Finding Tennant for Farmland
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The farming populations is aging rapidly and the number of younger farmers that may replace these aging farmer is extremely low. According to the USDA 2017 Ag Census, there are only 7% of farmers 35 or less years of age and roughly 35% are above the age of 65 within Carteret and Craven Counties. As older farmer reduce size or retire, some farmland may not be tended. There simply is not anyone within the area willing to farm the land.
Some of the primary reasons other farmers don’t assumes production of this farmland are that 1) the land may be marginal in terms of production compared to other farmland; 2) the land is too far to travel; 3) the farmer cannot obtain financing to expand; or 4) the farmer simply has met limits to size of production based upon current equipment and/or labor. As such, it is common to see these farmlands idle. Not only does this impact agricultural production for the region, it also impacts landowners.
Landowners obvious loss is rental income. However, those with land enrolled in the Present Use Value taxation (PUV) may be at risk. Currently, land used for agricultural production has reduced taxation but this assumes that agricultural production occurs on the land. If land is not tended within 3 years, the taxable rate resumes to commercial value and will dramatically increase.
There is very limited resources for landowners seeking new tenants. No government agency or industry has a listing that could be used to alert farmers of available land from a landowner or vice versa. Thus, NC Extension has created a website, NC Farm Link, that serves as a database across the state to include this type of information.
To utilize the page, simply enter the desired information and select whether you are a farmer seeking land or a landowner seeking a farmer to tend the land. (Additional topics available include succession planning, business planning, conservation programs, lease agreements, legal services, potential employees and more!). Currently, the number of landowners with listing within Eastern NC is limited. With time, this will change.
The other options to find a potential farmer to lease land, should landowners not be interested in this tool, is to 1) communicate with the last tenant and ask for a recommendation; 2) place ads in local media seeking bids to lease the land; 3) tend it yourself; or 4) accept that it will not be tended and seek some commercial use.
Agricultural Production & Trends
Another impact of aging farmers is that as these farmers tend to be larger in size tending field crops primarily. As they retire or downsize, the smaller farmland of 50 acres or less is often assumed by beginning farmers with other income sources. Currently, within Carteret and Craven, small farm production is one of the fastest areas of growth. These farms are producing, vegetables, fruits, or some specialty market items. While this may be ideal for consumers wishing to revert from large scale production to local food production, it also creates challenges for those producing. Simply put, these producers are often competing with one another for sales of the same product to the same market. Over-production and inability to market to consumers is an issue. NC State offers the Visit NC Farm application that can be used to advertise an existing production or for consumers seeking local food production.
Another issue arising from local large-scale producer retirement or downsizing is that farmers from neighboring counties often will indeed travel across county lines to lease larger farm tracts or farms with more highly productive soil. As such, land continues to be farmed but the tenant is no longer a neighboring farmer. While this is beneficial to the land owner and farmer, communication may become an issue since simply dropping by to visit may no longer be an option.
As more and more farm tracts are left untended by farmers, these tracts become ideally suited for other use. Many become new subdivision yet other larger tracts become industry. Growth is good for the economy but the development of farmland near existing farming operations make it more difficult for the farmer to plan and manage crops. Too, it almost always means that the land will never again be farmland.
Future Tax Rate Increase? Something to Examine
Since agriculture is promoted as North Carolina’s largest industries with over $1 billion in sales, this impacts the economy in more ways that may be obvious. Numerous studies show that government budget for services for developed lands often exceed the actual amount collected in taxes. In contrast, taxes on farmland exceed the amount of services required. As such, farmland aids governing entities to “balance the budget” so to speak. As example, a 2014 cost of service study in Craven County shows that for each $1 of revenue received from residential properties, Craven County spent $1.10 providing services. In contrast, for each $1 received from farmland, Craven County spent $0.20. The deficit created by residential services is offset by farmland revenue.
Refer to additional data regarding services and taxation at Craven County Cost of Community Service Study,