[Senate Hearing 106-947]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 106-947

                      FARMLAND PROTECTION PROGRAM

=======================================================================

                                HEARING

                               before the

                       SUBCOMMITTEE ON FORESTRY,
                CONSERVATION, AND RURAL REVITALIZATION,
                                 OF THE
                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY
                          UNITED STATES SENATE


                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                                   ON

                      FARMLAND PROTECTION PROGRAM

                               __________

                           SEPTEMBER 18, 2000

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry



                    U.S. GOVERNMENT PRINTING OFFICE
71-375                     WASHINGTON : 2001

_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402


           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                  RICHARD G. LUGAR, Indiana, Chairman

JESSE HELMS, North Carolina          TOM HARKIN, Iowa
THAD COCHRAN, Mississippi            PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky            KENT CONRAD, North Dakota
PAT ROBERTS, Kansas                  THOMAS A. DASCHLE, South Dakota
PETER G. FITZGERALD, Illinois        MAX BAUCUS, Montana
CHARLES E. GRASSLEY, Iowa            J. ROBERT KERREY, Nebraska
LARRY E. CRAIG, Idaho                TIM JOHNSON, South Dakota
RICK SANTORUM, Pennsylvania          BLANCHE L. LINCOLN, Arkansas
GORDON SMITH, Oregon                 ZELL MILLIER, Georgia

                       Keith Luse, Staff Director

                    David L. Johnson, Chief Counsel

                      Robert E. Sturm, Chief Clerk

            Mark Halverson, Staff Director for the Minority

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing:

Monday, September 18, 2000, Farmland Protection Program..........     1

Appendix:
Monday, September 18, 2000.......................................    39

                              ----------                              

                       Monday, September 18, 2000
                    STATEMENTS PRESENTED BY SENATORS

Craig, Hon. Larry E., a U.S. Senator from Idaho, Chairman, 
  Subcommittee on Forestry, Conservation, and Rural 
  Revitalization, of the Committee on Agriculture, Nutrition, and 
  Forestry.......................................................     1
Santorum, Rick, a U.S. Senator from Pennsylvania, Ranking Member, 
  Subcommittee on Forestry, Conservation, and Rural 
  Revitalization, of the Committee on Agriculture, Nutrition, and 
  Forestry.......................................................     3
                              ----------                              

                               WITNESSES
                                PANEL I

Keene, John C., Professor, Department of City and Regional 
  Planning, University of Pennsylvania, Philadelphia, PA.........     9
Heinricht, Mary, Regional Director for the Mid-Atlantic American 
  Farmland Trust, Culpeper, VA...................................     7
Sells, Danny, Associate Chief, Natural Resources Conservation 
  Service, U.S. Department of Agriculture, Washington, DC........     5

                                PANEL II

Beam, Omar, Recipient, Farmland Protection Program, Elverson, PA.    28
Bowland, Marion, Executive Director, Pennsylvania Farmlink, 
  Manheim, PA....................................................    30
Bushnell, Bill, Legislative Assistant to Representative Raymond 
  Bunt, Jr., 147th District, Montgomery County, House of 
  Representatives Commonwealth of Pennsylvania...................    25
Matthews, Hon. James R., Commissioner, County of Montgomery, PA., 
  Norristown, PA.................................................    23
Oertly, Janet L., Pennsylvania State Conservationist, Natural 
  Resources Conservation Service, U.S. Department of Agriculture, 
  Philadelphia, PA...............................................    26
                              ----------                              

                                APPENDIX

Prepared Statements:
    Bowlan, Marion...............................................    58
    Bunt, Raymond L..............................................    51
    Heinricht, Mary..............................................    45
    Keene, John C................................................    48
    Oertly, Janet L..............................................    53
    Sells, Danny.................................................    40

 
                      FARMLAND PROTECTION PROGRAM

                              ----------                              


                       MONDAY, SEPTEMBER 18, 2000

                                       U.S. Senate,
         Subcommittee on Forestry, Conservation, and Rural 
Revitalization, of the Committee on Agriculture, Nutrition, 
                                              and Forestry,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:00 a.m., at 
the Montgomery County Human Services Center, 1430 DeKalb 
Street, Norristown, Pennsylvania, Hon. Larry E. Craig, 
(Chairman of the Subcommittee,) presiding.
    Present or submitting a statement: Senators Craig and 
Santorum.

 OPENING STATEMENT OF HON. LARRY E. CRAIG, A U.S. SENATOR FROM 
 IDAHO, CHAIRMAN, SUBCOMMITTEE ON FORESTRY, CONSERVATION, AND 
    RURAL REVITALIZATION, OF THE COMMITTEE ON AGRICULTURE, 
                    NUTRITION, AND FORESTRY

    The Chairman. Good morning, everyone. The Subcommittee on 
Forestry, Conservation and Rural Revitalization of the full 
Committee on Agriculture, Nutrition and Forestry will convene 
this field hearing on farmland protection and the program 
around it. Let me tell you it is a pleasure to be here in the 
Commonwealth of Pennsylvania this morning holding this hearing. 
I say so not because this is a beautiful morning and this is a 
beautiful spot. The hearings I have been holding over the last 
week-and-a-half or two have been not about preservation, but 
about destruction and what we do in the wake of destruction. I 
am talking about the tragic fires that we have had throughout 
the west and the public land forests of our country this 
summer.
    I chair another forestry committee on another committee, 
full committee, so we are wrestling with that. So it is a 
pleasure to be here and especially to be with my colleague, 
Senator Rick Santorum and his staff, and let me thank them for 
assisting our subcommittee in preparing this hearing. I think 
all of us are increasingly recognizing the importance of 
farmland protection and the program that was created in 1980. I 
am from the State of Idaho and out there it has been of less 
importance, but clearly today, with the urbanization in our key 
agricultural areas, it grows ever-increasingly more attractive 
to our State.
    We created the program in 1980, requiring Federal agencies 
to take a hard look at the problem. A decade later, the 1990 
Farms and Future Act allowed Federal demonstration projects to 
give States guaranteed loans and subsidized interest to start 
to protect farmland. But, funding under this law was somewhat 
intermittent. Then the 1996 Farm Bill provided $35 million for 
a farmland easement acquisition program, and the program's 
popularity has been such that all of those funds were depleted 
by 1998, which brings us to today.
    The Subcommittee wants to recognize the effort that Senator 
Santorum has directed with the Senate and has clearly become 
one of the Senate's champions for farmland protection. Senator 
Santorum has produced legislation, S. 598, which would provide 
$50 million annually for farmland conservation easements. 
Moreover, S. 598 contains a mechanism to extend farmland 
conservation processes to all of the States. Recently, Senator 
Santorum worked very hard with myself and other Senators to 
craft an emergency agricultural funding package, and he was 
successful in getting an additional $10 million in additional 
Federal monies into the Farmland Protection Program.
    As I had mentioned, we had run out of funds and Rick was 
able to get the Senate and the Congress to replenish that, as 
we are working to accomplish now. Certainly, the Subcommittee 
would encourage, I think, Rick to detail the efforts that he 
has put forth. They are important for the record. In that 
regard, I am confident that we can build an excellent record 
this morning, and that is what we are about, not only to 
strengthen the record, but to gain witness from Federal, State, 
and local officials, academia and local farmers, so that the 
Subcommittee can have a much fuller record as we head into next 
year and the reauthorization of the farm bill. And this issue, 
I think, will certainly be part of that overall discussion and 
consideration.
    Just a couple of housekeeping matters before I turn to 
Senator Santorum as we open the Committee with his and my 
remarks. We have asked our witnesses to stay to 5-minutes. 
Their full testimony will be a part of the record. If anyone 
who attends this hearing would wish to make comment following 
the official witnesses, we will ask them to come forward, to 
state their name for the record, and we would give them 2-
minutes to the microphone. Now, the reason we are doing this is 
I have to catch a train back to Washington and get back to the 
city for leadership meetings this afternoon. But I think we 
have got ample time this morning to deal with this issue and to 
build the record.
    So, once again, let me thank all who are in attendance and 
certainly those on our witness list who traveled up out of 
Washington for this hearing. Before we hear our witnesses, let 
me turn to the Senator from the State Pennsylvania who has been 
a champion of farmland preservation, Senator Rick Santorum.
    Rick.

     STATEMENT OF HON. RICK SANTORUM, A U.S. SENATOR FROM 
    PENNSYLVANIA, RANKING MEMBER, SUBCOMMITTEE ON FORESTRY, 
  CONSERVATION AND RURAL REVITALIZATION, OF THE COMMITTEE ON 
              AGRICULTURE, NUTRITION, AND FORESTRY

    Senator Santorum. Thank you, Mr. Chairman, and let me thank 
you, Larry, for getting up early this morning and taking the 
seven o'clock Metroliner up with me this morning from 
Washington to be here, and thank you for holding this hearing. 
Larry is not only the Chairman of this subcommittee, but he is 
also a member of the Republican leadership. He is the Chairman 
of our policy committee and he works on developing policy for 
the Republican caucus and has done a great job in that capacity 
and has really been a fine leader in Washington, DC.. So, it is 
an honor to have you here with us this morning to talk about an 
issue that is very, very important, not just to Montgomery 
County, but to all of Southeastern Pennsylvania, in particular, 
because of the incredible growth pressure that is being seen in 
our collar counties here around the city of Philadelphia and, 
even more so now, some of the counties outside of those 
counties, talking about Lancaster County, Berks County, Lehigh 
County, Northampton County. Those counties are experiencing 
rapid rates of growth, also and this sprawl that is occurring 
in all of those counties, many of which are just incredibly 
prime agricultural lands, the upper end of Montgomery County, 
another area which is just incredibly good and strong 
agricultural territory, is under tremendous development 
pressure.
    Having resources directed from the Federal Government, I 
think, sends the right signal to support the efforts of the 
counties here in this region of the State, and obviously the 
State. Governor Ridge, to his credit, his program, Growing 
Greener, I think it is called, which is a major commitment--I 
think a special appropriation of close to $50 million was put 
forward just for this particular concern that the people of 
this area have. In some counties here in southeastern 
Pennsylvania, we have even had referendums on the ballot that 
have appropriated money from the local level to help match 
State and Federal funds to secure more open space and farmland.
    So, it is a very important issue. It is a farm preservation 
issue. It is a preservation of our agricultural economy, which 
is crucial to many communities here in southeastern 
Pennsylvania, and it also goes to the quality of life, that 
people move to the suburbs for a reason. They want to enjoy a 
higher quality of life, and part of that is the open space and 
the green space and the farmlands. So, so this is an important 
topic for our area and it is one that I have worked on. And, 
Larry, I appreciate your fine words on the work we have done in 
Washington. I worked on the 1996 Farm Bill to create the 
farmland preservation program, which is the first money that 
was actually dedicated just for preserving farmland, $35 
million, of which Pennsylvania has received roughly 10-percent 
of that money, which obviously shows the well-advanced state of 
affairs that we have here in Pennsylvania, attracting that 
money from the Federal level.
    Interestingly enough, my co-sponsor on that amendment to 
the farm bill was Senator Barbara Boxer, so that would just 
tell you that, that was a very bipartisan amendment and one 
that has support on both coasts and recognizes the development 
pressure in our larger, more urbanized States. So, we have 
continued with that, as Senator Craig mentioned, in our 
emergency funding bill. We were able to get--excuse me--the 
crop insurance bill, I guess it was, and the emergency bill. 
The crop insurance bill is where we got the $10 million in 
authorization. So, we hope to get appropriation funding for 
that $10 million and move this program forward.
    We have an additional bill of $50 million that we have 
offered, per year, to try to create more Federal incentives for 
this in, again, in these particularly crucial farm areas. If 
you go to the upper end of this county, if you go to certain 
areas in Bucks County, if you go to Lancaster County, you have 
got some of the most productive farmland anywhere, and it is 
not just, you know, 30-acres out back that some people think of 
eastern farming. This is major production agriculture and it is 
very important agricultural land, and it is very important to 
have this kind of production, which is accessible to the 
eastern seaboard and provides really quality agricultural 
products.
    So, this is not just preserving a little, nice-looking 
dairy farm with 30-acres that looks nice for tourism. This is 
about providing food for this region and providing quality food 
and fresh food for this region of the State. So, with that, I 
want to thank you, Mr. Chairman, and we thank Mr. Jim Matthews, 
who is here representing the county commissioners, for making 
this space available to us, and we will be hearing from the 
commissioner in a little bit. I appreciate your time and your 
willingness to be here with us today.
    Thank you.
    The Chairman. Rick, thank you very much. Those of us who 
are privileged to serve our States and help shape public policy 
in Washington, both Rick and I serving on the Agriculture 
Committee, we remain very frustrated about the current farm and 
agricultural situation from the standpoint of profitability and 
all the forces that a production agricultural unit has to deal 
with, whether it is encroachment or whether it is higher taxes 
as a result of re-zoning because of urbanization around or near 
it or the sheer profitability of the product that is produced. 
And, as this country struggles with farm policy, I say this 
kind of as an addendum, because we as a country are clearly 
struggling at this moment to decide where our public policy 
will be as it relates to production agriculture.
    I say that from the standpoint of a historic role that 
public policy has played versus a free market force that runs 
through most of us who view agriculture, as we should, as a 
competitive business. At the same time, I was taught a lesson 
this year, Rick. We in the Congress had shaped a caucus to work 
with the administration on establishing policy to go to the WTO 
plenary session in Seattle, and that is a bipartisan group, 
Democrat, Republican, House and Senate, about 30 of us that 
gathered on more than one occasion, working with the Secretary 
and working with our trade ambassador, but Pascal Lamay, who is 
the French Minister to the European Union, happened to be in 
town.
    We asked him to come and speak to the caucus and it was 
well-attended. He is a very intelligent, outspoken man, speaks 
very good English with a slight French accent, so he threw us 
all off a bit by being able to speak such fluent English. And 
we began to quiz him about the agricultural policies of Europe 
and the heavy level of subsidizing that goes on there, directly 
to the producer, and that is how they offset issues of 
encroachment, that is how they offset issues of profitability. 
That all becomes a part of how we deal with the issues with the 
European Union and the WTO and the efforts coming out of the 
Uruguay Round on GATT.
    Anyway, after we had worked him over pretty hard with a 
bunch of questions, he just kind of looked us directly in the 
eye with a twinkle and said: Now, wait a moment. You have got 
to understand we in Europe have made a decision. We do not plan 
to move from it. And our decision is we will preserve the 
pastoral setting of our landscapes. That's what Europeans want. 
That is what we like and that is what we are going to keep. And 
we have established policy across England, France, Germany, 
Holland, Luxembourg and other places that will maintain that.
    And he says: You have got to understand that, that is our 
policy; that is not your policy. We do not plan to change. Now, 
we can talk about subsidizing a product into a world market, 
but don't you tell us how to treat our farmers. Period, end of 
statement.
    And he smiled. The conversation was over with. I think we 
all learned a lesson that day, Rick. Anyway, let us move to our 
first panel. I am extremely pleased this morning to have these 
panelists with us. Let me introduce them to the hearing: Danny 
Sells, Associate Chief, Natural Resources Conservation Service, 
USDA in Washington. I understand that Danny traveled up here 
yesterday afternoon, got caught in a traffic jam and so took an 
alternative route through pastoral Pennsylvania. Mary 
Heinricht, Regional Director for the Mid-Atlantic American 
Farmland Trust from Culpeper, Virginia; Professor John C. 
Keene, Department of City and Regional Planning, University of 
Pennsylvania, Philadelphia, Pennsylvania.
    Thank you all very much for being with us this morning. Mr. 
Sells, let us turn to you.

