by Tony Gray

WHITEHALL, NY --- A local farmer is about to see money sprout from the fields his cows now graze upon, thanks to a state program designed to conserve farmland from future development.

Washington County Agriculture Committee members were briefed about it last month by Chris Krahling, a Senior Project Manager for Agriculture Stewardship Association, a non-profit land conservancy group based in Greenwich, NY. "A dairy farmer in Whitehall was notified they are eligible to get Award #1," Krahling told them, referring to a New York State Farmland Protection Implementation Program grant.

County Agriculture Committee Chair Cassie Fedler noted the grant probably won't be awarded right away, saying the whole process may take years to complete.

"You sell your development rights and then it becomes forever agricultural land that can't be developed," Fedler said, adding Dairy Transition grants are for farms in transition, whether by diversifying the business or passing it to the next generation, or selling to new owners.

New York State Department of Agriculture award status documentation indicates the grant amount to be $399,828 along with other grant details but the farmer's identity is being withheld for now.

"We have one project located in Whitehall that is in the application process and has been deemed to be eligible for an award," said ASA Communications and Outreach Manager Katie Jilek. "However, since it has not been awarded funding ASA's policy is to keep that information confidential. If the project is selected by the State for funding, we will make the announcement public."

Jilek knows first-hand about conserving farmland because she grew up on a Washington County farm that ASA helped conserve. She had never heard of them before that. "My family has had a dairy farm for 10 generations," she said. "My dad is the last farmer because none of my generation farms. It just means it will always be farmland." 

Seeing how the grant helped her family prompted her to apply for a job with ASA. "I think understanding why someone would make the decision to conserve their farm is important," Jilek explained about working with a group that has conserved almost 25,000 acres of upstate New York land.

The only other Rural Development Grant secured by ASA in Whitehall was a 96-acre property on County Route #18 at the Hampton town border, in 2000, for the Romano Family Trust.

Farmers interested in trading future development rights for some cash in hand meet with an ASA member to talk about their farm. The non-profit's steering committee ranks projects based on viability because the state sometimes limits how many applications they will accept in a given year. "The State may say, for instance, you can apply for eight," Jilek explained. "The committee has prioritized them so then they apply; the state reviews them and then makes their announcement." Farmers don't get any money until the project closes, which could take up to two years, according to Jilek. "So, for the farmer this isn't a quick fix where they get the money right now," she said. "It's something they have to plan for."

Most purchased easements are funded through the state's Farmland Protection Implementation Program, administered by the Department of Agriculture and Markets.

"The grant provides 75 percent of the cost to purchase the development rights plus project-related expenses, such as survey, title report, appraisal, staff time and recording fees," Krahling said, adding the remaining 25 percent must come from a local match. "ASA will attempt to secure funding for the match, either from our own reserves or from a federal grant but if the local match cannot be organized, the landowner must be willing to do a bargain sale to make up the difference."

A bargain sale means the landowner agrees to receive less than fair market value. Farmers have sold the development rights in bargain sales, probably because of tax benefits that attach.

"A federal income tax credit for the amount below fair market value is given to the farmer who received the easement and is good for the current year plus 15 years, and is based on adjusted gross income," Krahling said, adding the tax break could be averaged over the 16 years or used to offset an exceptionally lucrative year.

New York State's tax credit is tied to the land so there is no expiration date, according to Krahling who noted the state will credit back 25 percent of what the farmer pays in taxes to their village, town, school and county every year. "It will ride with the land forever," said Krahling. "Because they still pay their tax bills, the money's not coming out of the town or school so they still get their full money."