2007 Alliance Proposals to Improve the Farm & Ranch Lands Protection Program

A Great Program that Needs Changes

The Farm and Ranch Lands Protection Program (FRPP) provides matching funds to land trusts (land conservation nonprofits) and state and local governments to purchase conservation easements on farms and ranches.  Its purpose is to keep important farmland and ranchland from being lost to development.  Even on our best soils, farming cannot compete economically with real estate development.  If our best soils were all far from such development pressure, that would be fine.  But they aren’t.
 
FRPP is administered by the Natural Resources Conservation Service (NRCS) of the US Department of Agriculture.  It has been a popular and successful program. The 2002 Farm Bill provided $500 million from the Commodity Credit Corporation for the program over 5 years, for grants of up to 50% of the cost of buying easements to protect farm and ranch land.

As of September 6, 2006, FRPP had protected more than 475,000 acres.  In FY 2006 alone, well-qualified applications for 74,000 acres were turned down because of insufficient funding.  Actual demand is much higher – NRCS offices, aware of the funding limits, have actively discouraged many potential applicants.

Over the past few years, however, annual rules changes have made the program less farmer-friendly, more awkward for partners to administer, and less cost-effective.  We recommend the following changes to the program:

1. Increase federal funding to $300 million per year.
   
   State and local governments are increasing their spending on farmland and open space protection every year.  Dedicated state farmland protection programs, and just the dozen largest county-level farmland protection programs, spend $434 million per year.  That doesn’t count dozens of other county and local programs, and hundreds of open space programs for which farmland conservation is just one of their goals.
   
   Why increase federal funding when the states are putting so many resources into this?  The federal funding remains an important incentive for state and local governments to continue their investment; and it is a very important incentive for the formation of new programs (such as those started in the last year by the states of Georgia and Texas).  The federal program also provides uniform standards for state, local and nonprofit programs, and a uniform focus on protecting important soil resources from being lost to agriculture.
   
   
2. Clarify that FRPP funds are grants to partners and not property acquisition by USDA.
   
   The legal complications that come from the federal government viewing itself as the purchaser of these easements are making the program unnecessarily complicated and burdensome for partners, landowners, and NRCS alike.
   
   It has resulted in USDA insisting on being a “co-holder” of the easements, doubled the cost of appraisals, added additional process steps designed to support condemnation (rather than a voluntary sale), led NRCS to require partners to indemnify it for CERCLA responsibilities, and has deterred many landowners who are uncomfortable with a “landlord” headquartered hundreds of miles away.
   
   None of this is necessary.  USDA provides millions of dollars in EQIP funds to farmers for capitol improvements without assuming an ownership interest in those improvements.  Nor has FRPP has never had to assert its ownership interests in order to enforce the terms of an FRPP easements.
   
   
3. Allow USDA to fund farmland conservation programs, rather than exclusively funding individual easements.
   
   FRPP was originally set up to judge individual easement projects, and required that the projects have been taken to the point of having a “pending offer” – in practice, a completed option to purchase the easement from the landowner.  That was done at a time when the program was new, program staff inexperienced, and funding was so restricted that no one wanted to fund a project that wasn’t essentially completed.
   
   The requirement for “pending offers” should now be removed.  It has resulted in a significant administrative problem, in that partners have to go through a year or more of work to get a landowner to sign an option prior to knowing if they will have funding approved for the project.  In addition, it has forced partners to sign options on projects before NRCS has a final program budget, and even before it has issued its RFP with rules for applications!
   
   NRCS has always said that it wanted to reward partners that took a strategic approach to protecting important farmland.  The program has grown to the point where it now makes sense for the NRCS to spend more time looking, guiding and judging farmland protection programs rather than individual projects.
   
   Congress should give USDA the authority to give program partners grants for a strategic farmland protection program initiative that encompassed multiple potential projects.  This will enable USDA to highlight and fund strategic and effective programs, in lieu of individual easements.
4. Change the funding match formula to reward partners who encourage landowners to sell easements for less cash.
   
   The current formula requires that a partner provide either 50% of the purchase price of the easement or 25% of the fair market value of the easement, in cash.  Ironically, this provides less federal funds for projects with a large donation by the landowner, and more federal funds for projects with less contribution by the landowner!
   
   The generosity of landowners provides significant leverage to this program, leverage that grows even more important as real estate values escalate.  A funding formula that allowed at least half of the nonfederal match to be a contribution by the landowner contribution would provide a greater incentive for donations.

For more information about land trusts and the FRPP program, contact:

Russell Shay
Director of Public Policy
Land Trust Alliance
rshay@lta.org
202-638-4725 x 305