-term business environments for agriculture in the region, they alone are not sufficient to address the sheer scale of the problem.

Thanks to the support of Rotary Charities, the Northwest Michigan Food and Farming Network — a loose-knit collaborative of individuals, organizations and businesses working to advance the success of our region’s food and farming efforts — is working to strengthen and create programs and tools that have proven effective in addressing these challenges elsewhere.

Of specific note is the Farmer 2 Farmer Program, a “farmlink” program collaboration between the Leelanau Conservancy, Grand Traverse Regional Land Conservancy, Taste The Local Difference and MSU’s Horticultural Research Station.

Farmlink programs create a central website and associated tools that allow for farmland seekers and farmland owners to connect with one another. Additionally, the Farmer 2 Farmer program allows for job postings in the agricultural sector in an effort to connect those interested in agriculture with internships, seasonal, and even full-time jobs in the agricultural sector. While we continue to work to improve the program, it remains open and available for use for anyone looking to advertise farmland available for sale or lease, as well as those who may have jobs in the agricultural sector. Those seeking farmland to to purchase or lease, and those who may like to procure work with a farm or ag-related business can also access the site for free. More information is available at www.f2fmi.com.

A variety of alternative financing vehicles are being established throughout the country. The Network is working to explore these programs to determine what models might work well to aid in financing the purchase of farmland, and the establishment of new farm businesses, especially for beginning farmers. Many of these programs are designed to attract “social” investors who are looking for avenues to invest — in something that provides returns that benefit the community in addition to financial a modest financial return.

Once such program that has shown significant success in helping to transfer farmland ownership is Dirt Capital Partners. Based in upstate New York, it works throughout the New England region. You can view its program structure and efforts at www.dirtpartners.com.

It’s incumbent on all of us to recognize that these family farms are businesses that pay multiple dividends.

More information is available at www.foodandfarming.com.

Brian Bourdages has been working to protect the region’s farmland and farming for nearly 20 years. He currently serves as a consultant to the NW MI Food and Farming Network, as well as to other efforts working to advance the the protection of the state’s agricultural resources, and serves as the region’s gubernatorial appointee to the Michigan Agricultural Preservation Fund Board. He can be reached at borgetc@gmail.com.

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