More than 370,000 acres of California’s irrigated farmland disappeared from 2006-10. Officials are concerned that hundreds of thousands of additional acres could be lost in the coming years, threatening California’s leading role in feeding the nation and indeed much of the world.

About 168,000 acres of irrigated land disappeared from 2008 to 2010 — 102,000 acres of it were prime agricultural land, according to John Lowrie, assistant director at the California Department of Conservation. Another 205,000 acres were lost from 2006 to 2008. More recent figures have yet to be released.

Ag lands disappear while urbanization slows

“The numbers suggest some significant shifts or trends in how our agriculture lands are being used,” Lowrie told the Assembly Agriculture Committee at a Nov. 6 informational hearing. “Although I have to tell you openly, I had to scratch my head a bit on what some of these statistics are telling us. Because I think they are not really typical of what we might expect to see.

“This is a surprising counterpoint: We were only able to map an increase in urbanized acres of about 44,500 acres [from 2008-10]. That’s the lowest ever recorded in any of our farmland updates.”

The next lowest two-year urbanization increase, 53,000 acres, occurred during a significant economic recession in the 1990s.

Lowrie is not sure of what became of the irrigated land that disappeared but did not get urbanized.

“How do we explain that? I don’t know that we’ve done a detailed analysis or statistical look at what we’re seeing,” he said. “Our suspicions are that land idling and long-term conversion of highly productive agriculture land to dry land grain production was the largest single reason for conversion out of irrigated uses.”

Fresno County lost 32,000 acres of irrigated land from 2008-10. Kern County lost 25,000 acres and Kings lost 17,000 acres; while San Joaquin, Sacramento and Tulare counties each lost more than 10,000 acres.

“We continue to detect significant losses of irrigated land in California, with prime farmland losses of particular interest,” said Lowrie. “In recent years it appears limited water availability is a major factor driving the loss of prime farmland, particularly in the southern San Joaquin Valley. The lack of urban development, detected in the latest cycle, tracks with the downturn in the economy experienced during that time. We would anticipate that that is a temporary phenomenon.”

An uptick in urbanization could, of course, result in further loss of farmland. That concerns committee Chairwoman Susan Eggman, D-Stockton.

“The preservation of farmland is important to us,” she said. “Over the years we’ve lost a lot of farmland. If we keep going at the rate we are, by 2050 we’ll lose another two million acres of farmland.”

Williamson Act funding cut

A recurring theme in the two-hour hearing was the need to restore funding for The California Land Conservation Act of 1965, commonly known as the Williamson Act. It lowers property taxes on farmland and open space in exchange for keeping the property in agriculture or open space for 10 years.

In 1972 the state launched the Open Space Subvention Act, which partially reimbursed counties for their lost property tax revenue. Averaging $23.3 million per year, it paid out more than $863 million from 1972 to 2009. Currently about 16.4 million acres in 53 counties are under Williamson Act contracts.

Due to the state budget crisis, the subvention budget was slashed to $1,000, forcing counties to absorb the costs for the past four years. Subvention funding has yet to be restored. Although lack of funding did not cause the disappearance of farmland in recent years, according to Lowrie, restoring the subvention payments was a concern of many of the farmland experts at the hearing.

John Gamper, taxation and land use director for the California Farm Bureau, called the elimination of the funding “perhaps the greatest new pressure on farmland conversion …. The Williamson Act came about because the Santa Clara Valley was paved over, the Los Angeles Basin was paved over. The [county] assessor was essentially the county planner because he used ‘highest and best use’ determination. And everybody said, ‘That’s all right, there’s another valley on the other side of the hills.’ Well, there isn’t another valley on the other side of the hills with the San Joaquin Valley.”

Imperial County has pulled out of the Williamson Act program, and Colusa and Glenn Counties were seriously considering pulling out as well, according to Gamper. They’ve been hard hit by the loss of subvention funding, which once provided 22 percent of Colusa County’s General Fund budget, 15 percent of Kings County’s budget and 12 percent of Glenn County’s.

“With realignment and other burdens put on counties, I frankly think it’s amazing that more counties have not pulled out,” Gamper said.

LAO opposed Williamson funding

The Williamson Act funding is not without its critics, however, including the Legislative Analyst’s Office. Nine years ago the LAO recommended phasing out the subvention payments over 10 years. The LAO listed several reasons:

Fiscalization of land use

Another major contributor to the disappearance of farmland is the fiscalization of land use decision-making, according to John Beckman, CEO of the Building Industry Association of the Greater Valley. The term refers to the temptation of cash-hungry cities and counties to pave over farmland with shopping malls and car dealerships in order to increase sales tax revenue.