 STATEMENT OF DANNY SELLS, ASSOCIATE CHIEF, NATURAL RESOURCES 
          CONSERVATION SERVICE, USDA, WASHINGTON, DC.

    Mr. Sells. Mr. Chairman, Senator Santorum, I appreciate the 
opportunity to discuss with you today the important issue of 
farmland protection. I am Danny Sells, Associate Chief of the 
Natural Resources Conservation Service. I would like to begin 
by recognizing the efforts and leadership of members of this 
subcommittee for introducing S. 598 and co-sponsoring 
legislation that would accelerate our work in this area.
    Additionally I would like to recognize three employees of 
the Natural Resources Conservation Service with me today. Janet 
Oertly is the State Conservationist for Pennsylvania. The work 
of our agency is done locally, working with local landowners to 
protect natural resources. Janet is responsible for directing 
that work in this State. This is one of, if not the, most 
important jobs in NRCS, and she and her staff are doing a great 
job for Pennsylvania. Janet will be discussing that work with 
you on the next panel.
    Also with me is Eric Carlson. Eric is from Pennsylvania and 
most recently was a Resource, Conservation, and Development 
Coordinator in the State. He currently is serving on our 
legislative affairs staff in Washington, DC. and is doing a 
great job for us, as well. Lastly, Rick Swenson. Rick is our 
East Region Regional Conservationist and has only been in this 
position for about a month. Rick's most recent assignment was 
State Conservationist in New York. He is over Pennsylvania and 
the other New England States, and we are glad to have Rick as a 
part of our executive team.
    Mr. Chairman, as a farmer myself from northeast Tennessee, 
I know that most farmers want to stay in farming. It is a way 
of life, a tradition, and we want to stay on the land. But in 
recent years, I have noticed in my own community that fields 
and farms are giving way to pavement and people. On viewing the 
countryside on the way to this hearing, I would expect that the 
same is true in many parts of Pennsylvania.
    If we are to plan strategically about agriculture in the 
next century, we must work to preserve both the land and the 
people who work the land. We estimate that since 1967, an 
average of 1.5-million-acres-of-farmland has been converted to 
other uses each year. Even more troubling is that in most 
States, prime farmland is being converted at two-to-four times 
the rate of less-productive land. If left unchecked, conversion 
of farmland will affect the Nation's food supply, reduce the 
quality of our water and air, lead to the general erosion of 
quality-of-life issues due to the lack of open space for some 
areas of the country.
    Our Federal efforts to help stem this tide include several 
new initiatives. The President's fiscal year 2001 budget 
included $65 million annually for the Farmland Protection 
Program. The budget also proposed a $1.3 billion increase for 
conservation programs that helped family farmers protect 
natural resources and keep farms in operation. Within this 
proposal are several initiatives, including the conservation 
security program, that provide support for those farmers who 
are already investing in private land conservation, a direct 
payment for doing good conservation.
    We should never forget that the very best way to protect 
farms and farmers is for agriculture to be profitable and 
economically sustainable. Additionally, the Farmland Protection 
Program is a key element of the administration's Liveable 
Communities Initiative. Our intention for this initiative is to 
provide communities with tools, information and resources they 
can use to enhance their quality of life, ensure economic 
competitiveness and build a stronger community.
    The Farmland Protection Program authorized by the 1996 farm 
bill protects prime and unique farmland. It provides matching 
funds to leverage dollars from States, tribes or local 
government entities that have established Farmland Protection 
Programs. The enabling legislation of the Farmland Protection 
Program provided for total funding authority of $35 million, 
which was exhausted by the end of 1998.
    Coupled with State and local investments of about $190 
million, the current program will protect 127,000-acres-of-
prime-and-unique-land on 460 farms spread across 19 States. I 
believe this is a notable success for a relatively small 
Federal investment. We are pleased that Congress included $10 
million for a Farmland Protection Program in the Agricultural 
Risk Protection Act of 2000, signed by the President this year.
    This will help keep interest in the program high after 2-
years without funding any new projects. Additionally, we are 
closely watching the Conservation and Reinvestment Act, passed 
by the House and currently before the Senate, which could 
provide up to $100 million each year for farmland protection 
and related activities through the NRCS and the Forest Service.
    In closing, I would like to invoke this administration's 
strong support for both S. 333 and S. 598. I look forward to 
working with you to protect farmland and rural areas that are 
dealing with the pressure of development. Together, we can help 
family farms continue their long and honorable tradition of 
providing food, fiber, open space and a healthier and more 
livable environment for us all. I thank the Chairman and would 
be happy to answer any questions that the members may have.
    [The prepared statement of Mr. Sells can be found in the 
appendix on page 40.]
    The Chairman. Danny, thank you very much. Before we go to 
questions, we will hear all of the panelists, because some of 
the questions, we may want to ask all of you to respond to. 
Now, let me turn to Mary Heinricht, Regional Director for the 
Mid-Atlantic American Farmland Trust. And you have traveled up 
from Culpeper?
    Ms. Heinricht. Yes, I have.
    The Chairman. Welcome to the Committee.

  STATEMENT OF MARY HEINRICHT, REGIONAL DIRECTOR FOR THE MID-
         ATLANTIC AMERICAN FARMLAND TRUST, CULPEPER, VA

    Ms. Heinricht. Thank you, Mr. Chairman and Senator 
Santorum. We very much appreciate this opportunity to provide 
you with our views on the merits of the Farmland Protection 
Program. My name is Mary Heinricht. I am the Mid-Atlantic 
Director for American Farmland Trust and I focus on New Jersey, 
Pennsylvania, Maryland, Delaware and Virginia, and that 
includes the Northern Piedmont, which is the second-most 
threatened agricultural region in the United States, second 
only to the Central Valley in California.
    We have the most valuable land here, some of the most 
productive, and within 24-hours we can have fresh food and 
produce to over 40-percent of the American population from this 
rich area. I would like to recognize the Senator and thank both 
of you for your championship of the Farmland Protection Program 
since its inception. This is a very important matter. As we 
look at the conversion of farmland in the next decade-and-a-
half, over 70-percent of the private lands will be changing 
hands, and that means that people are going to be dealing with 
inheritance issues.
    We are looking at young farmers trying to figure out how to 
afford to invest in land, as well as the infrastructure that 
goes into farming. We have a bit of a problem in that there is 
a speculative value that has been attached to farmland that far 
exceeds its resource value and far exceeds the ability of the 
typical farmer to invest in that land. The inclusion of $50 
million in the Farm and Ranch Land Act, the Conservation 
Reinvestment Act, carries a positive sign for this program and 
we hope you will support its passage in the Senate this month.
    Certainly, looking at the way local Government has been 
able to take Federal money and leverage it, we are encouraged 
that there are more and more programs looking at bringing this 
to local government. The disparity of the values in the land is 
really much easier handled at the local level than from a 
Federal program, and so passing these funds down to local 
governments, where they can look at local strategies, has been 
a great benefit to them.
    When you look at the leveraging that was mentioned by Mr. 
Sells, this is something that will be a better and stronger 
tool as time goes on. We have asked for more than $50 million a 
year for the new program, and we think that really maybe the 
need may be more like $150 million a year to help keep the 
States growing at bringing easements to the forefront. We do 
not have full participation from all around the country. Only 
19 States actually have adopted easement programs, although 
there are another 50 local programs.
    We think that more money from the Federal Government will 
encourage more and more States to do this. I am working with 
Virginia at the moment, who is looking at these programs, and 
quite honestly, a lot of their decision-making is based on 
whether there are other funds coming in to leverage their local 
contribution.
    Local government talks to State government to see how they 
can put funds together, and then the State government looks to 
the Federal Government. So, the more we can look to Congress 
giving money to the States for this purpose, I think the more 
we will be encouraging those local programs to exist.
    We would like Congress also to recognize the sophistication 
of the approaches that State and local government is taking, 
and we think that the program could be more flexible. 
Currently, each of easements under the Farmland Protection 
Program must comply with a lot of Federal criteria and each 
individual easement has to be approved by USDA. We think that 
maybe making the program more similar to Forest Legacy, where 
we allow the States to determine the priorities and the 
criteria for these easements, would actually make it an easier 
program to deal with.
    Decisions about land-use and economic investment are most 
effective when they are made at the local level and implemented 
at the local level, and this type of change in the program 
might make it move along more quickly and be more successful. 
We would also like to see them give them more leeway in how 
they distribute the funding, and that maybe block funding would 
make it easier for States to do this, rather than individual 
funding, so that they can think about the amount of money that 
is coming ahead and plan for that.
    If both the local and regional strategists know the amount 
of money they are going to get, then they can be putting 
together their programs and their deals. Generally, easements 
are put together through a group of people and a group of 
efforts. Different types of programs come together to do this. 
The farmers may come in groups of people and, therefore, if we 
know what the number is going to be that is coming down, it 
helps get everything else in order and speeds along this 
process.
    When you think about who participates in the easement 
programs, it is generally farmers who are under some sort of 
pressure, and therefore time for them really is of the essence. 
If they know what they are dealing with, then it is much easier 
to bring together the bankers and the other programs. We also 
think that more could be done to promote participation from 
States that are not currently taking advantage of the program, 
including the eligibility for nonprofit entities to participate 
under State approval, and maybe State supervision is one way to 
do this and to help leverage again the private dollars.
    Generally where we see private donations for conservation, 
they tend to go to nonprofit entities and there is not really 
an easy way for someone to donate money directly into a State 
program. So, we might think that, you know, through State 
supervision and State approval, that this might be a way to 
encourage more private money to come directly into land 
conservation.
    Also, currently the program is written to focus on prime 
soils and it limits our State's abilities to protect ranch 
lands and also some unique lands. If you think along the 
Eastern Seaboard about the way our wine industry is growing, 
those are not prime soils. They are unique situations, but the 
soils actually are not considered prime soils, so we might 
think of some expansion of that criteria to give us a broader 
application for this.
    In closing, I would like to underscore that for the past 
quarter-century the conservation and environmental objectives 
in our country have been largely achieved by either regulations 
or Government purchase of private properties, and they have not 
resolved all of the conflicts that we have all seen. So, it is 
important as we move into the new century to have more tools 
for private stewardship to be contributing to those, and we see 
these programs as an excellent example of how we are going to 
change that and to govern a better way and to let our 
communities make their own decisions.
    We would like to thank you again for your leadership on 
this important national issue and for allowing us the 
opportunity to comment on it. And, again, we will take 
questions. Thank you.
    [The prepared statement of Ms. Heinricht can be found in 
the appendix on page 45.]
    The Chairman. Mary, thank you very much. Now let me turn to 
Professor John Keene, Department of City and Regional Planning, 
University of Pennsylvania in Philadelphia. Professor Keene, 
welcome before the Committee.

