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Tools to Support Agriculture

Assessing the Need for 1.) Connecting New Landowners with Agricultural Producers and 2.) Data on the Terms and Values of Farms and Ranches with Agricultural Easements

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Please take a moment to fill out this online survey (link above below the following background information) so we can more accurately understand, 1.) whether there are potential impacts to ranchers and farmers when agricultural land that is leased by ranchers or farmers is sold to a new landowner,  2.)  the opportunities for connecting seasoned ranchers and farmers with new landowners who may wish their land to continue in agriculture or to make their land available for agricultural, and, 3.) the longer-term impact and value of conservation agricultural easements as a tool for farmers.  

The survey results will inform whether additional data or studies would be helpful to qualify and quantify the above problems and opportunities as well as determine the direction these projects might take.  The survey will take approximately 3 minutes to complete.  If you have any questions feel freed to reach out and we will happily respond.    Thank you,  the Hawaii Institute of Pacific Agriculture, Regenerative Organic and Probiotic Practices Hawaii, and the Kohala Chapter of the Hawaii Farmers Union.   For questions please email, agsurveykohala@gmail.com

For background information, please scroll down. 

Background and Challenges 

The latest U.S. Department of Agriculture census of agriculture found that Hawaii lost 82,000 acres of farmland and more than 700 farms between 2017 and 2022.   For ranchers and farmers that lease land for their operations, the loss of agricultural land and the turnover and sale of agricultural land to new owners can disrupt or end operations.  Understanding 1.) the potential scale of disruption to ranchers and farmers as well as 2.) the opportunity to connect seasoned farmers and ranchers with new landowners who may wish their land to continue in agriculture or wish to make their land available for agricultural uses, will help inform policies and actions to support farmers and ranchers as well determine the need for additional studies to quantify the problem.

Additionally, conservation easements (CE) can be an important tool in supporting the retention of agricultural in perpetuity by restricting future uses to only farming and ranching.  CE’s typically limit forever the amount of future impervious surface on a farm or ranch (roof area, roads, etc.) to help maintain healthy watershed functions while supporting uses that protect soil, water, wildlife and pollinator habitat, and cultural resources.  Nearly 7 million acres of agricultural land across the United States have been preserved and will remain in agriculture forever because of agricultural conservation easements.   

These easements also allow farmers and ranchers the opportunity to receive a one-time withdrawal of equity, which has served to keep farms in farm family hands (vs large corporations or development), investment in the ranching and farm operations to increase efficiency and retirement of debt to create greater financial viability, prepare for transitions to the next generation, among other benefits.  

Placing a long-term conservation easement on a farm or ranch is a significant commitment with responsibilities that are quite literally never ending for the landowner, including maintaining a congenial relationship with a land trust that will have changes in staff and leadership over the years.  Many landowners choose to place an easement on their property because of their strong connection to the land and desire to see the values of agriculture perpetuated within their community and family.   Many farmers and ranchers are conservationists and understand the value of preserving the natural resources associated with their land way beyond their tenure on the land. 

Personal values play a large role in why landowners pursue CEs.  At the same time, the withdrawal of equity must be meaningful enough to offset, at least for the current generation, the:  1.) significant responsibility of an in perpetuity dedication of land to agriculture that includes annual monitoring and reporting, which costs time and money, and often a commitment to CE terms that adds costs to the annual operating budget of a farm or ranch; 2.) loss of future financial opportunities for themselves, their heirs, and all future landowners; and, 3.) restrictions on their land and operations that may make future operations more difficult.  

So how is a price tag put on forever?   The typical valuation for estimating the value of an agricultural easement considers 1.) the highest and best use of a property and 2.) the value of the property with the easement restrictions with the extra, non-negotiable costs of the restrictions (restricted value):     CE value = Highest and Best Use Value – Restricted Value.

There is no or little data on the value of various easement terms (individually or additively) or how to value those terms financially over time.  For instance, what is the value of committing in perpetuity to organic certification or always including pollinator habitat or bee hives or restoring forest functions on a farm or ranch?  Will future potential buyers of a farm or ranch with these forever CE commitments value these terms or will the market look at these terms as costly liabilities?  What will buyers pay for a property with a CE and restrictions? 

The individual and cumulative impact of various conservation easement (CE) restrictions on the ag easement value and resale of a farm or ranch is not well documented.  No research could be found for Hawaii.  The Land Trust Alliance is a national nonprofit that provides technical assistance to land trusts and has a large network of contacts within land trusts around the U.S.  LTA could not locate data on the impact of conservation easements terms on resale value.  This information could be important for farmers and ranchers to make informed decisions about the impact of placing a CE on their property.    

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Intention

The survey will determine whether additional research or projects are warranted to:   

I.   Develop hedonic pricing economic models to better predict the impact of conservation easements (CE) on the resale value of farms and ranches in Hawaii by identifying how to best value the financial costs of maintaining and adhering to the terms of the easement.   The model would allow for a variety of potential easement terms to be considered and calibrated for various areas in Hawaii as real property values vary considerably between districts within islands, and, 

II.   Develop an online platform or app (keep it very simple) to match farmers and ranchers in need of lands for their operations with landowners who want to support ag with viable long-term leases for farmers and ranchers.