Farmland investment is crucial

December 14, 2009
| By Bob Boehm |
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Purchase of Development Rights programs and other voluntary farmland preservation tools are investments in the future of agriculture, local communities and Michigan’s economy.

Whether development pressure is high or low, they serve valuable purposes, including maintaining open space while helping communities identify areas most appropriate to remain in agriculture and those best suited for development. And in helping to save farmland, these programs also save our cities by helping to curb urban sprawl, utilize current infrastructure, and encourage urban improvements that make cities more appealing.

That’s why Farm Bureau member-developed policy supports the creation and effective implementation of temporary and permanent farmland protection tools to stabilize the land base, help maintain the agriculture industry’s competitive position, and aggressively increase its economic value to farmers and the state.

But we must not overlook the root cause of why farmers give in to development pressure in the first place. Agriculture is a high-investment industry prone to volatile market swings and weather uncertainty. Often when farmland is converted to another use, it’s because farm production costs exceed net income to the point where selling makes the most sense.

The U.S. Department of Agriculture estimates the average U.S. farm incurred farm expenses totaling $140,075 in 2008. In fact, U.S. total farm expenditures rose 8.3 percent in 2008 from 2007, and in 2007 rose 19.2 percent over 2006. Of the 2008 total, the Midwest region contributed most to the increase, 30 percent, with expenses totaling $91.2 billion.

So how do we keep Michigan farms profitable? To begin with, Michigan needs to create a regulatory climate that balances the state’s business, environmental and social needs. We must avoid pushing farms out of business with restrictive zoning measures or unreasonable estate taxes and other fees. Agriculture can’t be taken for granted either; the industry needs to be a focus of Michigan’s economic development efforts.

The cold, hard truth is that no community can buy all the farmland it wants to preserve. That’s why farm profitability is so essential, no matter the outcome of the Kent County Board of Commissioners vote.

Consider that governments often lure other business sectors with tax breaks and additional incentives. Yet, these businesses can pack up and leave once those incentives expire or business conditions change. Agriculture doesn’t work that way.

Put another way, you don’t preserve farmland just to save the property. You preserve the land to save the economic contributions that farmland brings.

Bob Boehm is commodity and marketing department manager for Michigan Farm Bureau.

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