  STATEMENT OF JOHN C. KEENE, DEPARTMENT OF CITY AND REGIONAL 
     PLANNING, UNIVERSITY OF PENNSYLVANIA, PHILADELPHIA, PA

    Mr. Keene. Thanks, Mr. Chairman, Senator Santorum. I 
appreciate the opportunity to come and testify on this very 
important bill. I would like to focus on the broader context of 
managing urban growth, of curbing urban sprawl, of finding ways 
of promoting the agricultural economy to keep farmers farming. 
As you pointed out, Senator Craig, where the farmers are not 
farming, there is not much point in protecting farmland--and, 
finally, to protect prime farmland, because it is this context 
within which the usefulness of agricultural conservation 
easements and other specific methods must be evaluated.
    I would like to say a few words about my background so that 
you understand the perspective that I bring to this problem. 
After graduating from law school, I practiced law in 
Philadelphia for about 5-years and then found myself becoming 
interested in urban problems. After getting a master's degree 
from Penn in city planning, I have been on the faculty with my 
research interests focusing on the protection of farmland, 
growth management, and environmental policy, all of which, as 
you understand, intersect.
    I have been researcher and co-author of two major studies 
of Farmland Protection Programs; the first, The Protection of 
Farmland, was published by the National Agricultural Land 
Survey in 1981, and the second, Saving American Farmland, What 
Works, was published by the American Farmland Trust in 1997. I 
have also been co-author of two books on growth management, one 
concerning growth management in New Jersey and the other with 
the Pennsylvania Environmental Council, focusing on growth-
management techniques in Pennsylvania. I have published a 
number of Law Review articles and other reports focusing on 
farmland protection and growth management.
    It has become increasingly clear that urban sprawl is a 
wasteful phenomenon. It results in the loss of prime farmland 
as new suburban communities, shopping centers and industrial 
facilities are constructed on the fringes of our metropolitan 
areas. It has led to the depletion of the economic base of city 
after city across the country as companies move out, taking 
with them jobs and tax revenues. It has meant the wasteful 
duplication of infrastructure on the suburban fringe, on the 
rural fringe, while existing facilities in the older cities, 
like Philadelphia, for instance, are being used under capacity. 
It has meant the degradation of significant ecological systems.
    And yet, in a general way, our Federal, State and local 
policies with respect to urban development have largely 
subsidized urban sprawl. I cannot take the time right now to go 
into the details of that, but I think you are familiar with it, 
the insurance guarantees and programs, the interstate highway 
program, the programs for constructing sewer systems, sewage 
treatment plants and so forth.
    We no longer can afford to pursue a national policy based 
on urban sprawl--we must now concentrating on finding ways of 
developing effective programs for managing growth, for 
protecting farmland from premature conversion on the one hand, 
revitalizing our center cities, so that some of the development 
pressure which has been moving centrifugally out to the edge of 
metropolitan areas, is redirected to the older cities, thereby 
reducing the pressure on farmland for new facilities. This is 
especially important, as we have seen, in areas like the 
northern Piedmont and the whole, shall we say, the west face of 
megalopolis, which runs all the way from northern Virginia up 
through Massachusetts.
    As we demonstrated at length in Saving American Farmland, 
What Works, an effective Farmland Protection Program is a 
synthesis of a number of different major techniques, 
agricultural protection zoning, purchase of agricultural 
conservation easements, differential assessment of farmland for 
real property purposes, gubernatorial executive orders which 
coordinate the efforts of State agencies in programs that 
affect the farmland base and so forth. No single program is 
effective in isolation. It is only an integrated package which 
will be effective.
    Let me turn to the agricultural conservation easements 
technique, which is the focus of these bills. As of February, 
2000, 19 States had adopted purchase of agricultural 
conservation easements, spending something like more than $937 
million to protect 663,000-acres. Many local communities have 
established their own PACE programs, allocating more than $300 
million to protect over 150,000-acres. This is impressive 
testimony to the practicality and political acceptability of 
the idea of conservation easements.
    The National Governors Association has endorsed the two 
bills that concern farmland protection unanimously. This 
technique is an essential part of any broad-based program for 
protecting farmland. The challenge is demanding, the need is 
urgent and the time is now. I urge the Senate to renew this 
program with the largest appropriation that is feasible, given 
our broader concerns for budgetary balance.
    Thank you.
    [The prepared statement of Mr. Keene can be found in the 
appendix on page 48.]
    The Chairman. Professor, thank you very much. Let me lead 
with this question that I think--probably, Danny, to you and to 
Mary, because you broached it and you talked about flexibility 
of program and application of program at the local level. We 
understand now that the program must have a conservation plan 
developed in consultation with the NRCS. Danny, could you 
explain how that works in actual practice, number one, and 
number two, the extent of that plan as it relates to cost and 
application, and how that generally has worked with the 
conservation easements that have been put in place to date? And 
I say that in the context of possibly responding also to what 
Mary has suggested about blocking grants, greater flexibility 
at the local level--in other words, the complication of getting 
to where we want to get, complication put down by Federal 
regulation; and, in fact, is it working and what are the costs 
involved?
    Mr. Sells. Mr. Chairman, as you well know from your own 
experience with the Committee, the NRCS works at the local 
level. Our main business is conservation planning, ensuring 
that folks have the tools, the wherewithal and the knowledge, 
through our technicians out in the field and our 
conservationists, to do the right thing the first time and 
hopefully protect these resources. A natural extension of 
anything that would be along the lines of protecting farmland 
for future generations naturally wants to look at that issue of 
making sure that those resources are dealt with adequately 
after an easement comes into play.
    The process, of course, is just our local conservationist, 
and that is the same as the local conservationist here in this 
county, working with someone that, as you discussed, the 
possibility that they may be interested in an easement on their 
farm or having an easement placed on their farm in order to 
protect that. You find these folks to be very willing. They 
generally are interested in conservation and are generally more 
adept at being good conservation farmers to begin with, but 
also just because they have an interest in preserving that 
land, you have someone who is willing to go through the process 
of looking at how you treat that land after it comes into 
easement.
    Of course, we do have other programs that provide 
assistance to that producer, as well, in order to make sure 
that they can get those practices installed timely and in a 
cost-effective manner. From the standpoint of the issue of 
block granting, we feel at this particular point that it is 
important with this very new program that has been minimally 
funded at $35 million thus far have an opportunity to work, 
have an opportunity to be funded at a level to really see how 
it can work.
    There are a lot of things you and I have to take into 
consideration, and that is protecting that interest that the 
taxpayer themselves are putting into this program and into that 
easement. The easement is permanent, and permanent is a long 
time, and making certain that we have in place the opportunity 
for that to remain perpetual, providing those benefits to 
society both from an aesthetic standpoint and from the 
standpoint of the ability to continue to produce food and fiber 
is critically important.
    We think the opportunity to involve more individuals, more 
people around the country, to have more partners at the table 
with us, is very important in expressing the interest in making 
sure that these programs continue to grow in enthusiasm as we 
have seen them in the last few years. So, we are not 
objectionable to looking at some alternatives, but we feel very 
clearly that probably the three highest priorities we have for 
this program right now, as opposed to any radical changes in 
the program structure itself, is funding, funding and funding.
    The Chairman. Mary, do you wish to comment on the 
experiences you have had and that Mid-Atlantic has had in 
cooperation with the NRCS and the local committee structure and 
how that works?
    Ms. Heinricht. Yes, I think our comment was to think about 
how we plan this out, as opposed to objecting to the way the 
program has worked. When we are talking about a conservation 
easement, you are talking about the typical farm family's 
value, their inheritance, the future financial health of their 
family and all this. A lot of times, there are five-to-fifteen 
people who actually have an interest in the land and the 
business, and it is a very complicated--it is estate planning 
at its most sensitive, really. So, the more things that can be 
done to make that family comfortable and to give them 
flexibility in how they approach this, the better.
    And that is why we said allowing local flexibility-an 
easement is going to be different from farm to farm to farm. 
Generally, when you look at the success in Pennsylvania, of 
protecting farmland, it is because you have had not only the 
State program, but you have had then county programs that 
supplement it, you have land trusts that help work on it, you 
have a multitude of choices for that family to make in their 
estate planning and in settling these things.
    So, we are trying to figure out how to make them most 
comfortable, and if we get the agreement between the bigger 
programs done up front and we have kind of the ideas of where 
each group has to comply with the other's regulations, then the 
least amount of pressure and confusion happens to the farmland 
owner.
    The Chairman. Professor, you mentioned some of the programs 
we have contributing to the urban sprawl that is obvious across 
our country and our landscape today. My reaction, I wrote in my 
notes as you were giving your comments, was unintended 
consequences.
    Mr. Keene. Exactly.
    The Chairman. I don't think that when Eisenhower and others 
were proposing a great interstate highway system, they were 
suggesting they were going to kill inner city America or even 
thinking about it at that time.
    Mr. Keene. I think they probably thought that, by 
increasing the accessibility of the center cities, they would 
bring more jobs to the center cities.
    The Chairman. Probably so.
    Mr. Keene. But highways are a two-way street, so it worked 
the other way.
    The Chairman. We put a lot of money into our transportation 
system and Rick and I learned early on in the business of 
representing our States that, that was something we duked it 
out for, high priority. We have a county commissioner who is 
going to testify today. I doubt that he would want this county 
to have any less of its share or any percentage less of share 
of Federal highway transportation dollars versus State, and all 
of those kinds of combinations. It has literally become the 
bread and butter of the infrastructure of this country.
    How do you suggest we adjust or make those kinds of changes 
if, in fact, now we are having to come in on the back side and 
subsidize or a form of subsidy to protect landscapes and 
certain sensitive ecosystems and, of course, the agriculture 
land that we are here talking about today?
    Mr. Keene. Well, you put your finger on a very difficult 
issue. I think as a starter ISTEA and TEA21 attempt to shift 
some of the emphasis from surface highway road transportation 
facilities to mass-transit facilities, which would better serve 
high-density areas. That is a start in what I consider to be an 
important direction. My point is that the issue of protecting 
farmland has to be viewed in this broader context of urban 
development, because if we do not find some way of redirecting 
development pressures away from the urban fringes, in the long 
run, it is going to be very difficult to maintain these 
wonderful farming areas which I am familiar with around here, 
in Lancaster County, one of the most productive, if not the 
most productive, unirrigated county in the country, with over 
$1 billion worth of agricultural produce, more than many 
States.
    If we do not find a way to reduce the development pressure 
on the peripheral counties, ultimately, within our lifetime, we 
are going to lose them. So, though it is difficult 
politically--I couldn't agree with you more--we need to try to 
find some way of shifting the emphasis more toward mass 
transit, toward more concentrated community development and, 
most importantly, toward revitalization of the old cities.
    The Chairman. Senator Santorum?
    Senator Santorum. Thank you, Mr. Chairman. I am going to 
sit in for Senator Lugar and ask his question that he always 
asks at these hearings, and that is agriculture is not 
profitable because we have too many people producing too much 
and prices are low because of that, and so why are we saving 
agricultural land? I mean, what is the point? I mean, we have 
got too many farmers and they are producing too much food, so 
why are we out there saving agricultural land?
    And your answer to that is?
    Mr. Keene. Who would you like to start?
    Senator Santorum. Go ahead. Take them in order. That is his 
standard comment when I talk to him about this, and that is we 
have got too much Ag land right now, you know, we have got too 
much food we are producing. Why are we saving Ag land?
    Mr. Sells. I guess, Senator, to some degree I would 
probably defer to the gentlemen the Chairman mentioned from 
France as having a pretty good response to that, and that's 
generally what the people want. I think, in large degree, we do 
want to save this farmland for a lot of different reasons. Some 
