    [From the U.S. Government Printing Office, www.gpo.gov]

           16#3 BY THE COMPTROLLER GENERAL.
                                   port                'To The Congress
                        OF THE UNITED-STATES

                                                                                                      COASTAL ZONE
                                                                                                     INFORMATION CENTER
                      --Preserving America s Farmland-
                        A Goal The Federal Government
                        Should Support

                        Concern is growing about the amount of farmland
                        being converted to urban and other nonagricultural
                        uses. Estimates of the loss range from 3 to 5 mil-
                        lion acres a year, of which roughly half is consi-
                        dered to be prime farmland particularly suitable
                        for cultivation.

                        Available evidence suggests that agricultural tech
                        nology and resources--such as new crop varieties, ir-
                        rigation, fertilizer, and energy--have limitations and
                        cannot indefinitely compensate for farmland
                        losses.

                        Governmental control of our Nation's land'        use tra-
                        ditionally rests at the State and local levels, but the
                        Federal Government can be more supportive of ef-
                        forts to preserve farmland, especially prime farm-
          .012          land, --through its own programs,
                              --by formulating a national policy and goals
                               for preserving farmland, and

           0                  --by delineating what the Federal role should
                                be in guiding and assisting State andlocal ef-
                                forts to retain farmland.
                             @@I&D S-P4   'N

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                HD
                171                          0                                                                                CED-79-109
                  E75                                                                                             SEPTEMBER 20, 1979
                        Re

                1979

                  .4,

                                COMPTROLLER GENERAL OF THE UNITED STATES
                                         WASHINGTON, O.C. 20548

               Eliq rT.9

                 B-114833                              U QV DEPARTMENT OF COMMERCE NOAA
                                                       COASTAL SERVICES CENTER
                                    COASTAL ZONE       2234 SOUTH HOBS)ON AVENUE
                                    INFORMATION CENTERHARLESTON   SC 29405-24 13

                 To the President of the Senate and the
                 Speaker of the House of Representatives

                      This report discusses an issue of growing concern--the
                 conversion of this Nation's farmland, especia lly our best or
                 prime farmland, to nonagricultural uses. It recommends that
                 the.Congress formulate a national policy on the retention and
                 protection of prime and other farmland which coul-d

                      --serve as an effective basis for guiding and--
                        supporting land-use decisions by Federal-
                        agencies and land-use planning and decisions..-
                        by State and localgovernments,

                      --encourage intergovernmental cooperation and
                        coordination in managing-one of our Nation-'_s
                        most important resources, and
                      --promote public investment patterns that wih------
                        minimize adverse impacts on prime farmland.

                      We are sending copies of this report to the Director,
                 Office of Management and Budget; the Secretaries of Agricul.7
                 ture, Defense, Transportation, and Housing and Urban Develop-
                 ment; the Chairman, Council on Environmental Quality; and the
                 Administrator, Environmental Protection Agency.

       :4--

       0                                      Comptroller General
                                              of the United States

        q)
                                  Property of CSC LibrarY

                COMPTROLLER GENERAL'S              PRESERVING AMERICA'S FARMLAND--
                REPORT TO THE CONGRESS             A GOAL THE FEDERAL GOVERNMENT
                                                   SHOULD SUPPORT

                         D I G E S T

                         One of our Nation's major natural resources
                         is farmlarid--especially prime farmland hav-
                         ing soils particularly suitable for cultiva-
                         tion. An accurate measure of the amount of
                         existing prime farmland is not available but
                         an estimate of this amount can be obtained
                         from the estimated acreage included in the
                         Department of Agriculture's top two land
                         capability classes. In 1975 about 338 mil-
                         lion acres of all types of rural land, in-
                         cluding 221 million acres of cropland, were
                         in these classes. (See P. 2.)

                         Farmland is essential to our abundant agri-
                         cultural production which has not only made
                         U.S. citizens among the best fed in the
                         world, but has been a positive contributor
                         to our balance of payments and to our humani-
                         tarian commitments to developing countries.

                         Each year, however, an estimated 3 to 5 mil-
                         lion acres of U.S. farmlands are urbanized
                         or used for other nonfarming purposes. About
                         half of these lands are those having soils
                         particularly suitable for cultivation.
                         These land losses, coupled with the leveling
                         off of agricultural productivity rates, pose
                         tough and unsettling questions about the
                         Nation's long-term ability to maintain its
                         roles as an economical food and feed producer
                         and the major competitive exporter of farm
                         products to the world. (See p. 5.)

                         CONCERN ABOUT FARMLAND LOSSES IS
                         GROWING, BUT IS NOT UNIVERSALLY SHARED

                         Until the mid-1970s, the loss of farmland
                         to nonfarming uses was not a major national
                         issue. The Government paid large sums of
                         money to purchase commodities and keep
                         farmland out of production.

                         Following the 1973-74 grain purchases by the
                         Soviet Union and some crop failures in the

                  Tear Sheet. Upon removal, the report
                  cove 1                                          -109
                    r date should be noted hereon.           CED-79

                          world, commodity prices increased sharply
                          and surpluses disappeared. This'led to a
                          @growinq awareness that good farmland is
                          limited and should be protected._,Although
                          surpluses have againsurfaced, the concern
                          about the loss of-farmland has continued.
                          (See p. 5.).

