Plan Trades on Development Rights to Give Young Farmers a Future -- and a Farm - Southern Maryland Headline News

Plan Trades on Development Rights to Give Young Farmers a Future -- and a Farm


By KENNETH R. FLETCHER, Capital News Service


Terri Wolf-King tends strawberry plants on the Dorchester County farm that she and her husband were able to buy through an innovative advance on the development easement on the property. Officials hope that financing technique can be a model for other young farmers looking to buy farmland in Maryland. (CNS Photo/Kenneth R. Fletcher)

HURLOCK - Terri Wolf-King, 41, and her husband, Jeff King, 33, wanted to buy 258 acres of farmland near their Dorchester County home after they married five years ago.

They already had 70 acres that Wolf-King bought in 1996, but land prices had skyrocketed since then, making their dream of expansion seem out of reach.

"The real estate lady laughed when we told them what we wanted to do," King said as he drove a combine harvesting soybeans on the land the couple finally bought in 2005.

The Kings had the last laugh. They were able to structure an innovative deal that put their farm in an easement that protects it from future development, and then used the easement money as collateral to get a loan the same day to buy the farm.

Now, farm advocates hope to use the Kings' example as a model for other young farmers in the state in the hope of slowing the steady graying of Maryland's farmers.

Under the Next Generation Farmland Acquisition Program, the Maryland Agriculture and Resource Based Industry Development Corp. would provide eligible farmers under age 45 up to 70 percent of the easement value of a property, giving the farmer equity for a loan.

The farmer then has the option of finding a land preservation program to buy the development rights at a higher price within three years, paying back MARBIDCO and pocketing the difference. Otherwise, the Maryland Agricultural Land Preservation Foundation pays back MARBIDCO's investment and takes over the easement.

"Farm lenders have repeatedly encountered the same situation," said Steve McHenry of MARBIDCO. "The young farmer desires to buy a farm that has just become available, if only the development rights could be sold off, then they would have enough to buy the farm."

That is just what the Kings did to get their Hurlock farm, where they now raise everything from chickens to pumpkins, strawberries, wheat and corn.

"It was a lot of paperwork and a lot of praying," King said. "It was kind of amazing what we did."

But they are an anomaly in Maryland, where the average farmer's age has risen to 56.

"It's darn hard for a younger person who doesn't have established credit history backing them to buy farmland," said Sue DuPont, spokeswoman for the Maryland Department of Agriculture.

In 2002, the U.S. Department of Agriculture counted 1,071 Maryland farmers between 25 and 44, while there were 2,183 farmers over 65.

And farmland prices have shot up as development encroaches on rural areas, discouraging younger farmers who want to break into agriculture. An average acre of Maryland cropland has gone from $3,050 in 1997 to $9,100 this year, according to USDA data.

"Really it's no big secret," Wolf-King said. "Somebody who develops land for residential use is going to pay a whole lot more than a farmer who will keep it in agricultural use."

In addition to farmland, other costs like fuel, fertilizer and equipment have gone up as well, she said.

"It's difficult enough in agriculture to keep a reliable income stream with prices and weather being volatile," said Kenny Bounds, vice president of government affairs for MidAtlantic Farm Credit. It was Bounds who came up with the idea of an easement advance and put the Kings in touch with the Eastern Shore Land Conservancy.

With farming being such a gamble, Bounds said, most young farmers do not want to take on the high debt load that comes with buying a farm. That is why farmers have to really love agriculture to consider getting started, the Kings said. "It's not as attractive for a young person to have to work so hard," Wolf-King said. "Once you've invested so much, the return is slower . . . . It takes a long time to get anywhere."

Agriculture is an unpredictable business, King said. "The risk we take is atrocious."

After their experience, the Kings sat down at a picnic table in front of their home with Bounds and representatives from the Maryland Department of Agriculture to work out a model. The result was the Next Generation Farmland Acquisition Program, which was approved in 2006 by the General Assembly, but has not yet been funded.

Bounds said the proposal would help a lot of people.

"I have so many cases that I come across where young farmers want to buy a piece of land and they can't afford to make payments on the market value of that property," he said.

The importance of preserving farmland for open space, wildlife habitat and "a way of life that is essential to Maryland" supporting young farmers a vital issue, Bounds said.

"It's a tough time in Maryland to be looking for funds," Bounds said. "It's critical to get the next generation on the farm and not have the land go into development."

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