Beckman described the dilemma:

“They have a project come in front of them. And for true conservation, true farmland mitigation, for protection of farmland to occur, the local agencies need to deny those projects. But due to the fiscalization of land use, they don’t. When they have the opportunity, they say yes to new development, and they say no to farmland protection.

“A lot of the local jurisdictions have decided that they want to try to do farmland mitigation, but they want their project at the same time. They’ve come up with this myth that they can have their cake and eat it too. They want to say yes to the project and create some kind of mythical preservation of farmland by requiring an easement some place else.”

That’s a myth, Beckman said, because current land use policies allow mitigation of farmland by protecting open space elsewhere.

“[They] do not mitigate the loss of farmland,” he said. “In fact, typical agricultural easements do not even preserve farming. The easement programs that we have in place today merely protect dirt. That’s a common saying among farmers that I talk to. We need more policies that protect farming and farming families, and less policies protecting dirt.”

An example of this occurred in 2005 when Colusa County sued the California Wildlife Conservation board to stop it from using a conservation easement to convert 235 acres of farmland under Williamson Act contract into wetlands, ponds and open space. The county won the suit, but the state is still dragging its feet on compliance, according to Colusa County Supervisor Kim Vann.

“So the state even has its own issues to address in taking ag lands out of production,” she said. “This is not due to our local land use decisions. This is due to state and federal agencies acquiring farmland in our counties to take out of production. The most valuable habitat ground in our counties is our prime farmland as well.”

Converting crops into solar panels

Another contributor to farmland disappearance is the solar industry. Between 35,000 and 40,000 acres are planned for solar development in the San Joaquin Valley, including southern San Joaquin, Fresno, Kern and Kings counties, according to Lowrie. Imperial County officials are also considering going solar after their water supply was cut back, said Assemblyman Brian Dahle, R-Bieber.

That could be the tip of the solar iceberg, given the state’s environmental politics, warned Gamper.

“Surprisingly, there are zealous advocates for utility scale photo-voltaic solar development in both the current and previous administrations [of Gov. Arnold Schwarzenegger and Gov. Jerry Brown] that argue that local jurisdictions need to immediately sacrifice 100,000 acres of prime farmland for solar photo-voltaic development, and another million acres by 2050,” he said. “That’s 12-½ percent of our remaining resource to be put under solar panels. Frankly, I think it’s an absolutely insane idea.”

Chairman Eggman, who comes from a farming family, ended the hearing on a positive note, while acknowledging that the problem is as difficult to solve as the homeless issues she used to work on.

“Farmers have done better than they’ve ever done before,” she said. “Some things are going right for the farming community. We’ve heard a rich exchange of ideas. The solution is not as easy as we’d all like to think it might be.”

By DAVE ROBERTS

There is much wailing and gnashing of teeth over Gov. Jerry Brown’s proposed budget cuts, but the outcry over elimination of state subsidies for millionaire landowners may be overkill. Brown has zeroed out funding for the Williamson Act, which this year is providing $10 million (and recently was providing $39 million) to farmers, ranchers and speculative landowners to keep their land in farms, ranches and open space.

The media, naturally, have gone into Chicken Little mode. Articles in the Sacramento Bee and Contra Costa Times are filled with doom and gloom from a coalition of environmentalists, landowners and county officials. They predict that ending the subsidies will lead to urban sprawl, layoffs of sheriffs’ deputies, reduced “food security,” increased greenhouse gases, loss of habitat, diminished air and water quality, increased noise pollution and rural devastation.

If some struggling, family farmers bordering suburban areas don’t receive property tax reductions of anywhere from 20 to 75 percent, it is inevitable that they will be more likely to give way to development pressure. But the benefits of funding the Williamson Act may be minimal for California as a whole, government regulation of land use may have done more harm than good and, in any case, the state is broke.

Seven years ago the Legislative Analyst’s Office recommended phasing out the Williamson Act, which is formally known as the California Land Conservation Act of 1965. The LAO listed several reasons:

• The state exercises no control over the lands under contract, and can’t ensure that they are actually at risk of development. “As a consequence, it is likely that some lands under contract would not be developed even absent the Williamson Act subventions. As a result, a portion of the tax reduction may result in no behavioral change by the landowner at all.”

• If development pressure does occur, the landowner can simply cancel or not renew the 10-year contract. “As a consequence, the program may not result in permanent changes to land use patterns but simply delay for a relatively short period of time the development of open space and agriculture lands.”

