by Matt Alford, originally published in Oregon Business Magazine
The average Oregon farmer is 60-years old. Over the next twenty years, many farmers will retire, and their land will transition — but to whom?
Every family-owned business faces this challenge eventually, but the family farm is exposed to unique pressures and circumstances. Farms don’t exist without farmland, and that same land has become the target of investment companies and housing developers, with 25%-40% of farmland sales now going to investment and development companies in four Willamette Valley counties.
At the same time, land prices are increasing — averaging $30,000 per irrigated acre in Clackamas County — and young people who were raised on farms are now fleeing for other occupations. They watched their parents work hard yet constantly struggle to earn a profit. Farm work can be rewarding but the constant pressure of fluctuating income coupled with debt is enough to drive farm children off the land and into careers that aren’t saddled with these problems.
If a farmer is lucky, he or she might have one child who wants to take over the farm. But that presents a new set of challenges: Farms are notoriously land-rich and cash poor. The farmland itself is often the vast majority of the farm estate, so how are the non-farming children to share in the inheritance?
Farms often operate with rolling debt, and coming up with cash to buyout family members leads to the farmland being divided up and at least partially sold. If the farmer dies before creating a will and transition plan, death taxes (which must be paid to the state of Oregon within nine months) force a timeline for dividing the estate. Even if a family member is ready to continue working the farm, selling off land to pay siblings and the tax collector is almost a certainty. With land investors and developers standing by with cash-in-hand, the prospects of farmland staying in agriculture are slim.
Some economists may view this situation as an efficient market pushing the land into its highest value use. Just as the wagon train settlers came to Oregon and put the land to commercial use, so now are the land investors and developers replacing farms with houses.
The problem is that humans tend to build their settlements in the most fertile and productive soils of a region — rich, flat-bottom land near rivers. Despite land use policies Oregon enacted to slow this transition, the state has converted over 500,000 acres from farmland to other uses since 1974.
Faced with international competition, increasing regulation, debt, land use pressure and a scarcity of young farmers, retirement-age farmers are in a bind. Many of them want their land to stay in agricultural production — but can’t afford to do so.
It’s possible to preserve the land for agriculture, but it takes careful planning — and help from professionals in the field.
The non-profit organization, Rogue Farm Corps, is tackling farm transition head-on. In an effort to help farmers prepare for land transfer, Rogue Farm Corps co-published a study with OSU and PSU in September 2016 which analyzes the issues surrounding farm transition and identifies recommendations for addressing systemic problems. They are also publishing farm transition resources in a central location to help farmers begin the journey.
Farm transition planning workshops are being scheduled around the state, and a collaborative effort, called the Oregon Agricultural Heritage Program, is underway to fund state policy that would concurrently address farm succession and farmland preservation, called It’s helpful and important work, but will it be enough?
As a new farmer myself, I come at these issues from a different angle. I didn’t inherit farmland. There is very little farmland available for lease, and the farms that are for sale are out of my price range. The notion of starting small and slowly scaling up is very difficult when non-contiguous parcels of land are involved. The 21-acre property I currently lease in Washington County is going on the market in January, and despite the fact that a great deal of farmland is indeed changing hands, I have not been able to find suitable land I can afford after a months-long search.
My farm is only two years old, and it may disappear before it ever has a chance to flourish. Just as Silicon Valley nourishes tech startups, so too does Oregon need to help new farms if they are to have a chance to succeed. Agriculture is no longer the most profitable short-term use of undeveloped land, but agricultural production is essential in the long term to Oregon’s food systems, statewide and rural economies, open spaces and habitat and sense of place.
If small farms are to continue to play their historic role in anchoring these values, it will take more than seasonal farmers markets to keep them alive. Will the agricultural land transition to new farmers or will it sprout houses instead? Unless there’s a concerted effort to keep our farmland in production, the market will reap houses from the economic seeds we have sown.