Farmers' Retirement Plan
Thinking about farm succession . . .

Reducing the market value of the farm land.

In order to transfer ownership of a farm to young farmers, the market price of the farm land—which most often has little to do with it's value as a farm—needs to be lowered.

Their are existing land trusts which hope to be able to purchase development rights to farms from willing farmers. What are development rights? When one owns a piece of property, there are many rights which come with it, such as mineral and water rights, privacy rights, etc. One of these is the right to develop the property, such as by breaking it up into houselots. It is possible, however, to sell not the whole bundle of rights that come with any property, but only some of those rights. A Conservation Easement could, for example, allow a property to be used only for farming. The right to subdivide or develop a property can be sold by the property owner to another party—possibly a Land Trust—which would purchase this right for the purpose of holding onto it to prevent the land from being developed. The market value of the land is now decreased because it does not come with a full complement of rights. The farmer is paid the difference, and has now been partially paid for the farm by simply agreeing to keep it in farming, which is what was wanted anyway.

Finding a willing land trust or other entity to purchase our development rights and negotiating such an agreement is a chore we still have ahead of us. One thought we have had is to offer our customers the opportunity to purchase shares of our development rights.