of them are heartfelt and some of them are more aesthetic, from 
the standpoint of the kind of communities we would all like to 
live in.
    I think, too, that it is important from a strategic 
standpoint, as we look, coming to the next farm bill, of what 
agriculture is about and what we expect it to be in the next 
century and how it is going to develop and how some of the new 
processes, more science and new science, is going to impact it, 
and what is the appropriate amount of land to have in 
production as you deal with all these issues. I think it is 
absolutely critical that we come together, and I think that the 
broadening of the family discussing this issue is critically 
important, and that is the reason that, whether it is NGOs or 
whatever, getting this thing to spread out in a broader fashion 
so that more folks can be involved in looking at their 
community, looking at their watershed, to plan how you would 
like for that community, that watershed, to look and how you 
think agriculture ought to fit in it.
    You know, as we were talking about interstate highways, to 
me and in my community, I'm not concerned about interstate 
highways. Generally, they are in fairly decent locations and 
they are there to stay. It is the smaller roads that are 
killing us. You know, you build a road and the development just 
follows. Well, the ability to be in a community, an active 
community, that wants to make sure that they are looking at 
where those roads and that development will occur--you know, 
the Farmland Protection Program is not an anti-development 
program, it is a Farmland Protection Program.
    So, our ability to look at it as a community, to decide 
where we can have agriculture, where it makes most sense, where 
we can protect those prime and unique lands, and there are 
other places where it is probably appropriate for us to give 
that up to development, because those communities are still 
going to grow. The economics are just there to do that. 
Protecting our agricultural land, you can probably come up with 
numbers that tell you really do not need to, but I think, from 
the standpoint of this country and where we are in our history, 
I do not think that our view of the world in some number of 
years to come will be much different than the gentleman from 
France in the fact that the people accept and want this to be 
the kind of land that is aesthetically beautiful and we are 
taking care of, and I think that is the point.
    Ms. Heinricht. Well, when we settled America, people got 
here and they got out of boats and they didn't have a whole lot 
of choices as to where they could establish their communities, 
but they consistently did it where they had the most productive 
soils, because they needed to feed themselves. If we look at 
farmland as a resource, the best soils and the unique areas 
take the least amount of input, and if you think of the way we 
have become very sensitized to environmental issues in America, 
and, of course, we have had a great deal of debate about the 
things that go into our food or do not go into our food, and 
that will continue to go on.
    It seems important to protect the best of that resource. A 
lot of times, when I talk to communities about how to plan 
their comprehensive plans, I talk about gold mines and you do 
not dig for gold where there isn't gold. So, we really should 
not be trying to force farmers into land to grow where it is 
not well-suited. Farmers choose their crops and what they are 
doing based upon the capability of the landscape there and what 
takes the least amount of input. They are good businessman. The 
farmers today are the ones who are the best business people, 
because they have lasted through all of this.
    Today, farmers are getting for some commodities the same 
price they got in 1950, and yet they are still able to hang on 
there. But if you think about the potential for growth in this 
industry and you think about how much more you pay for food 
today and how much more you eat in restaurants and how you pay 
a premium for restaurants that have fresh, local produce or who 
have organic food. Whoever would have thought you would be 
going to a grocery store and weighing those nice, bright red 
tomatoes on the vine and paying $3 a pound, and you are paying 
for the vine, which you do not eat.
    In northern Virginia, we have been looking at the growth of 
niche farming in Loudoun County, and we can probably debate for 
a long time whether Loudoun will be agricultural in the future, 
but the growth in profits on that urban fringe are equal to the 
growth in the high-tech industry. It is not equal in dollars, 
but in terms of the profit coming to the farms more and more 
every year, it is growing at the same rate.
    Mr. Sells. High-tech companies do not make any profits, so 
that is a different story.
    [Laughter.]
    Ms. Heinricht. But we have had a cheap food policy for a 
long time and it has been a good policy. We have always make 
decisions in America for the broadest good for everyone and we 
have made decisions to subsidize certain things because it 
benefits the most people, and our policies on food were meant 
to benefit the people who eat. And now everybody is pretty well 
able to eat and it is time to be looking at getting the farmer 
more than 10 or 20 cents on the food dollar again.
    Mr. Keene. That is a very broad and provocative question. I 
think the broadest answers to it lie in the area that, first of 
all, agricultural products have been an important part of our 
international trade over the years. It ebbs and flows. They are 
more or less profitable, but, on balance, they have been an 
important component, making us one of the major agricultural 
exporters in the world. Second is the point that Mary made, 
that once you pave over prime farmland, it is gone. It is going 
to be very difficult and very expensive to restore that to its 
prior fertility.
    But I think the broad question really needs to be broken 
down into a more specific set of questions which have more 
specific answers. I know I did some work in Minnesota. We were 
consulting with the Department of Agriculture there about 
protecting farmland, and they asked the same question: We have 
so much land and so few people, why go to a lot of trouble?
    Well, I think that points to an answer that the problem is 
different in different parts of the country, where you have 
growing populations, expanding metropolitan areas, coming into 
conflict with, running headlong into prime farmland, the 
arguments are much stronger for protecting farmland. Where you 
have a large amount of land and relatively low population 
pressures, the arguments are less strong. Different techniques 
may be appropriate.
    But I think really part of the answer is the point I have 
made, that we are not talking just about protecting farmland. 
We are talking about trying to create communities in the 21st 
century which will be better places to live in, which will 
allow more of a sense of neighborhood, which so many of the 
suburban areas do not, which would be more efficient users of 
the infrastructure being built. So, you have to look at both 
sides of this coin; on the one hand, trying to build more 
compact communities which are better served by mass-transit, 
which provide greater diversity and, on the other hand, trying 
to protect the farmland resources and the other ecological 
resources which lie on the outskirts of the city.
    Senator Santorum. Ms. Heinricht, you talked about the 
importance of having a Federal program. Do any of you have 
anything additional to add? One of the questions--again some of 
the critics of this--is, well, the States are doing it, the 
counties are doing it. There is really no reason for the 
Federal Government to get in here and put its oar in the water 
here, just let the local communities do what they want to do, 
let the States do what they want to do. Do you have any comment 
on that?
    Ms. Heinricht. Well, I think most State and local 
governments do not have a lot of the technical resources that 
USDA and the Federal Government bring to this issue. If you 
think about a typical agricultural County that may have five or 
ten local employees, they really do not have access to a lot of 
the mapping resources and the understanding of even the LESA 
program or how these things come together. So, the Federal 
Government really can provide a lot the background to help 
local Government make these decisions, to help them make the 
land-use decisions, to help them decide where to save their 
land, how to do it, you know, what the best decisions are.
    So, I do not believe we want to set up a whole new Federal 
level, duplicating the things that the local people do, but in 
a lot of cases the local governments just don't have the 
capacity to get to the really big issues. So, I think they 
really do complement each other quite well.
    Mr. Sells. I do want to say that I honestly believe we have 
got to operate these in a manner which ensures that we do not 
have this become just a Federal responsibility. This is a mixed 
responsibility that we all have, whether you are in a local 
community or, for that matter, a local private-land owner or, 
at the State level or at the Federal. I think it will only work 
if we are all in this together.
    I will say that the programs Pennsylvania has put into 
place and the local communities stepping up to the plate, I 
think it is an example of how this can be done in a more 
appropriate fashion all over the country. As Mary indicated, 
there are a lot of resources that the Federal Government can 
bring to bear that are important, and I think the most 
important one is that technical assistance, and the technical 
assistance in this particular case that is provided through our 
employees across the country, whether it is in these 19 States 
or the balance, it is important to have that ability to provide 
the technical assistance that folks need, that are out there 
every day trying to make a living, or communities themselves 
that are making a living doing something different than this, 
that even when they come together in their meetings to begin to 
plan on how they would want their community together or to come 
together or to look, that they have the expertise, the 
technical expertise to do better planning, to ensure that they 
know what soils exist or what capabilities exist out there as 
they look at where roads or developments or anything of that 
nature should be.
    We have, as we have talked with you before, and the chief 
has, as well, we are incredibly stressed, from the NRCS 
standpoint, of providing the amount of technical assistance 
around the country that is needed. As we went out recently with 
a set of hearings on the Farmland Protection Program and the 
issues therein, that was the big cry. We need more folks out 
helping, working with us every day on the land to help us make 
better decisions.
    There is a huge shortage of that assistance out in the 
countryside and hopefully, over the course of the next budget 
or two, as we look at this, we can make up some ground that we 
have lost over the course of--of the correct thing of trying to 
balance the budget, but hopefully get our priorities into line 
where we can provide additional technical assistance, so folks, 
communities, all can make better decisions when they are 
planning.
    Mr. Keene. If I can just add to that, Senator Santorum, one 
of the most commonly used techniques for deciding which land is 
the best land, which land is under the least pressure, which 
land is most appropriate for the sale of a conservation 
easement, is the so-called Land Evaluation and Site-Assessment 
program or technique, which Mary mentioned, LESA, as it is 
known by its acronym. This is really a decision-making aid, a 
decision-making process which assists the county or the 
township or the State to determine which parcels have the most 
productive land, which are most appropriately located with 
respect to prospective urban development, which ones, in short, 
it makes the most sense to invest substantial amounts of money 
in.
    To operate the LESA, or Land Evaluation and Site-Assessment 
program, to do it right, you need information. You need to know 
about soil quality. You need to know about comprehensive 
planning efforts. You need to know about zoning. You need to 
know about prospects for development. The Geographic 
Information System, which I am sure you are familiar with, is 
something that is just sweeping across the country now, 
providing very useful access to all kinds of natural and 
economic information, but it takes money to set up a GIS 
system. It takes experts to run it. And, as Mary said, many--
especially rural--counties simply don't have the revenues to 
support that kind of thing.
    The States could take up some of this, but certainly the 
Federal Government can help out on a broader basis to bring to 
bear the experience of various offices around the country. I 
think this highlights one of the major reasons for having the 
Federal Farmland Protection Program. It serves as an incentive 
for States and local governments to engage in this kind of 
protection. Their money will go twice as far, or maybe not 
twice as far, but on the order of twice as far if there is a 
Federal program.
    It also places the imprimatur of Federal approval of 
acceptability on this technique. It is, for people who are not 
familiar with it, a very strong technique to have the 
Government come in and buy an interest in your land. I know I 
was working 20-years ago in Chester County, where we were 
suggesting that this would be a useful technique for protecting 
farmland and ecologically significant land, there was 
resistance to it. I don't like the idea of having the 
Government do it. Well, one answer is to say, well, it's okay 
now. A lot of the States are doing it around the country, over 
$1 billion has been spent on it, hundreds of thousands of acres 
have been protected.
    That reminds me of something else. I think, as Mary 
suggested, that the role of charitable trusts can be very 
important. In Lancaster County, for instance, the Lancaster 
County Farmland Trust, working with the county, has protected, 
I think, over 25,000-acres. It provides an alternative for 
farmers and other landowners who are reluctant to go into a 
partnership with the county or the State. They can save their 
land without receiving money from the Government. These are 
privately-raised funds. The more the idea of purchase of 
agricultural conservation easements is common currency, the 
more it is accepted, the easier it is for the nonprofit 
organizations to undertake a program like this and provide what 
can be a very essential parallel program to the Federal, State 
