Pennsylvania Farmland
Preservation Association
Prof. Tom Daniels
Dept. of City and Regional Planning
University of Pennsylvania
May 18, 2011
What Role for PFPA?
 Self-audit:
What is working, what
isn’t? What needs to be changed?
 Innovate: Like-kind exchange, TDRs,
partnerships, points-based appraisals
 Update program
 Share information: successes as well
as failures: Celebrate Success
 Work with Bureau, lobby—state
legislature and NRCS (Congress)
 Don’t get complacent
PA Farmland Preservation Funding
Source: Warwick Township, PA
Issues in the 2008 PA Farmland
Preservation Study
The Weighting of Soils, Development
Pressure, and Other Factors (Since 1994)
 The current system is a minimum of 40%
on soils, and emphasis on preserving
farms under a considerable amount of
development pressure
 Two key strategies are missing:
Preserving farmland in large contiguous
blocks and along growth boundaries or
boroughs

25-year Extinguishment Clause
 Time
to remove this
 Maryland has done this
 Make easements really permanent
 Link
ag zoning with Ag Preservation
 Lancaster County APB does this
 Otherwise, risk of preserved farms
acting as a magnet for development
Farmland Preservation Report

A cap of $10,000 per acre was removed
from the program in 2001. As of the end
of 2007, according to the audit, the state
had contributed funds to 36 projects
totaling 2,613 acres costing over $10,000
per acre and a total of $38.3 million. The
report stated that those funds would have
purchased 23,759 acres using the state’s
average per acre cost of $1,612 for
easements costing less than $10,000.
Pay to Play
 Require
local dollar allocation for
farmland preservation in order to
receive state matching funds
 How much $$$ is reallocated each
year from counties that are not
spending their state funds?
Allocation Formula
 Currently
based on county property
transfer revenues and county
allocation relative to other counties.
 Should be based on percentage of
state ag output and allocation
relative to other counties—this is the
reallocation formula
 1989 Allocation Formula
A Recent Study at Penn
 The
real estate transfer tax variable
was the most important variable with
a Beta value of -.821. This negative
value indicates that a higher real
estate transfer tax corresponds with
a decrease, or smaller increase, in
agricultural sales from 1987 to 2007.
More Results
A
county’s share of the state’s
agricultural sales had a negative
influence on the percentage of acres
preserved.
 This suggests that more funds should
be given to counties with high shares
of PA’s agricultural industry so that
counties with a large amount of ag
activity can preserve more farmland.
Descriptive Statistics of Variables
Variable
Change in Agricultural Sales
1987-2007*
Acres Preserved
Percent Acres Preserved
Minimum
-70%
(Wyoming)
Maximum
Mean
69% (Schuylkill)
98 acres (Pike)
63,447 (Berks)
-2%
7,797
acres
1% (Greene)
29% (Berks)
6%
28 years (Lancaster)
18 years
$9,527 (Chester)
$3,841
$7,633,13
2
Real Estate Transfer** Tax Proxy
5 years (Pike
and Greene)
$1,666
(Warren)
$211,379
(Greene)
County Contribution**
$0 (Allegheny
$7,772,58
and Indiana) $90,949,415 (Lancaster)
6
Years in Program
Value of Farmland* (average of
1992-2007)
Portion of State's Agricultural
Sales* (average of 1987-2007)
Population Change
$32,099,063 (Bucks)
.4% (Pike)
19% (Lancaster)
2%
-6% (Cambria)
66% (Pike)
6%
* in 2007
dollars
** in 2010
dollars
Other Issues
 Backlog
of applicants
 Viability of Preserved Farms
 What uses to allow on preserved
farms (especially alternative energy
generation)
 Farmland prices
 Future funding
 Monitoring and enforcement,
especially with 2nd and 3rd owners
Contiguous and Stand Alone Farms by Acreage
Farm Blocks in Acres
Number of Blocks
Acreage in Block
339
71,910
231
65,743
9
20,927
250 or Less
18
37
275
12,112
13,039
25,832
Stand Alone Parcels
108
6,167
Within 1/2 Mile of a
Contiguous Block
76
4,382
Beyond 1/2 Mile of
a Contiguous Block
32
1,785
TOTAL
Contiguous Blocks
1,000
500-999
250-499
Nutrient Trading
A
possible funding source for
farmland preservation?
 Sewage treatment plants in
Chesapeake Bay watershed are being
required to lower nitrogen and
phosphorus emissions.
 Sewage treatment plant can upgrade
or buy credits from farmers or others
with “certified” credits (certified by
DEP)
Nutrient Trading II
 Farmer
sells reduction in nitrogen
from BMPs that exceed “baseline
compliance” to sewage treatment
plant.
 DEP and PennVest set up a nutrient
trading auction (wrong model)
Nutrient Trading III—Results So
Far
 Oct
28-29, 2010: 21,000 pounds of
nitrogen removal each year for 3
years at $3.04 per credit (lb)
 Nov. 4-5, 2010 41,000 pounds of
nitrogen at $2.75 per credit (lb).
Sellers, E-Town Borough, Lancaster
County (7,369 credits), City of
Lancaster (29,909 credits), Lycoming
County (3,733 credits). Buyer: PPL
EnergyPlus, LLC
Nutrient Trading IV
 The
big player is Red Barn
Trading in Lancaster
 Website:
http://www.dep.state.pa.us/river
/Nutrient%20Trading.htm
Nutrient Trading V
 Pat
O’Connell’s idea was to have the
county buy the credits from the
farmers and re-sell them to the
sewage treatment plant operators.
 The farmers would receive payment
over 10 years (Installment Purchase
Agreement).
 An “enhanced easement” would
include the required BMPs to exceed
baseline compliance and generate
credits.