
Land is conserved with a legal document called a conservation easement (typically held by a land trust) which permanently limits development, restricts subdivision, and protects natural resources. This is also known as “sale of development rights,” as landowners are usually compensated for the loss of the potential income from development (though some donate or partially donate this value). Conservation easements generally reduce the land’s appraised value and can impact a future sale price. In Vermont, the Option to Purchase at Agricultural Value (OPAV) tool is typically part of the conservation easement, to keep land affordable for farmers with commercial agricultural operations and discourage conversion of good farmland into estate-type properties.
Selling development rights is a critical economic tool for Vermont farmers, allowing them to sell a legal asset while still retaining ownership of the land, and use sale proceeds to expand, diversify, invest in new infrastructure, buy more land, and/or facilitate a family transfer. Despite its social, agricultural, and economic benefits, land conservation is also challenging. Not all farmers want or are able to conserve their land. The demand for funding to purchase development rights far exceeds the supply, despite years of relatively stable federal and state funding for farm easements.
Permanent farmland protection plays a critical role in the economic transformation and ownership transitions that Vermont agriculture is facing, but conservation alone will not ensure the survival of Vermont’s agriculture sector. Fortunately, Vermont’s farmers, land trusts, agricultural lenders, and service providers are well-coordinated, and share key goals around the successful transition of Vermont’s agricultural economy to the next generation, responsible land stewardship, and the importance of farm viability.
Conservation of Farmland
Funders and land trusts use established criteria to assess a land parcel’s resources (e.g., soils, water, special ecological attributes), development threat, and proximity to other conserved parcels, as well as the plans for the farm operation. The land is appraised to determine the current value with full development rights and the value after conservation with limited development rights. The easement value, and financial compensation to the landowner, is the difference between the two.
- For the past several years, the Vermont Housing & Conservation Board (Vermont’s primary funder of farm easements) has typically funded 20 to 22 farm projects each year, protecting about 3,000 acres.
- $2.7 million in state funding each year (on average) leverages $3 million in federal dollars through the Natural Resources Conservation Service (NRCS) and $1 million per year in philanthropic and local funds, as well as landowner bargain sales.
- VHCB’s current conservation pipeline has 40 projects waiting to be funded with a value of over $9 million of easement funding.