and local programs.
    Senator Santorum. In Lancaster County, and I have been out 
talking farmland preservation there for a long time, they have 
done a great job with public and private partnerships and they 
have really, I thought, done a great job of buying a lot of 
farms contiguous to each other to create a whole area that will 
be set aside. And that is very exciting. I know, Mr. Chairman, 
I am probably long on my questions here, but just a couple of 
real quick ones. First off, on this block granting idea which, 
I know, Mr. Sells, you are not in favor of, but who would the 
block grant go to? Would it go to the State? Would it go to the 
County? Would it go to a nonprofit?
    Ms. Heinricht. Well, I think you would look at each--how it 
was set up. I think you probably want to have a State strategy. 
And we are just trying to set Virginia up based on, actually, 
the Pennsylvania model. We are encouraging them to come along.
    Senator Santorum. Well, the legislation was drafted after 
the Pennsylvania bill. That is why we do so well under it.
    Ms. Heinricht. That is where we are looking at setting a 
standard and then dropping it down to the next level, to get--
--
    Senator Santorum. I am still not understanding where the 
money would go.
    Ms. Heinricht. I think probably to the State, and then the 
State would look at how it would qualify across the State, and 
then your nonprofits or your county or whatever would then meet 
the State standard and it would be passed through that way. I 
think you will probably want to look at it.
    Senator Santorum. OK. One other thing you mentioned was 
estate planning which, of course, leads me to the question of 
estate taxes or death taxes, as they are now called. We had 
testimony at one of these other hearings from an officer from 
Vermont who testified that one-third of the applications or 
one-third of the land that has been set aside was the people 
who came and asked for this money did so to pay for estate 
taxes, as part of their estate planning. I would think estate 
taxes have a very large role in the destruction of a lot of 
agricultural lands in this country. Do you want to comment on 
that?
    Ms. Heinricht. Well, yes, I think it does.
    Senator Santorum. I am just trying to make the point that 
the estate tax is an anti-environmental tax. I mean, it really 
is, in the sense of people selling land for development to pay 
for it.
    Ms. Heinricht. Well, particularly when you think about 
farmland now, generally it is a larger family that all have an 
interest in that land, most of whom are not farming it, and 
therefore estate settlement is a very complicated issue. An 
awful lot of our farmers or our farmland is farmed by non-
resident farmers, where someone down the road is actually the 
active farmer, and that changes the amount of estate tax that 
is due when that farm changes hands. So, it has been very 
destructive to keeping farms in farming.
    Mr. Keene. Could I add to that? I did a study for the 
Council on Environmental Quality, called Untaxing Open Space, a 
title which I always felt was kind of nice. It was a study of 
differential assessment of farmland. The idea behind 
differential assessment of farmland is that real property taxes 
are one of the factors--of rising real property factors, taxes 
are one of the factors which are forcing farmers to sell out, 
because their marginal profitability is gradually declining. As 
urban development pressure moves out, land values go up and 
taxes rise.
    We found in that study, and I haven't seen any study that 
has contradicted that, that there are a number of factors that 
lead farmers to sell out. It may be that they are reaching 
retirement age and they do not have a member of the family to 
take over. It may be that land values have gone so high that no 
farmer can afford to buy a farm. The only way you can get a 
farm is to inherit a farm. It may be that intruding 
suburbanites are complaining so much about the farming that it 
has just become a nightmare for them to continue and they are 
going to say, ``I am going to cash in and go down to Florida 
and take it easy, not get up every morning at dawn for 7-days a 
week.''
    So, there are a number of factors with respect to 
differential assessment of farmland. I think the same is true 
with respect to the estate tax. There are a number of factors 
besides simply the estate tax burden which will lead a farmer 
to sell. A farmer may be able to manage it financially, but it 
may not be economically sensible for him to do that. There may 
not be a member of the family to take over or there may be 
disputes between the children--to take over. It may be that no 
farmer can afford to buy that land.
    Again, it varies so much from one part of the country to 
the other. If you are talking about farming in the Metropolitan 
fringe, it is much more likely that land values will be high, 
making it more difficult to pass the farm on from one 
generation to the next. If you are talking about farming in the 
middle of Montana or a very large State with very few people, 
the development value will not be much of an increment over the 
agricultural-use value. So, it will be easier to sell that 
ranch or that farm for farming, and therefore that won't be so 
much of a problem.
    So, I think we have to understand again that the answer is 
not a simple one. Estate taxes, in many cases, are important. 
In many cases, they may be forcing people to sell. In other 
cases, they may not be the predominant factor.
    Senator Santorum. Thank you, Mr. Chairman.
    Mr. Sells. I was just going to say quickly that there is 
not a silver bullet here that fixes this thing and it has got 
to be a more comprehensive approach. Beyond question, estate 
taxes have some impact. However, there are a lot of other 
impacts and we have made a good deal of progress on some of the 
State exemptions for farmland over the course of the last 
several years; but an awful lot of that, as indicated by the 
other panelists here, are dealing with debt, operating 
expenses. And a more comprehensive approach that actually 
includes, not just farmland protection, but the reality of 
trying to come up with policy that helps agriculture be 
productive, profitable in a fashion that allows the farmer to 
stay on that land.
    As I indicated in my earlier remarks, the majority of us 
who are farmers want to be there. We don't necessarily need to 
be millionaires from the Federal Government or anything else, 
but we need the opportunity to try to hang on and stay on that 
land and feed our families. And that opportunity exists in a 
multitude of answers and not just in one single answer, which 
probably makes it more difficult today. If there was one answer 
out there, we would all be scrambling to do it.
    The Chairman. Well, thank you all very much. Let me make 
one comment and possibly one question of you, Danny. But, 
Professor Keene, when we look at the urban and urban-fringe 
growth, you referenced Montana. I come from Idaho, mostly known 
to people as a large, open State, lots of public land, large 
ranches. Strangely enough, the economy of those ranches is 
dramatically impacted today, also. Few, if any of them, are 
profitable.
    As a result of that, they fall victim to being divided into 
ranchettes, if you will, or smaller divisions which destroy the 
concept of large ranches, most importantly destroy the concept 
of open country and open range. And therefore flows of wildlife 
and all kinds of things come into play there. And it has been 
interesting for me over the years to watch the preservationist 
movement attack ranching, only to destroy it in part--to 
therefore destroy the landscape that they were wanting to 
protect.
    Another great influence, and I think negative, is--I call 
it e-commerce wealth, young people with lots of money who find 
romance with the farm or the ranch and want to go out and buy 
one of these pieces of property at three times its productive 
value to shoot the values up, to force a lot of other kinds of 
things to happen in the marketplace of values and estates and 
future acquisitions for actually productive purposes of these 
properties.
    Danny, my question of you--and it is not to be the 
spoiler--but while we are abiding by substantial surpluses in 
Washington at this moment, it does not mean we are awash with 
money available to fund these kinds of programs. We have to 
struggle for every dollar we can get. What has been the average 
cost of a conservation easement to date since the program 
started on a per-acre basis? Do you know that figure?
    Mr. Sells. I do not know the figure.
    The Chairman. I mean, I am sitting here looking at 
background from fiscal years previous and I am seeing, for 
example--and I didn't bring my calculator and it probably would 
not be accurate--but I am looking at 176,254-acres at $329 
million and other kinds of figure talked about; 98-farms, 
10,000-acres, estimated value of $40 million. What are these 
costing the American taxpayer today and is that just a Federal 
presence or is that the total value for conservation easement 
when you incorporate these local or State dollars that might be 
at play there?
    Mr. Sells. Well, that is going to be the total of all the 
various investments that go into it or the total value of the 
land. And, of course, in my comments I indicated that out of 
the $35 million to the Farmland Protection Program that has 
been used thus far, we have leveraged about $190 million of 
State and local dollars. So, the contribution is reasonably 
small. I have seen some numbers that at say we leverage about 
eight dollars for every Federal dollar. I think it is somewhere 
along those lines.
    And, you know, the land ranges hugely in value. And 
naturally, from the standpoint of your State compared to here, 
it is going to be somewhat different, excluding those e-
commerce folks that are able to go out there and pump that 
price up. My own farm in east Tennessee was purchased in the 
early 1960s at about $500 per acre and today I could sell it 
for better than $10,000 an acre.
    The Chairman. Sure.
    Mr. Sells. So, those kinds of values have caused it to 
become a more expensive proposition and, in my mind, actually 
showing a greater need for us to continue within those limited 
budgets trying to prioritize as many dollars as we can to help 
those local programs come over that last hurdle that helps them 
actually get that easement in the bank so that folks can 
actually protect those lands.
    But, my assumption is going to be--and this is a guess, and 
we will get an answer back to you--but my assumption is going 
to be probably in the neighborhood of an easement running on 
average probably somewhere between $2,000 and $3,000--
probably--an acre across the country when you put everything 
together. But, again, I think that would be the total easement 
value and not just the Federal contribution.
    The Chairman. I have no way of calculating that.
    Senator Santorum. Pennsylvania is $1,952, so about $2,000. 
But, in Jim's county, in Montgomery County here, which is the 
third-highest, the average is $5,200 an acre.
    The Chairman. And part of the reason, you have just stated, 
Dan.
    Yes, Professor?
    Mr. Keene. It varies so much from one State to the next and 
from one area to the next.
    The Chairman. The difference we have experienced, certainly 
with these kinds of easements versus scenic-value easements--
usually scenic-value easements are drawn or acquired after you 
have drawn a line around a designated area, and by that line 
you have created a bidding war that shoves up values and the 
last one out gets the highest value, unless you lock a value in 
at the Federal level, which we have never done to date, and I 
have seen entry easements go for as much as 200- to 300-percent 
less than the final easement acquired with it, but that is 
because you have got designated boundaries. That would be less 
the case here.
    Ms. Heinricht. Some of the programs actually include 
discounting of the easements in their programs. Delaware, for 
example, their program, they do appraisals of all the 
properties in the application and then that is made public. And 
then the farmers come in and discount what they will accept.
    The Chairman. Is that against a fixed value or a fixed 
amount of money to be distributed for those acquisitions?
    Ms. Heinricht. Yes, they know how much is going to be spent 
that year.
    The Chairman. So they tend to then bid themselves down into 
the value or the amount?
    Ms. Heinricht. Right. Very few programs are actually paying 
full market value for the easement itself, so that a great deal 
of it is the landowner donating some of that value, and again 
that is where taxes come in, because they get to take a tax 
advantage for that donation.
    The Chairman. I am going to have to conclude this panel or 
we are going to run out of time, folks. We could go on all day 
about this. It is important. Yes, Professor?
    Mr. Keene. Could I make a request? I received the 
invitation to attend this hearing toward the beginning of last 
week and I had a number of other obligations. I wonder if I 
could have a few days to submit my full statement?
    The Chairman. Surely.
    Mr. Keene. I have a copy of my remarks and I have a copy of 
the American Farmland Trust book. I do not know whether you 
have this for your files, but I would like you to have it, 
because I think it does talk about the purchase of conservation 
easements.
    The Chairman. Well, we value your testimony and, of course, 
you can have that time, because we want your full statement be 
a part of the record we are building here.
    Mr. Keene. Thank you.
    The Chairman. Thank you all very much for being with us 
this morning. Let us move to our second panel then. Well, the 
commissioner that was referenced by Senator Santorum, the 
Honorable James Matthews, Commissioner, County of Montgomery 
here in Norristown, Pennsylvania--Janet, how did we decide to 
pronounce your name? Thank you. Janet Oertly, Pennsylvania 
State Conservationist, Natural Resources Conservation Service; 
Omar Beam, recipient, Farmland Protection Program; and Marion 
Bowlan, Executive Director of Pennsylvania Farmlink, from 
Manheim, Pennsylvania.
    Representative Bunt.
    Mr. Bushnell. Good morning. I am Bill Bushnell. I am 
Legislative Assistant to Representative Ray Bunt. The 
representative sends his apologies. He is under the weather 
this morning.
    Senator Santorum. Oh, okay. Thank you.
    The Chairman. Bill?
    Mr. Bushnell. Bushnell.
    The Chariman. Bushnell. All right. Commissioner, this is 
your home turf. Therefore, you are the ranking. We will start 
with you, Commissioner Matthews. Thank you.