• The costs are substantial. In addition to the nearly $40 million hit to the cash-strapped general fund to reimburse counties and cities for lost property tax revenue, the state must also compensate for reduced educational funding because lower land values reduce the property taxes flowing to schools. As a result, if the Williamson Act is fully funded, the total cost to the state is more than $80 million annually. “Given that the open space subvention represents only a portion of the local property tax loss, it is possible that total costs to the state (subventions plus increased education funding) are substantially higher — although no statewide figures are available.”

The LAO report concludes:

Given the state’s current budget situation and the issues associated with the Williamson Act program identified above, we do not believe an expenditure of almost $40 million for local subventions is an effective use of funds. While the state clearly has an important role to play in open space preservation, we recommend that the Legislature explore more efficient and permanent solutions to the issues related to open space and development pressures. In addition, we believe there are alternative means for open space preservation at the local level — including the direct purchase of land most at risk of development and the adoption of suitable regulatory and zoning policies.

Keeping the Williamson Act

If the Williamson Act remains in effect, the state should take more control over it (rather than simply reimbursing counties and cities) and tighten the eligibility rules to “help assure that only those properties genuinely at risk of development are allowed to participate in the program,” the LAO added. It recommended phasing out the program over 10 years, saving nearly $4 million per year in addition to $700,000 in administrative costs to the Department of Conservation.

Not content to wait 10 years, Gov. Schwarzenegger blue-penciled the whole program in 2009, reducing total expenditures to just $1,000. But last year he signed a compromise bill, SB863, which restored $10 million in funding by shortening the contracts to nine years and assessing the lands at slightly higher values.

Now in 2011, once again the program has been zeroed out, this time by Brown. “The program will thus be a local program,” states Brown’s budget summary. “Funding provided from the redevelopment agencies tax shift could help counties continue this program on their own.”

But it’s debatable whether the program should continue. Dr. Thomas Sowell, author of the new book “The Housing Boom and Bust,” argues that land use regulations like the Williamson Act artificially drove up housing prices, leading to the real estate crash and contributing to the Great Recession.

“In some areas, including California — coastal California — people were paying half their family income to put a roof over their head,” Sowell said in an interview with Reason Magazine. “That in turn was a result of local political people putting all sorts of restrictions on building.”

In an interview with the Hoover Institution, he said:

Although the housing boom and bust has national repercussions, its origins are concentrated in particular places. Only a very small part of the U.S. generated the delinquencies, foreclosures. The origins were in these extremely expensive areas where the prices had been forced up artificially. Because, despite the abundance of land in California, laws prevented people from building on much of that land made it prohibitively expensive on the rest of the land, so that the housing prices were shot up primarily because the land on which the houses were built was prohibitively expensive.

In a National Review article, Sowell stated:

Study after study has shown that housing prices are highest where government restrictions on building are the most severe. That is the ugly result of pretty words like “open space.” The same severe government restrictions on building that drive home prices sky high also lead to vast areas with nothing but trees and bushes. Where it doesn’t rain for months, that’s dangerous. No matter how much open space there is, it is never enough for environmental extremists, who will make political trouble if anyone is allowed to break up those miles and miles of solid vegetation with buildings, even though pavement and masonry don’t burn. In other words, government preserves all the conditions for wildfires and subsidizes people who live in their path.

The use of the Williamson Act to restrict development is cited as one of its strengths by supporters.

“Our biggest concern is that we are right in the Silicon Valley and have significant pressure for development because we have lower land prices,” Susan Thompson, administrative officer for San Benito County, told the Senate Local Government Committee last March. She added:

We house a lot of those neighboring counties’ workers, law enforcement, teachers. We have huge pressure. Last year we spent months and months on a 6,800-unit development for housing. That would have been 20,000 new people, and our total population is only 160,000. That development has been withdrawn. Another proposed development is 1,100 units adjacent to agricultural production land. If we don’t have this [Williamson Act] tool, we will have a real tough time with land use policy going forward.

Kern County Planning Director Ted James, who represents California’s county planning directors, said the Williamson Act…

[H]as been beneficial in my ability to prevent leapfrog development, prevent people from coming in who want to develop their land. We discourage people because it’s surrounded by Williamson Act property. We do that on a daily basis. The effectiveness of the program is our ability to discourage people from going through the process. The Williamson Act’s purpose is to preserve farmland. It’s also to discourage premature development and provide orderly development.

Although the state may no longer be providing payments to counties to cover their lost property tax revenue, there is nothing to prevent them from continuing to reduce property taxes in exchange for landowners not developing. But, like state officials, county officials are pleading poverty. They warn that without the state subsidy they would have to cut other services, such as law enforcement officers.