Pennsylvania's "farmland preservation" boondoggle

Like an Autumn rite, each fall as the exquisite aroma of ripening Concord grapes permeates the eastern Erie County countryside, the Erie news media hone in on the usual suspects for quotes and sound bites on the qualitative and quantitative aspects of the grape crop, including estimated tonnage per acre and sugar content. Together those factors determine the gross value of the harvest.

One or two prominent grape farmers are briefly interviewed for their take on the condition of and prospects for the year’s crop, while an expert over at the regional agricultural experiment station is consulted on more technical aspects, and a manager of the Welch Grape Juice plant in North East, the largest of its kind in the world, lends his expertise on the subject from the perspective of the global marketer. Occasionally an agronomist is called in to add academia’s glossy imprimatur to the process.

These formulaic media reports are relentlessly simplistic, predictable and invariably misleading or worse because the print and broadcast reporters who produce them know little or nothing about the subject, often drowning in arcana and missing the big story.

Today, for example, the Erie Times-News ran an editorial commenting upon the prospective economic impact of the grape crop on Erie County and beyond, summing it up with the headline “Grape industry rebounds” and concluding that “Agriculture is a roller coaster business, as growers know all too well. But right now, these purple, golden and green vineyards are producing plenty of green.”

But only a week or so ago, The Times-News ran an article which said just the opposite. A grape farmer the newspaper’s reporter talked to said - despite what looks like an excellent crop - growers expect little more than a break-even year, with a harvest of six to seven tons of grapes per acre. At this year’s expected prices, the grower said, income from that level of production will barely cover production costs. Apparently whoever writes and edits the editorials at the Times-News doesn’t bother to read the articles the reporters write.

But the Times-News and other Erie media can’t see the vineyard for the grapes. The real story which the Erie news media have missed and ignored for years has nothing to do with cyclical crop and harvest dynamics. Rather it’s a gradual trend over the past two decades which represents a paradigmatic shift in the grape farming culture, and has quietly transformed the grape growing corps in eastern Erie County with a long tradition of self-reliance from hardy independent folks of yore to government hand-out recipients of hundreds of thousands of dollars, subsidized by taxpayers at all levels of government.

This transformation is the regrettable but unintended consequence (at least for the mindless masses who supported it) of something euphemistically known as the state Farmland Preservation program, enacted into law in 1987 by the Pennsylvania general assembly under the most false of pretenses, yet enthusiastically heralded by the Times-News and other Erie news media as the salvation of Farmland Pennsylvania.

Back about two years ago, The Times-News published an article bearing the garish headline: “Dying on the vine, Concord grape growers struggle to hang on.” A reality check indicated otherwise.

While one could sympathize with a few who were hurting, the greater majority of grape vineyard owners in Erie County, especially in the east county, have done very well, thanks to enormous state subsidies many of them have received under the so-called farmland preservation program, a get-rich scheme for a select few at the expense of millions of Pennsylvania taxpayers.

In 2005, that ill-advised scheme got a healthy multi-million dollar boost with the passage of the so-called “Growing Green II” ballot proposition by Pennsylvania voters which provided an unspecified but massive amount of funding for the program.

During the past 18 years since the program's inception in 1989, more than 50 Erie County farmers within seven municipalities have collectively received more than $7 million from state and local taxpayers for selling development rights on their farms to the county or state under the program. By selling the development rights to the state for a negotiated sum the farmers agree to continue that acreage in farming activity in perpetuity and never use or sell it for non-farming development purposes.

Statewide, about $1 billion has been poured into the program, which was launched with a $100 million statewide general obligation bond issue approved by Pennsylvania's voters in 1987. The massive subsequent funding - ten times the original amount approved by the voters - however was not subjected to a vote of the people, but has been surreptitiously approved incrementally by the legislature and successive governors, both Republican and Democrat.

The awards to individual farmers in Erie County since they began participating in the program in 1994 range from a high of $832,000 for 595 acres committed to the program to a low of $30,000 for 20 acres. Total acreage committed to non-development of farmlands in Erie County since the program began is upwards of 2,500. Guess what virtually all of them have used some of the windfall they collected from the state for : to develop their non-preserved farmland!

The Farmland Preservation Program, a huge financial boondoogle on behalf of participating farmers, real estate developers, land speculators, money changers and other promoters throughout the state, is jointly administered and funded by the state and county governments, with some funds available from township and federal sources as well. The Erie County Planning Department administers the program locally under state- mandated procedures.

One of the program's more insidious features is that it contains no disclaimers prohibiting state or local legislators or officials who have used their public offices to create and administer the program from exploiting and profiting from it by participating, a clear violation of ethical precepts. While there is no evidence that this has occurred in Erie County, there is no guarantee that it won't. It has occurred frequently in other parts of the state where the program is being implemented far more extensively.

While local and state officials and bureaucrats repeatedly claim the program has widespread public and farmer support, in the case of the public, it's unlikely the general public would be supportive if it knew what is really going on behind the extravagant claims of its supporters. But it doesn't because of the failure of the news media to expose it.

At the same time, prospectively eligible farmers who hope to participate in this giveaway program would be foolish not to support it, given the enormous subsidies it makes available to them with no real commitment on their part. Whoever said there’s no free lunch, never heard of Pennsylvania’s farmland preservation program.

The program’s purported goal is to assure permanent preservation of viable agricultural lands in order to protect the state's agricultural economy and culture. Its objective is "to slow the loss of prime farmland to non-agricultural uses," according to the state Bureau of Farmland Preservation in Harrisburg, which administers the program at the state level.

But since its idealized inception nearly two decades ago, the program has taken a sharp turn to the right. Elsewhere in the state, for example in Lancaster County, the largest agricultural county in the state - compared to which the Erie County program is a mere drop in the bucket - it has had the diametrically opposite effect of opening more farmlands to development at much higher prices, putting them out of reach of all but the most affluent.