    STATEMENT OF JAMES R. MATTHEWS, COMMISSIONER, COUNTY OF 
                MONTGOMERY, PA., NORRISTOWN, PA.

    Mr. Matthews. Thank you, Mr. Chairman. Good morning, 
Senator Santorum, as well.
    Senator Santorum. Good morning.
    Mr. Matthews. Well, being the ranking does not mean the 
most informed, but I am one of those guilty parties the 
professor spoke to. My expertise in the last 30-years has been 
in the area of veterans financing. I have been in residential 
housing for years and I know to what point he was alluding, the 
unintended consequences of the success of the Veterans 
Administration program in populating our suburbs and 
depopulating our farms.
    Having mentioned myself as a guilty party, I am not 
necessarily the most informed party sitting next to the 
representative of our agricultural chair, I believe--isn't he--
in the house, and in the absence of Elizabeth Emlin, who I had 
hoped to have here this morning, of our farmland preservation 
group. I will continue nevertheless. But, before I give my 
prepared comments, I would note something that Mr. Bunt is wont 
to say to folks in this situation.
    He speaks frequently of the fellow who comes down his 
driveway and cannot get back into traffic on the rural roads 
out here in the suburbs in Montgomery County and who becomes a 
rabid advocate of farmland preservation and who gets very, very 
involved after just a few years here on the Montgomery County 
reservation in condemning the conversion of farmland to 
residences, and who then is confronting the farmer across the 
way and trying to do anything he can to preclude the sale of 
that beautiful, pristine farmland. But, without thinking, what 
was the farmer's view before he moved in 2-years prior? He has 
lost his few, as his gentleman is now afraid to lose his. What 
it all comes down to, not to get too urban, but Philadelphia is 
my homeland, is that money seems to be everything. Money seems 
to be the root here of all of these conversions.
    This is the nest egg. This is the stake, especially in the 
climate of low profitability. You are talking--you can allude 
to the IRA, 401(k), the family assets, whatever, but when 
confronted by a voracious consumer appetite for the standard 
suburban dream, it is very difficult for our farmers, and I am 
a member of the Grange, to turn away from the lure of the 
dollar. So, when Mr. Payone and Mr. Cutler, when CNM developers 
and others come forward offering prime dollars, it is very 
difficult. In the absence of what the previous panel mentioned, 
I think the three priorities were funding, funding, funding, I 
will add funding, speaking for Montgomery County, as another 
priority.
    We need more money to offer the farmers as a compensation, 
if you will, economically for the allure of the quick dollar 
from the developers who are offering so much per acre right now 
to develop that farmland into housing. So, yes, we need more in 
the way of funding. We have had some catastrophic losses of our 
own. I am deviating from prepared statements here. The 
Matthews, as you know, do not go very well with prepared 
statements.
    The Chairman. We understand you have a black sheep in the 
family.
    Mr. Matthews. I understand. That is true. So I will get to 
the nuts and bolts here. We have 462 farms in Montgomery County 
and only 41,500-acres-in-farms. That was based on a 1997 census 
figure. So, we have lost over 30,000-farmland-acres and 250-
farms in the last 20-years. In the last 50-years, we have lost 
120,000-farmland-acres and over 2,300-farms. Obviously, 
developmental pressure continues and we are fearing that over 
the next 20-years our population is going to go up 86,000 
folks, which is a 12-percent increase in our current 
population.
    We certainly have a viable farming community and we sell 
annually an immense amount, $37 million in agricultural 
products in Montgomery County. That is not big by Idaho 
standards, but we are talking something important in Montgomery 
County here, the aesthetics as well as the production. We have 
a farmland preservation program that has been very successful. 
We purchase development rights, and it is one of the best tools 
we have for preserving our community.
    Since 1989, we have preserved 56 farms and a total of 
4,650-acres. This is only 11-percent of our county's existing 
farmland, only 11-percent, so we sincerely have to preserve 
more as time allows. The enterprises are substantial: dairy; 
beef; buffalo; poultry; orchards; Christmas trees; feed process 
centers, etc.. There is no question we are diverse here, but we 
need to pay farmers high land values because of the high market 
value of the land, and we consider it worth the cost.
    Quite honestly, yes, I would lean to the aesthetic side of 
the argument, as opposed to the produce and to the production 
side. Needless to say, our port in Philadelphia is quite 
active. The figures run into the hundreds of millions of fruit 
and vegetable products we bring in from South America right 
here on our eastern shore here in Philadelphia. But 
aesthetically, as the professor so ably stated, once it is 
concreted over, it is gone.
    Now, the Federal Farmland Protection Program, we are very 
much in favor of it. It has been available, as you know, for 
three rounds, since 1996. The Pennsylvania Department of 
Agriculture forwards the information to us each time a new 
round is announced and each county is encouraged to submit 
applications, especially if the farms contain a large amount of 
soils in agricultural capability classes I and II and were 
relatively large in size, but these measurements discourage 
Montgomery County farmers.
    We have excellent agricultural production, but there are 
virtually no class I soils anywhere in the county, nor are our 
farms as large as those in other parts of the State. Montgomery 
County's median farm size of 36-acres ranked 65th out of 67 
counties. So, you talk about Montana, we have been diced and 
sliced for a long time now.
    We strongly encourage the Federal Government, strongly, to 
support farmland preservation in areas like ours under great 
developmental pressure. If we do not save the farmland now, 
well, etc., etc.. We all know. It has become a refrain in 
Pennsylvania, the most popular expression referring to Mr. 
Hilton and his work, Save Our Land, Save Our Towns, and those 
phrases are interchangeable. We have to act now and we could 
use, as two of the three earlier speakers alluded to, funding, 
funding, funding.
    The Chairman. Commissioner, thank you. Bill, we will now 
turn to you, speaking on behalf of Representative Bunt, and 
your full statement, as his, will become part of the record, as 
well.

     STATEMENT OF BILL BUSHNELL, LEGISLATIVE ASSISTANT TO 
 REPRESENTATIVE RAYMOND BUNT, JR., 147TH DISTRICT, MONTGOMERY 
 COUNTY, HOUSE OF REPRESENTATIVES, COMMONWEALTH OF PENNSYLVANIA

    Mr. Bushnell. Sure. Yes. Thank you, Mr. Chairman and 
Senator Santorum. I am Bill Bushnell. I am District Legislative 
Assistant to State Representative Raymond Bunt, Chairman of the 
House Agricultural Affairs Committee. I will read his prepared 
statement.
    We, in Pennsylvania, take farmland preservation very 
seriously and have since 1988 when the legislation was approved 
to create our statewide program. Subsequently, our program was 
funded by a voter-approved $100 million bond issue. This voter 
referendum notably passed overwhelmingly. In addition, later 
legislation earmarked two cents per pack of our State cigarette 
tax for the program.
    More recently, there was a $43 million special 
appropriation as part of the 1999-2000 State budget and a 
commitment of an additional $20 million per year for the next 
5-years. Furthermore, since this is a cooperative State/county 
program, it is to their advantage for counties to commit monies 
of their own. Most have responded and there have been a total 
of $93.7 million, county dollars, committed to the effort. 
Recently, because of municipal interest, our law was amended to 
allow local governments to participate in the effort by 
contributing funds of their own.
    To date, the States and counties have spent a total of 
$334.4 million for permanent easements on farmland. Combine 
this with the fact that we are positioned to spend a minimum of 
$45 million a year of State monies to preserve our valuable 
farmland for the next 5-years, and I would guess that this is a 
commitment to a farmland preservation unmatched by any other 
State. As a result, I am pleased to be able to report that, to 
date, Pennsylvania has perpetually preserved 1,381-farms, 
comprising over 170,000-acres in 42 county statewide. Even so, 
new applications are being received at the rate of nearly 500-
per-year.
    This is in addition to the approximately 1,400-farms and 
172,700-acres in the pipeline or on the waiting list statewide. 
In other words, even with all of our success, we currently have 
more farms that have applied and are waiting than we have 
preserved in the past 10-years. In most counties, there is a 3- 
to 5-year backlog of farms. I offer these statistics as 
dramatic evidence that preserving farmland is of the highest 
priority to both our farmers and our citizenry.
    The success of and demand for being included in the program 
proves that there is both a need and interest for it to 
continue, and the Pennsylvania General Assembly continues to 
wholeheartedly support it. With respect to the Federal program, 
I want to acknowledge that we have received Federal money in 
three of the past 5-years, totaling $2.2 million. This 
additional money was most appreciated and, as a supplement to 
our State funding, was well-spent.
    Nonetheless, I have demonstrated that our State money 
dwarfs what we receive and, more importantly, our demand still 
far exceeds what the State alone can provide. Therefore, any 
additional Federal dollars would be most welcome. Finally, as 
you consider this issue, I certainly hope that Pennsylvania's 
commitment and success is viewed as a reason to increase our 
allocation and not an indication that we are either willing to 
or capable of meeting the demands for funding on our own--with 
our program counties--are rewarded with greater matching funds 
for the dollars they put into the program.
    I suggest that States making a financial commitment of 
their own should be likewise rewarded with a higher percentage 
of the total Federal dollars. Once again, I would like to thank 
you for the opportunity to share Pennsylvania's perspective on 
preserving farmland forever.
    Thank you.
    [The prepared statement of Mr. Bunt can be found in the 
appendix on page 51.]
    The Chairman. Bill, speaking on behalf of Representative 
Bunt, let me thank you very much for being here today. Now let 
me turn to Janet Oertly, Pennsylvania State Conservationist, 
Natural Resources Conservation Service, USDA.
    Welcome.

       STATEMENT OF JANET L. OERTLY, PENNSYLVANIA STATE 
CONSERVATIONIST, NATURAL RESOURCES CONSERVATION SERVICE, USDA, 
                       PHILADELPHIA, PA.

    Ms. Oertly. Good morning. Mr. Chairman and Senator 
Santorum, thank you for inviting me to discuss the use of the 
Farmland Protection Program here in Pennsylvania. I am Janet 
Oertly. I am the State Conservationist for Pennsylvania, for 
the Natural Resources Conservation Service. I would like to 
begin by recognizing the efforts and leadership of members of 
this subcommittee, especially Senator Santorum, for taking an 
active role on this issue.
    Pennsylvania is a rich diversity of landscapes created by 
its location, climate and soils. This rich diversity has 
allowed Pennsylvania farmers to provide food and fiber to our 
Nation for over 200-years. Sustaining farms in Pennsylvania for 
centuries has been possible through sound land stewardship. 
Because of this tradition of land stewardship, it is no 
surprise to me, a native Pennsylvanian, that Pennsylvania is 
one of the leaders in protecting farmland in this Nation.
    Pennsylvania has one of the highest rural populations in 
the Nation. Farmers on the edge of urban development face many 
challenges. As a response to the need to protect Pennsylvania's 
largest industry, agriculture, the State has used Federal 
programs, such as the Farmland Protection Program, to enhance 
local and State programs. Governor Ridge's 21st century 
Commission identified sprawl as the most important 
environmental issue in the State.
    The recent passage of Pennsylvania's Growing Greener and 
Growing Smarter legislation provides a significant increase in 
State funding and local planning for farmland protection. In 
Pennsylvania, the Federal Farmland Protection Program funds 
have been used to leverage funds from the State and local 
Government entities that have Farmland Protection Programs.
    The program has facilitated conservation partnerships with 
the State and local Government entities to acquire perpetual 
conservation easements. It is one part of a broader effort to 
protect farmland from urbanization, and helps to maintain a 
healthy environment and a sustainable rural economy. The 
national program was originally funded at a level of $35 
million. Pennsylvania received over $3 million of that national 
funding.
    With these funds, 57 farms representing 11,419-acres-of-
farmland in Pennsylvania will be permanently protected and will 
continue to remain in agricultural uses. In addition, the 
Federal investment in farmland protection was matched by about 
$24 million in State and local contributions. This represents 
that for every Federal farmland protection dollar sent to 
Pennsylvania, there has been another eight dollars in State and 
local funds to match this investment.
    I might add that each of these farms has a complete 
conservation plan and the owners have committed to a schedule 
for complete implementation. The availability of the technical 
assistance funding needed to help farmers plan and implement 
these plans is an important part of the program in 
Pennsylvania. Allow me to describe one example of the program 
in southeastern Pennsylvania. Three farms in Berks County's 
scenic and productive Oley Valley added over 350-acres-of-
permanently-protected-farmland to the 28-farm, 3,600-acre block 
of farmland in the valley.
    The Oley Valley has been one of the region's most important 
agricultural areas since originally being cleared by German 
farmers over 200-years ago. The Brown, Mast and Rothermill, 
Hopewood and Ford farms, added with help from 1998 Farmland 
Protection Program funds, are all adjacent to other permanently 
protected farms. The Farmland Protection Program is making 
progress in protecting farmland, but as we have heard the needs 
are great and more resources are needed.
    As Mr. Sells indicated on the earlier panel, our agency is 
committed to working with you, Mr. Chairman, and the members of 
this committee to continue funding and supporting for the 
program so that we can maximize the benefits of the State and 
local initiatives. I look forward to working with you on this 
issue. We need to extend the funding authorization for the 
Farmland Protection Program to make it work. And I will be 
happy to answer any questions that members might have and thank 
you again for the opportunity.
    [The prepared statement of Ms. Oertly can be found in the 
appendix on page 53.]
    The Chairman. Janet, thank you very much. Now we turn to 
Mr. Omar Beam. You are unique to the panel, and I say that 
because we have heard from advocates and those who put the 
programs together. Now it is pleasing to hear from a recipient 
of the Farmland Protection Program. Nice to have you with us.

