Study examines farms' vitality

A new study suggests that building massive homes on agricultural lands reduces the property's economic vitality.

The study provides ammunition to county planning officials, who want to discourage wealthy landowners from building mansions, rather than farms, on agricultural lands.

"Those who can afford to buy this property are folks with an outside income, and the purchase of that property is more about aesthetics and a desire to share this culture than it is an interest in viable agriculture," Community Development Director Alex Hinds said.

Hinds and other officials have proposed an update to the Marin Countywide Plan that would restrict housing on agricultural property to 2,500 square feet or less.

But members of the Planning Commission have challenged the new study's conclusions, suggesting that the 2003 analysis does not consistently reflect current economic realities.

Consultant David Strong presented the study to the Planning Commission at their meeting Monday.

Strong's report suggests that large agricultural parcels with large homes tend to produce less, in terms of farm-related income, than large parcels with smaller homes. In addition, their presence tends to drive up the price of other agricultural lands. He concludes that limits on housing size could improve the economic viability of agricultural property.

"If someone wants to build a large house, it's not certain that their interest in agriculture is sincere," said Strong, an Oakland-based consultant.

Because the value of Marin's agricultural land has skyrocketed in recent years, however - while the value of farm products has remained the same or fallen - planning commissioners asked whether any agricultural property could really be considered economically viable.

"Even if you didn't build a house on the property, the land value would be more than any agricultural operation could justify," Commissioner Don Dickenson said.

Strong argued that using land for agriculture lowers its taxable value, making farming operations at least marginally profitable.

The idea of tiny profit margins on county farms worried Commissioner Hank Barner, however.

Barner cited a University of California Cooperative Extension study that said 63 percent of Marin farmers report their operations are "marginally" or "not" profitable.

"When only a small percent of our farmers are turning a profit, we have a problem," Barner said.

Strong countered that Marin's farmers are land-rich, even if many are cash-poor.

"Their day-to-day expenses are like a checking account," Strong said. "But they know they're sitting on one hell of a savings account. It's like having stocks."

Barner was not impressed.

"You can't eat stocks, and you can't eat land appreciation," Barner said. "The general feeling of the testimony I've heard in this room since the '80s is that the agricultural producers of this county are not awash in profit. That's bothersome to me."

Dickenson noted that landowners who build homes on their property pay higher taxes, helping to support county agricultural programs.

Those landowners are also required by law to fulfill other conditions of use, such as allowing other farmers to graze or till their property at reduced rental rates, Dickenson said. The requirements allow farmers who could never afford to buy or even rent agricultural land in Marin the opportunity to stay in business, he said.

"In effect, non-agricultural development helps to subsidize agricultural use," Dickenson said. "That's not reflected in this study."

Other efforts to improve the economics of Marin's farmers and ranchers were achieving mixed results, Strong reported.

While the county had convinced many of its farmers and ranchers to run organic operations - exceeding its own goals by 1,500 percent, Hinds said - the economic advantages those farmers received were being undercut by the decision of large corporate farms to "go organic" themselves.

"We can remember a time when Marin's organic growers sold to Whole Foods Market," Strong said. "As most of you know, those times are gone, now that corporate agriculture has dedicated large parcels to organic farming."

But the county's organic farms and ranches were still more profitable than traditional growers, Strong said, because Marin residents were willing to pay for locally grown, high quality farm products.

And while the "value added" operations - like cheese-processing plants - encouraged by the county could make farms more profitable, they also require more labor, Strong said.

"A dairy operation with 200 cows might take 12 people to run," Strong said. "A 200-head cow-and-calf operation could be run with one guy or girl."

Despite their economic difficulties, development director Hinds noted that few Marin farmers had expressed any desire to sell or abandon their operations.

"The real tricky part comes during the period of intergenerational transfer," Hinds said. "That's when property could go for sale to people outside the agricultural tradition, since no one within that tradition could easily afford to purchase it. And that's when we come in, trying to understand what protections need to take place."

Those kinds of protections could help to preserve Marin agriculture for another generation, said Bob Berner, executive director of the Marin Agricultural Land Trust.

"Obviously, we cannot determine the viability of agriculture. It's beyond our power or ability," Berner said. "What we can do is to ask whether agricultural land use deserves to be here. If the answer is yes, we can put into place policies that preserve and protect agriculture through incentives and disincentives."

Contact Rob Rogers via e-mail at rrogers@marinij.com