Farmers got paid to farm, but now……

Landowners who want to continue farming their land can sell their development easements. When landowners sell development easements, they still own their land but sell the rights to develop it for anything other than agriculture. Those deed restrictions remain in force for any future owners. Landowners can sell the development rights on their land to the SADC, County Agriculatural Development Boards, municipalities or nonprofit organizations. The sale price is based on the difference between what a developer would pay for the land and what it is worth for agriculture. Most farms have entered the Farmland Preservation Program through the sale of development rights.

http://www.nj.gov/agriculture/sadc/farmpreserve/

Through 2011 $1.5 billion has been paid to farmers to keep farming.  Now some have apparently changed their minds and want to develop their land.  Here’s an example of how this gets done in New Jersey:

The Willow Creek Winery sits on 34.5 acres in West Cape May.  On one of those acres there is the main house (taxes: $18,653.31).  Another half-acre has a multi-family building (taxes: $7,672.86).  The other 33 acres are the farm (taxes: $386.10) broken down as follows:

On June 6, 2007 the owners of Willow Creek Winery took the state up on their offer and accepted $890,000 (penultimate entry on page 8 of this list) not to develop their land with $534,000 coming from the state.  Next month they open their wedding business.

This issue was brought to the attention of two of the 79 aye votes and they responded:

From: Anthony M. Bucco
Sent: Monday, July 23, 2012 3:38 PM
RE: Why did A-323 pass with a 70-0 voice vote?

This bill was not passed by a voice vote. The vote was on 3/15 and was 79-0. It is a Republican bill: Dancer & McHose were prime sponsors, with the aim at promoting agri-tourism in the state.

The bill allows for:

Special occasion events to be conducted on preserved farmland. Included in this definition, is weddings, lifetime milestones or other special events, as determined by a county agricultural development board.

The bill requires that the income generated by the events cannot exceed 50% of the annual income of the preserved farmland. The event must advance the agricultural or horticultural output of the preserved farm and promote agricultural tourism. The event must occur on a Friday, Saturday, Sunday or federal or State holiday. In the event that it is held on another day of the week the State Agriculture Development Committee (SADC) must grant approval.

The SADC may give its approval authority to the county agriculture development board.

The measure provides for a civil penalty should the proceeds from events exceed 50% of the gross income.

The same type of events are allowed on non-preserved farms.

I hope this helps!!

Tony

***********************************

From: Carroll, Asm. D.O.
Sent: Monday, July 23, 2012 4:43 PM
RE: Why did A-323 pass with a 70-0 voice vote?

I read the objections, and respectfully disagree, which might tend to explain why the bill passed 79-0. It is an extremely limited measure. All of the income derived from “special events” cannot exceed 50% of the income from the underlying farm, cannot occur — absent special permission — except on Fridays, Saturdays, Sundays, or holidays, and the list of the sort of events proposed restricts same to farm-related undertakings.

Indeed, it strikes me as interesting that NJTA would take a position — belated thought it might be — as the effect upon the taxpayers would be de minimus.

But I abide your thoughts.

mpc

Requiring that at least 50% of the revenue come from farming activity?  What’s to keep this winery from booking weddings and charging $9,000 to rent the hall but $10,000 for a bottle of wine, which they would get from their own land and count it as farmland income?  It is a private business so what they charge is their own concern.  Other questions:

  1. Who is going to police this?
  2. Is 50% of the $534,000 being returned to taxpayers?
  3. How did this ever get out of committee?

If you paid taxes in New Jersey you would have a pretty good idea of the answers – and might understand why we need as much wine as we can get.

3 responses to this post.

  1. Posted by Tough Love on July 29, 2012 at 9:08 pm

    Quoting …”The measure provides for a civil penalty should the proceeds from events exceed 50% of the gross income.”

    The bill probably would have been OK if the proceeds could not exceed more than 50% of NET (not GROSS) IRS-reportable farm income. Expenses are fungible, and net income might be only 10% of Gross income, in which case 50% of Gross farm income would be 500% of net farm income …. certainly not a desired goal … as then it’s a catering hall, not a farm.

    Reply

  2. A contract is a contract. A deal is a deal. Violating part of the deal is still violating.

    You’re either in the farming business or catering & tourism business. Either give New Jersey taxpayers back our money or just farm the land. That makes enforcement clear.

    We are not talking about the proverbial local small farmer. We are talking about developers who buy multiple farms and turn them into wineries and catering halls. “Agricultural Tourism” is another word for commercial development.

    Overall, I support commercial development, but not where the development rights have been bought by the NJ taxpayers. If these non-agricultural development rights had been sold on the private market to a private company, rather than the NJ taxpayers, then the private company which had bought those rights would be suing the overalls off of the violating farm owners … and rightly so.

    This is a straight contract law issue. Don’t buy into one inch of the ‘poor farmers’ issue. in for an inch; in for a mile.

    To help farmers facing rising costs in an economy where they cannot pass them on in higher prices, start by granting farm tax rates to one single-residence on each farm. According to your numbers, that would save them $15,000+ per year.

    Reply

    • Posted by Tough Love on July 30, 2012 at 11:27 am

      Quoting …”A contract is a contract. A deal is a deal. ”

      This blog is usually about pensions issues, and in that venue, violating a contract can be both just and necessary ….. such as when our elected officials approve grossly excessive public sector pensions and benefits in exchange for Union campaign contributions and election support …. nothing but bribe giving and accepting under a legal umbrella.

      Reply

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