STATEMENT OF OMAR BEAM, RECIPIENT, FARMLAND PROTECTION PROGRAM, 
                         ELVERSON, PA.

    Mr. Beam. Good morning, Mr. Chairman and Rick. My wife and 
I--my wife is here in the audience; I brought her along--we 
have a family farm. We went into the program in 1997. We sold a 
little over 200-acres of our development rights to the State. 
The county is out with a new book and it is really interesting. 
Chester County just come off--it is really--I wish they had had 
something like this printed when we sold our development right, 
but it gives you a lot of guidelines for tax structure and 
everything as you sell your development rights.
    We started farming in 1950 and my, how things have changed 
since then. My dad was a farmer, but he had come from New 
Jersey. And he told me, when I wanted to start farming--he said 
my advice to you would be if you can't do anything else, is 
what they said when he was a boy, if you can't do anything 
else, you can farm, because anybody can walk behind the plow 
and handle a fork. But, he says, the day is coming now, if you 
can't farm, you better do something else, because it became so 
much like a business and it was altogether different. There 
were so many decisions that had to be made.
    When we started out, and the question then, when we come to 
a certain age, how do we retire? I had a son that came back 
from Penn State, and when he came back I soon saw that his 
education and his decisions around the farm there, that we 
needed somebody in leadership with a different viewpoint on 
things than what I had when I was farming.
    And the sad part of it is, about all of these problems, is 
the farmers in our community--and by the way I am from Chester 
County. I better make that plain. There has been a lot about 
Lancaster County. But we receive the dust that blows over the 
hill in Chester County and that is what keeps us afloat. But 
anyhow, the farmers were bidding against farmers, and that is a 
good way to wean out the farmers that have difficulty surviving 
or are poor managers, by bidding against each other, because 
the poor farmer who does not make the right decision is going 
to soon be left in the dust.
    But then when we came and we had to bid against a 
developer, things really changed, in that changed the whole 
structure in our community. The developers came out there and 
they all wanted the best land, class I and II and III, and we 
all know that class I and II is the easiest to develop. That is 
the land he wanted and he could afford to pay more than a 
farmer.
    The thing of it is with a farmer, if you plant an acre of 
corn and you get 150 or 200 bushels to the acre and you get two 
dollars a bushel, there is only so much income you can get from 
that one acre. But you take a developer, he can easily add 
$5,000-to-$10,000 per lot because he is buying the best land 
and it is easier to develop, and people are moving out and that 
is just what they want.
    We have a lot of Amish people not too far from our 
community, and the thing that they are doing is dividing their 
farms up because they can no longer afford to buy more land and 
more farms. And this is going to hurt us. I have been involved 
in decisions in the township--well, I have been a township 
supervisor 30-plus-years. I won't say how many. But anyhow, 
this is going to hurt us because you are going to get more 
pollution. I'd rather them spread their manure on 100-acres. 
They are spreading it now on 30-acres and there are many ways 
that is not the answer to the problems. And this is the route 
they are taking because they do not want to carry the debt.
    We have to realize, when we started farming, I remember 
after the first 10-years we were feeding like 70-head-of-
cattle, we had 200-hogs, we farmed 100-acres and we thought we 
were really getting up there. But, when I retired, we were 
farming 600-acres and we had about 3,000-hogs and we also had 
several hundred cattle. So, for my son to take over, it made it 
difficult. And we have some difficult decisions to make. And we 
wanted to leave the farm because all of our assets, of my wife 
and I, was tied up in the farm. And yet my son wanted to keep 
on farming, and we do have some good soil. And another thing 
that was a plus to us, we had four or five neighbors that had 
sold their development rights, which makes a nice block there 
in our community.
    So, the business decisions today of a farm, a lot of them 
are made in the office. Farming is so much different and it 
takes so much money, so for us to look at the development 
rights in order to hand the farm over to my son, hopefully it 
works out someday that he can do that. But the last year has 
been a drought year and the low hog prices and so on and with 
the low grain prices, it has been making it kind of difficult.
    But I think when a farmer decides what he wants to do, 
there are several things he needs to look at. And it has been 
talked about; one is money, one is family and one is friends. 
Family is important to my wife and I, and my son likes to farm 
and he is a good farmer. He was a good student at school and we 
want to try to help him out. And friends, community, you know, 
if we go back and one of the first Commandments we have is love 
your neighbor as yourself. Well, today that is not the thing 
most of us do.
    I could have sold that farm, 240-acres, and put a 
development in there. But we have a farm that has went that 
route, and I am not condemning him. But the thing of it is they 
had just built a new school in our community. Now that school 
is being filled up because there are 200-and-some homes going 
into his farm there and it raises the taxes for the farmers 
that is already there.
    So, my wife and I took a look at that. We took a look at 
the family situation and we took a look at the money. We didn't 
get the most money by going this route, but that is not the 
problem. The problem is we want to leave this world or leave 
this community with a lot of friends involved. My wife and I 
have always loved to work the soil, raise the crops, harvest 
the crops. That has really been important to us.
    So, selling our land for the development rights was a way 
out for us that we could do this, and I am happy we made the 
decision. I am glad of it. So, thanks. If you have any 
questions later on, I will be glad to answer them.
    The Chariman. Omar, thank you very much for that testimony. 
That adds a valuable perspective to the record we are trying to 
develop. Now let me turn to Marion Bowlan, Executive Director, 
Pennsylvania Farmlink.
    Welcome.

 STATEMENT OF MARION BOWLAN, EXECUTIVE DIRECTOR, PENNSYLVANIA 
                     FARMLINK, MANHEIM, PA.

