Professor Loretta M. Lynch

MARYLAND’S AIM TO TRIPLE PRESERVED AGRICULTURAL LAND WILL REQUIRE $4.58 BILLION

Q: What are the Maryland General Assembly’s goals in terms of agricultural land preservation ?

A: The General Assembly passed a joint resolution in the 2002 Regular Session that set a goal of tripling, by 2022, the existing number of acres of productive agricultural land preserved by land preservation programs.

Q: That’s an ambitious goal. Do you know how they arrived at that particular figure – tripling, rather than, say, doubling the amount of land ?

A: Maryland was losing an estimated 18,000 acres to urban, commercial, or other nonagricultural uses, and the legislators didn't want to see Maryland become one large urban development. They were also concerned with maintaining large contiguous blocks of prime agricultural land to retain the agricultural economy.

It's even more ambitious than it sounds, though, because Maryland’s population is also projected to grow 11.5 percent, to 6 million people, by 2020, which likely would require ongoing conversion of agricultural and forest land to housing and commercial development. The current rate of land consumption is 2.5 acres per person.

Q: How much of Maryland’s total acreage is in farmland or forest land ?

A: Maryland has 6.2 million acres, of which 3.8 million are privately owned, undeveloped - one-half in agriculture and one-half in forest or natural cover. Developed lands represent only 20 percent of Maryland’s total land area, whereas protected lands¹ account for the other 19 percent.

Q: How many acres have Maryland's preservations programs preserved so far?

A: In the first 25 years that land preservation programs have existed in Maryland, the state and county programs have preserved approximately 343,000 acres – so, they need to preserve about 686,000 more.

Maryland has set other land preservation goals as well: for the Rural Legacy program, 200,000 acres; for the Green Infrastructure program, 1,500,000 acres; and for the Chesapeake Bay Agreement – which has Maryland preserving 20 percent of the Maryland Watershed by 2020 – about 1,240,000 acres.

Q: What program or programs does the State use to purchase the land ?

A: There are several land preservation programs in Maryland. The statewide one is MALPF, or the Maryland Agricultural Land Preservation Foundation. It began in 1978 and enrolled its first acre in 1980. Maryland enrolled more land than any other state for over 20 years - it was only recently surpassed by Pennsylvania, which of course is a substantially larger state.

Also, several counties have their own land preservation programs – for example, Calvert County and Montgomery County are considered leaders in the use of TDR² programs. Howard County’s use of installment purchase agreements is studied throughout the country. Carroll County has a program to target new farmers. Other counties also are active in farmland preservation, so there are a variety of programs. The Rural Legacy program, begun in 1997 as part of the state’s Smart Growth program, seeks to preserve large, contiguous blocks of natural and working landscapes.

Q: So, as an economist, you calculated the amount of money the State would need to budget to achieve this goal today.

A: That’s right. My coauthors and I [Karen Palm, Sabrina Lovell, and Jay Harvard] found that Maryland would need to devote $4.58 billion to reach this goal. However, if land values continue to increase, the cost of preserving these acres will obviously also increase.

Q: That’s a lot of money. How did you come up with this figure?

A: We used econometric techniques and agricultural and land market sales to determine the dollar value of land and location characteristics in Maryland’s markets. We then used these estimated values to predict the market sales price of all agricultural and forest land in the State. We estimated prices for more than 3 million acres of agricultural and forest land within Maryland’s 23 counties. Given that, we approximated the budgetary resources needed to meet the State’s goals.

Q: How will the State fund this?

A: The General Assembly did not address that in the resolution. MALPF is financed through the State's Real Estate Transfer Tax, which is a tax on all real estate property transfers, and the Agricultural Transfer Tax, which is collected on farmland when converting to another land use. MALPF and the Rural Legacy Program also receive some funding from State-issued general obligation bonds.

If we look at the Agricultural Transfer tax as one of MALPF’s dedicated funding sources, we find that a great deal of farmland has to be converted to finance one acre of preservation. So given the average 2002 MALPF easement price per county, Carroll County would require the conversion of $60,051 worth of farmland, Baltimore County the conversion of $76,352, St. Mary’s the conversion of $49,607, and Talbot County the conversion of $40,722. In terms of acres, the preservation of just one acre of land in Carroll County would require the loss of 11.65 farmland acres elsewhere in the County; in Baltimore County, the loss of 9.6 acres; in St. Mary’s, the loss of 12.75 acres; and in Talbot County, the loss of 9 acres.

Q: I know that MALPF requires a farm to be of a certain size ...

A: Fifty acres.

Q: ... in order for farmland or forest land to be eligible for its program. Can you explain the basic rationale behind this criterion? That is, why would MALPF be interested in preserving a 50-acre farm with contiguous acreage but not interested in two 25-acre farms?

A: If the two 25-acre farms were contiguous with each other, they would be eligible on that score. MALPF seeks to promote orderly development and to retain a viable farm industry– both are goals of Maryland’s Smart Growth Initiative – so wants larger swaths of farmland, not just pockets of it here and there.

Q: And determining if preservation programs are actually changing the rate of farmland sounds like the topic of another research project.

A: It is! In fact, I’ve already studied that. My graduate student Xiangping Liu and I find that in the Midatlantic states, having an agricultural land preservation program decreases a county’s farmland loss. In fact, we have a paper about that on our website. [See http://www.arec.umd.edu/Publications/Papers/Working-Papers-PDF-files/06-08.pdf.]

Editor's notes:

/1 Lands owned by the federal, state, and local governments for parks and other purposes, private preserves, and privately owned lands with conservation easements.

/2 Transfer of development rights.

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Last updated: 02/9/2011