In a smaller way, it has had the same effect in eastern Erie County and will continue to expand here. In one notable instance in southeastern Pa., the state paid a Montgomery County farmer $3.7 million for the property rights to his 70 acre farm, an average of about $53,000 per acre. Another farmer there was paid $48,000 per acre. Inevitably, this will happen in Erie and other participating counties as well, albeit on a lesser but munificent scale.

While farmers who participate in the program sell the development rights to their land, they can continue to raise, harvest, market and utilize any livestock, crops or products grown or derived from them for their own benefit, in effect, double dipping into the state and local taxpayers' pockets.

They also retain sub-surface rights to any mineral deposits, such as oil and/or gas. The commercial reality which enables the so-called preservation program to gobble up more land than it preserves derives from the fact that the portion of the farmers' land not preserved which adjoins reserved land, over time becomes much more valuable on the real estate housing and commercial market.

That's because private purchasers can be assured the non-preserved farmland they buy on which to build their homes or businesses won't be blighted by unsightly housing, business or industrial developments on adjoining land owing to its preserved farmland status. Their back and front yards will remain forever open to scenic farmland vistas.

This hastens and expands development on non-preserved farmland, as participating farmers jump at the opportunity to exploit rising market prices precipitated by the diminishing amount of land available for development. It also gives them a windfall with which to launch housing and other developments on their non-preserved farmland, thus removing that acreage from farming, an alarming trend which has already begun in east Erie County

How the “farmland preservation” boondoggle works

The monetary amount participating farmers or owners of farmland receive for their land sought to be preserved, called "easements," is derived from the difference for which their land would sell for farming purposes compared to how much it would fetch for development purposes.

As a hypothetical if somewhat simplistic example, if Farmer A offered to buy 500 acres from Farmer B for its market value of half a million dollars for farming purposes, and a real estate developer offered Farmer B $750,000 for the same acreage for residential, commercial or industrial development, the state/county would pay Farmer B the half million dollars plus the $250,000 difference to place his acreage in the farmland preservation program instead and retain its farming function.

North East grape farmers outnumber by far those from other parts of Erie County who have been awarded funds under the program since its inception. Plans have been initiated to slow down participation of North East farmers in the program in an effort to spread its limited funding around to other parts of the county previously less favored.

There are four possible funding sources for the farmland preservation program: the county, state and, rarely, federal and township governments. The program was initially funded by a $100 million general obligation bond approved by the voters in 1987, which was heavily lobbied by certain farming, real estate interests, banks, land developers, well-organized land trusts in the nation and others.

The bond issue, though controversial, was readily passed by more than 2 to 1, with 1,172,483 voting for it, 575,330 against. Pennsylvania voters naively supported the bond issue because of its superficially attractive features and deceptive patina which over the years continue to over-ride the program's hidden mercenary realities which defeat the purported goal of farmland preservtion. Over the years, more than half as much has been expended on the program annually as was provided by the initial $100 million bond issue, although no voter approval has been obtained for the additional funding.

Since its inception in 1989 through Sept., 2003, the state and 57 of Pennsylvania's 66 counties have paid about one billion dollars to preserve about 300,000 acres of farmland, according to state figures. In some southeastern Pennsylvania farming areas, county and municipal bonds have been floated to expand the farmland preservation program because of limitations on government funding.

Authorization of these bonds has been fueled by special interest groups having nothing to do with farmland preservation except to profit from it by exploiting the development it is supposed to curb, but which in fact it generates, such as realtors, banks, land developers, general and sub-contractors, and others.

Meanwhile, rank and file voters, duped by the program's duplicitous promoters and the news media's failure to expose them, continue to be led down a merry path. Amortization of these bonds shifts the burden for their repayment onto future generations who have no say in whether they want to assume this burden of debt for a program that has more to do with profiteering and accelerated development of rural landscapes than with farmland preservation.

Pennsylvania owns the dubious distinction of leading the nation in the number of farms and acres of farmland protected, about 300,000. But this distinction is double-edged, because the longer range effect, as noted earlier, has been to open up more farming land to development faster than would otherwise have occurred, but at much higher prices than lower income folks most in need of affordable housing can pay for it.

Back in 1987, when the $100 million general obligation bond proposal was placed before the state's voters, it was aggressively lobbied by farming and other special interests which would benefit from it. But there was one exception. In Lancaster County, Donald L. Ranck, a prominent and influential farmer in Paradise Twp., along with a handful of devoted supporters, launched a vigorous campaign opposing the bond issue and the program on grounds that, as formulated, its long-range effects would adversely impact both farmland preservation efforts and the interest of taxpayers throughout the state, without commensurate benefits.

Today, Ranck still actively opposes the relentless expansion of the program, while advocating reforms which would sustain the preservation of Pennsylvania's farmland without the deleterious effects he and others claim it promotes in its present form, but so far with limited success in the face of politically powerful development interests.

His proposed reforms would also significantly reduce its exploitation of taxpayer dollars. Says Ranck: "The best prevention for farmland development is allowing landowners to keep their development rights, keep their building rights, keep their management rights. The worst loss of farmland occurs next to 'preserved' farms. This is so obvious you may wonder why the preservation gang can't see it. We believe they can, but continue their charade for their own personal profit. Future generations will curse them for it!" Rank predicts.

Currently, portions of 2,618 farms and 301,120 acres have been preserved statewide through the program. But the Commonwealth is not keeping track of how much non-preserved farmland has been lost to development as a result of the program since its inception nearly two decades ago. Nor is it letting it be widely known how much it has and will continue to cost blindsided taxpayers statewide for the disproportionate benefit of a very few.