    Ms. Bowlan. Good morning, Mr. Chairman, Senator Santorum. 
Let me begin by giving you some background information on 
myself. I am a third generation farmer from Lancaster County 
with experience in both beef and vegetable production.
    The Chairman. Then let me apologize. I said Mr. Beam was 
the only farmer before us this morning. Not true.
    Ms. Bowlan. I have two roles.
    The Chairman. All right. Thank you.
    Ms. Bowlan. We sell our hormone and antibiotic-free beef 
directly to consumers. I am also the Executive Director of 
Pennsylvania Farmlink, which is a nonprofit organization that 
works with beginning and retiring farmers to create more 
farming opportunities in Pennsylvania. Farmlink is part of the 
larger National Farm Transition Network that works to establish 
the next generation of farmers.
    In addition to that, I am also a member of USDA's National 
Commission on Small Farms and I am a current member of the USDA 
Small Farm Advisory Committee. So, that is some background on 
me. I want to talk to you about both my professional and 
personal experience and some recommendations that I have for 
the farmland preservation program. I would really like to focus 
my talk on the very human problems that currently are not 
addressed by this program.
    I want to begin by telling you a little bit about 
Pennsylvania Farmlink and its work with beginning and retiring 
farmers, with the mission of creating farming opportunities for 
the next generation. We provide regional seminars on passing 
the farm on to the next generation. We provide new-and 
beginning-farmer workshops and marketing workshops that are 
targeted to improve the farmer's bottom line.
    We also operate a linking service that matches farm owners 
with people who want to get into farming. Although we are a 
small agency, we have been successful in making a difference in 
the lives of many farmers by getting them to realize they need 
to plan for the future of their families and their farms. I 
wanted to let you know about our organization so I could relate 
to you what I have encountered in my professional work.
    The critical time for a farm to go out of farming is when 
the existing farmer is thinking about retirement or is already 
retired. Particularly if the children do not want to farm or 
take over the farm or if there are siblings who do not agree on 
what should happen to the farm, the farm is vulnerable.
    Let me explain. I recently worked with a family that had 
two sons that were interested in farming. Both had off-farm 
jobs and were helping their parents in their spare time. The 
parents were retirement age, but couldn't afford to move off 
the farm so that their sons could take over. I suggested that 
they preserve their farm and use the sale of the conservation 
easements for their retirement needs.
    The family applied for farmland preservation funds, but 
they are not at the top of the list because of soil types and 
proximity to other development. I am not disputing these 
factors and agree that soil types and development proximity are 
important considerations. What I would like you to consider is 
the human element. Is there an individual who wants to take 
over the farm? Could we preserve this farm if we took into 
account the family circumstances? Is there a farm succession 
plan? Do we have a beginning farmer who wants to farm the land?
    These farms are businesses that are run by human beings and 
we need to take into account their human needs. Unfortunately, 
these human issues currently receive little or no consideration 
in selecting the farms that are being preserved. I contend that 
they should. Arecent Penn State study indicates that of all the 
farmland sold in southeastern Pennsylvania in the last 10-
years, only 23-percent remained in agriculture.
    This is occurring in spite of the best farmland 
preservation program in the Nation, and I might add that our 
farm has been on the waiting list for selling our development 
rights in Lancaster County for 7-years. Yes, additional funding 
is an issue and is needed. Farmers in Pennsylvania are very 
interested in preservation, but if the funding is not available 
or if their family situation is pressing, the temptation to 
sell to developers is also present.
    I would contend that increasing funding for preservation 
programs is not the only issue. With the family I just 
discussed, what will happen? The family cannot afford to move 
off the farm and retire unless they sell the farm. Even though 
they may want to give their sons the opportunity to farm, they 
may decide to sell the farm at market value because, in the 
long run, that may be what is best for their family. If we have 
the opportunity to get the next generation on the farm, how do 
we help?
    Everyone agrees we want our farmland to be used and be 
productive. The intention of the program is to preserve 
farmland and not just open space. How do we decide who will be 
our next generation of farmers? That brings into focus a big 
problem that we face in years to come. In the Nation, we have 
three times as many farmers over 65 as under 35. Recent census 
of agriculture statistics indicate that farmers under the age 
of 35 decreased an alarming 46.4-percent from 1987 to 1997.
    Today's slim profit margins make it very difficult for a 
new generation of farmers to get started. How are we going to 
help? One of the ways we can help is to tie farmland 
preservation efforts into farm succession efforts. I made these 
recommendations as a member of the National Commission on Small 
Farms and my current work with the USDA Small Farm Advisory 
Committee. They are still pertinent.
    Why don't we provide incentives to farm families to 
transition their farm to a new generation of farmers, related 
or not, by giving them extra points for developing an active 
plan to pass their farm on to an enterprising new farmer? This 
would give an extra boost to the family I just mentioned and 
would put them higher up on the waiting list for preservation. 
It just may save the farm for this family and others like them.
    As we all know, we make decisions based on our own family's 
circumstances. The independent farmers of this Nation need your 
help in securing a new generation of farmers who can establish 
productive, profitable livelihoods and retain our most precious 
resource, our farmland. Now I want to switch gears a little bit 
and talk about my own individual situation.
    Largely through the efforts of my mother, my husband and I 
were able to purchase the farm that came down through her 
family. We have farmed it for the last 12-years. We both took 
off-farm jobs to provide for the economic security our family 
needs. We have two children. At least one is interested in 
farming. We decided to preserve our farm 7-years ago and have 
been on the waiting list ever since.
    This year, because of an extra infusion of farmland 
preservation funds, some Federal, Lancaster County is working 
on their backlog of applicants. We may yet see our farm 
preserved. Either my son or my daughter will get the 
opportunity, and if they do not want it, some other 
enterprising individual will. What three generations have 
worked to protect while deriving income from it will go on. 
What better legacy can we leave behind?
    I have also worked to try to get my siblings to agree to 
preserve the land my father and mother farmed for 55-years and 
where he still lives. My mother died 4-years ago. Some of my 
siblings want the money they could get from the sale of the 
farm at its market value. Some want to see it stay a farm. My 
father feels caught in the middle. He doesn't want to decide. 
How do we assist families with these decisions? These are big, 
once-in-a-lifetime decisions. How can we help families make 
these decisions about farmland protection?
    Certainly, providing educational assistance and farm 
succession planning assistance similar to some of the services 
that the Farmlink programs will help. And, I might add, we need 
your financial help, as well. Pennsylvania Farmlink and other 
linking programs across the country work with families to 
transition their farms to the next generation. We know that 
farms need farmers to farm them. Help us help those farm 
families put the pieces together so they can transition their 
farm to the next generation and for generations to come.
    Thank you.
    [The prepared statement of Ms. Bowlan can be found in the 
appendix on page 58.]
    The Chariman. Well, thank you very much for that valuable 
testimony. That is the human dimension that we thought of in, I 
think, substantially different terms in the concept of creating 
this program and what you have brought to us. I think what you 
are proposing is growing as a concept to be incorporated, but 
it is one that clearly is not there at this time. Commissioner, 
you talk about the lands here in this county that you have 
participated in helping protect. Have those farms been blocked 
or are they contiguous? Have you looked at that as an 
overriding concept in trying to create blocks of land?
    Mr. Matthews. It is defined areas, target areas, that are 
eligible, and it is, obviously, substantially the western 
portion of the county.
    The Chariman. How successful have you been in bringing 
about contiguous acreages?
    Mr. Matthews. I would say, based on my recollection of the 
mapping, that we have no more than 8- to 10-percent contiguous, 
and that might even be an exaggeration, Senator. Again, it is a 
targeted area. We have not been that successful in 
preservation, an 11-percent area, but it is more or less again 
the western portion of the county, so again very little 
contiguous, 5-percent, I would say, tops.
    Our problem remains the cost per acre, the agricultural 
value versus the market value that has been addressed so 
frequently this morning.
    The Chairman. Have you, as a Commissioner, had personal 
dealings in these properties, knowing the people involved? I 
mean that from the standpoint of being able to respond to the 
next question. How many of these properties or owners were 
driven by problems of estate tax and the general problems of 
ownership transition?
    Mr. Matthews. I would not have that personal knowledge, 
Senator.
    The Chariman. All right. Janet, apart from authorizing more 
money, with your experience on the ground, what can the 
Committee do to make farmland protection more efficient than 
the current program?
    Ms. Oertly. Well, I think we have used all the flexibility 
that the Committee afforded us in the current program in the 
way we operate it in Pennsylvania in allowing us to utilize the 
State and local easement process that is already in place in 
Pennsylvania. So, in Pennsylvania it operates fairly much as a 
seamless system, because we have looked at their easement 
documents. They add a Federal reversionary clause into their 
easements and we have just piggy-backed on what they are doing.
    We also look at the criteria that they are using and we 
have tried to mirror that. Probably, from what I have heard 
from my State counterparts, something that might make it 
operate more efficiently is if they knew for certain. There was 
going to be an annual Federal Farmland Protection Program. For 
example, in Senator's Santorum's proposal, if there were going 
to be $50 million available every year, then they know it is 
there, as opposed to how much is it going to be. It is almost 
like a given amount that they know is coming.
    And I strongly support the idea of local and State input, 
which we have tried to do very much in Pennsylvania, so they 
know where we are coming from and can prepare for it. If there 
is a set amount that is coming and a set timeline as to when, 
then they can prepare. Sometimes when the program announcement 
has come out, there have not been enough days perhaps for them 
to get everything prepared that they would like to in order to 
submit their priority list of farms.
    The Chariman. OK. Thank you. Rick, questions?
    Senator Santorum. Yes, thank you. And thank you all for 
your testimony. And just a couple of points. Mr. Beam, your 
point about the Amish is a very important one. Do the Amish 
participate in this program? I would think they don't, but do 
they?
    Ms. Oertly. I think they may through the trust, as opposed 
to the Government.
    Ms. Bowlan. They do in Lancaster County through the 
Farmland Trust.
    Senator Santorum. They do? And the reason I mentioned that 
is if they would, I am sure they wouldn't participate through 
the Federal Government or through the State government, but 
that adds to maybe some of the points of the flexibility of the 
program. Do you have any comments about Commissioner Matthew's 
comments about the fact that there are no class I soils here 
and they do not have large farms and the skewing of some of the 
criteria that may be out there, and the point about maybe some 
more flexible criteria to be able to deal with some of the 
different situations that we have?
    Ms. Oertly. Well, what we have tried to do in the Federal 
program is we actually go down to land capability class III and 
consider the soils of statewide importance. So, we do look at 
land capability classes I, II and III in our criteria, which 
brings it down a little bit closer to what you are looking at 
in Montgomery County. We do look at the number of acres 
involved, that is where the size of the farm would actually 
come into play. So, we do look at that.
    We did, in the very last round, take a look at the fact 
that when you look at some of the soils in particular and if 
you listed all of the farms in a priority order, it becomes 
very difficult to get any Federal dollars outside of a specific 
area, because of the predominance of class I soils, and the 
amount of money that the local county program may be offering. 
They would ask for less of the Federal dollars. So, we looked 
at the uniform planning regions across the State and set as one 
of our criteria that we would take the top farm offered from 
each of those 10 planning regions, because we were hearing a 
lot from some of the counties in the western half of the State, 
saying, ``We are not able to compete to get some of these 
funds.''
    By doing that, they all sent in their priority farms and we 
took the top farm that ranked out from each of those uniform 
planning regions. And that was flexibility we already had.
    Senator Santorum. OK. Any of the concerns that Ms. Bowlan 
brought up? Those are not really decisions you would make on 
the Federal level. Those would be more the local communities 
making those decisions, using those factors?
    Ms. Oertly. Yes.
    Senator Santorum. Jim, are you aware of any? Is that a 
factor in looking at what farms you are going to preserve? Is 
the situation the family may be in or the pressure they may be 
under?
    Mr. Matthews. No, we look at it more as to locale as a 
priority. We are trying to stop certain movement in certain 
areas where there is a lot of congestion and just grab that 
piece of land right there. That is our number one priority 
right now, is the locale, what is the front line of development 
in that area, where does it look like it is going, and we will 
lean more in that direction--again, our problem being the 
dollars involved.
    It is difficult--I can't speak for Mr. Beam, but I know it 
is difficult for many of the farmers I have spoken to. Senator 
Craig asked me how many of these I have had person-to-person 
contact with. Not those who did, but those who were considering 
it, I have talked to a good many farmers and they are afraid of 
the necessity to sell at some of the very high prices they are 
being offered for their land. And they are afraid, where they 
had not thought about it in the past, they are thinking about 
it now and how close can we come. Well, once you get up to 
these land values of $14,000, $16,000, $17,000 an acre, there 
is no way we can compete.
    Senator Santorum. Thank you, Mr. Chairman. I appreciate 
your testimony, everybody.
    The Chairman. Jim, one of the things you just mentioned is 
critical. Most farmers are farmers at heart. I know I grew up 
and actively farmed and ranched until I changed locations and 
went indoors, where there is no heavy lifting, at least that is 
what some people think about the work that Rick and I are now 
in. But, most farmers don't want to sell their land for 
development. They don't really look at it from that standpoint 
if they are long-term farmers, and yet, as has been stated, it 
is their retirement. That is how the family plans for its 
retirement. It doesn't go out and buy retirement programs and 
that. It usually considers, at some point in time, termination 
of active farming and moving into retirement and the 
accumulation of assets and the ability to transfer those assets 
in a way that sustains the property in a farming environment 
for--especially if it is for a family member, and then to be 
able to live from them in what most farmers would think is a 
lifestyle they would like to have at the end of their work 
period in life.
    It is a very real frustration. I am not sure how we 
incorporate the human factor at this time. I think you brought 
up an extremely valuable point, Marion, and it is one that is--
it is something that is not measurable. It is emotional and it 
is real. I know it is real. I have been there with my family, 
and yet at the same time when we are asking--whether it is USDA 
or Soil Conservation Service or whether it is State and local 
communities--to make judgments based on aesthetics or open 
space or traffic patterns or development directions, those are 
fairly measurable and predictable. That is something that, to 
get into some of these other values and to make that a 
criteria, how do we do that successful with the program?
    Ms. Bowlan. Could I comment on that?
    The Chairman. Please do.
    Ms. Bowlan. One of the recommendations that we put in the 
report from the National Small Farm Commission was that, in 
addition to some of these other practices like conservation 
practices that farmers are required to do to get farming 
preservation money perhaps, they look at a farm succession plan 
as part of the criteria and give extra points for that. Then 
you know that the family has actively planned for it to go to 
the next generation. And it doesn't necessarily need to be to a 
family member, but just to another Farmer.
    The Chariman. OK. That would be a factor that would fit 
there. That is a more measurable or fixed concept, that it just 
stays in agriculture. Let me ask this question of you, because 
of the value of land and even with conservation easements 
acquired--and you said it well, Mr. Beam, the selling of 
development rights. That is another term to be used here. But 
still anticipating the land would stay in agriculture, is there 
any consideration or is there any value or requirement placed 
in the criteria that would suggest that in transition the lands 
sell for a value minus those rights that were acquired?
    If I am out there looking for farmland and I am looking at 
land that the development rights have been sold off from, can I 
expect a different market value than those that might not be? 
What has been your experience here in the transition, let's say 
out of family but to another farmer? Can anyone react to that? 
Have we changed the character of the marketing of that 
property?
    Mr. Beam. It has been an our area that it is amazing how 
much the farmers are willing to pay because they are selling 
farms there that have been reserved now for $4,000 and $5,000 
an acre. And developers come in there, you know. They are 
mostly paying about $10,000 now. But I was surprised, because 
they had told us, the mortgage companies and everybody, because 
when they finance a farm that has these rights sold off, which 
is their option--if the farmer can't make it, that they can 
unload--that they were selling quite that high, but that is 
what it has been.
    The Chariman. Still selling. OK.
    Mr. Beam. And there is plenty of demand. And there is one 
point that I don't think was brought up yet, and that is every 
time there is a farm sold in the community, it is just another 
vote for all them service businesses in that area to put him 
out of business or close his doors, because we need that guy 
that hauls the milk. We need that guys that sells the tires. We 
need that machinery dealer down there when something goes bad. 
And every time this farmer gets less, his business is dropping 
off, and therefore it is just another vote. So, this thing 
ripples out over the communities a lot more than a lot of 
people think.
    The Chairman. That is well-spoken. It is very true. Most 
small agricultural communities have experienced that as the 
character of agricultural was changed. Well, once again let me 
thank all of our panelists for being with us today, taking time 
to help us build a record on this issue. I think that really it 
is a work in progress, and I say that based on the experiences 
you have all had, obviously having a State that has led on this 
issue has been, by all appearances, extremely valuable. And, as 
Rick has said, it has had an influence on the Federal policy, 
without question.
    At the same time, as we tend to develop this and my guess 
is we will, as its popularity grows, as its understanding grows 
to preserve and maintain, we will have even greater pressure 
put on us at the Federal level to not only increase the 
funding, but adjust the program, in part, as you suggested, 
Marion, to measure at least in determining other values. But, 
again, thank you all very much for coming before the Committee.
    My guess is we are out of time and something about me 
having to catch a train, but the crowd doesn't appear to be 
surging out there at the moment for access to microphones. So, 
with that, I will adjourn the Subcommittee.
    [Whereupon, at 12:01 p.m., the Subcommittee was adjourned.]
      
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