                          The Departmen.t,of Agriculture, which until
                          about the mid-1970s had minimized the im-
                          portance of losing farmland, has become an
                          advocate of its protection and retention.
                          Agriculture has directed its agencies to
                          step up assistance to local agencies and
                          residents who are trying to retain prime-
                          lands. (See pp. 5 to 9.)

                          This concern, however, is  not universally
                          shared. Opinions vary on   how much farmland.
                          is being lost to other uses and the impact
                          this loss could have on our Nation and the
                          world in the future   There is also a lack
                          of consensus on what role, if any, the Fed-
                          eral Government should play. (See pp. 9 to
                          13.)

                          IMPACT OF TECHNOLOGICAL AND RESOURCE
                          LIMITATIONS ON AGRICULTURAL PRODUCTION

                          Emerging evidence suggests that technology--
                          which has brought about the intensive -use
                          of improved plant varieties, fertilizer,
                          pesticides, herbicides, and farm machinery
                          and the extensive use of irrigation--may not
                          continue to increase productivity at past
                          levels and, hence, compensate for the con-
                          stant loss of prime and other farmland.

                          The proportion of agricultural production
                          depende-nt on energy- and cost-intensive
                          irrigation systems, rather than natural
                          rainfall on fertile soils, is rapidly in-
                          .creasing. This growing dependence could
                          quickly increase commodity production
                          costs or-disrupt production if-energy
                          supplies tighten further or if significant
                          ground water depletions occur.

                          For-example, more than half of Nebraska's
                          corn acreage was irrigated in 1976, in-
                          cluding an estimated 350,000 acres added

                                               ii

                        that year. A University of Nebraska
                        extension official estimated that half of
                        the irrigation projects in western Nebraska
                        would have water supply problems*in 20 to
                        25 years.   (See pp. 14 to 19.)

                        Alsor according to an Agriculture studyl
                        fuel consumption costs for irrigation
                        farming are nearly twice as much as for
                        dryland or nonirrigation.farming. (See
                        pp. 19 to 21.)

                        Losses of prime  farmland also.can result in
                               @in agric        p
                        shifts '        ultural roduction to less
                        productive and more erosive soils.. This
                        involves significant tradeoffs on water,
                        energyr environmenti, and cost. For example,
                        soil erosion losses on 8.9 million acres
                        brought into crop production in 1973-74 were
                        estimated to,average 2-1/2 times-the highest
                        acceptable rate. Also, the additional nitro-
                        gen fertilizer that may be needed to compen
                        sate for cropping land hav,ing less fertile
                        soil places additional demands on our sup-
                        plies of natural gas--the raw material used
                        to produce nitrogen fertilizer. (See p. 21.)

                        There is insufficient data with which    to
                        assess the significance of how losses    of
                        farmland would affect these and other    re-
                        lated considerations,, such as food pro-
                        duction and food prices, in the future.

                        STATE AND LOCAL GOVERNMENT
                        EFFORTS TO PRESERVE FARMLAND

                        Governmental control of land use tradi-
                        tionally rests with State and local govern-
                        ments which have, in general, viewed the
                        loss of farmland with more alarm than the
                        Federal Government.

                        During the past 15 to 20 years,'some State
                        and.local governments have adopted or con-
                        sidered various approaches to curtail farm
                        land conversions, including preferential.
                        tax assessments, zoning, variable capital
                        gains taxes, and sales and transfers of
                        development rights. These methods have had
                        limited impact on the loss of farmland, and
                        none of the methods proposed or in use are

                   Tear Shee

                            likely to insure that land will be kept in
                            agricultural production*

                            For example, despite   a State land-use   zoning-
                            control law in Hawaii, a statewide total of
                            37,279 acres of agricultural.land     was  re-
                            classified urban during the period 1962-76,
                            including 13,986 acres on Oahu, where the
                            most pressure for urban development exists
                            and where the reclassified agricultural lands
                            were highly productive. (See pp. 23 to 34.)

                            FARMLAND PRESERVATION OFTEN*CONFLICTS
                            WITH OTHER FEDERAL OBJECTIVES

                            Although-the 1969 National    Environmental
                            Policy Act, an August 1976   statement by the
                            President's  Council.on Environmental Quality,
                            and Agriculture's current land-use policy
                          ,,all call for Federal agencies to:cons.ider
                            prime farmland in.planning and approving
                            projects, GAO's.review of environmental
                            impact statements and other environmental
                            review documents,f.or 25  projects of 5 Fed-
                            eral agencies indicated   that preserving
                            prime and o 'ther farmland was given little
                            consideration or low priority and was
                            usually outweighed by other interests.

                            For example, the Corps of Engineers     proposed
                            a project to create a lake'in Oklahoma which
                            would take 3,300. acres of farmland. The
                            environmental impac-t statement, which did
                            not identify how much of the land was-prime,.
                            recognized that agriculturaI productivity of
                            project lands would be foregone, but said
                            that the lake would cause property values
                            to appreciably increase upstream,because
                            of theproximity to Oklahoma City. GAO was
                            ..told that the ar'ea,was primarily concerned
                            with attracting additional industrial devel-
                            opment and not the loss of prime     farmland.
                            ,(See pp. 35 to 40.)

                            No uniform criteria   exist to  help Federal
                            agencies-evaluate the impact    of losing
                            prime and other.fa.rmland and   to  balance
                            this loss against other national inter'
                            ests.  (See pp. 40 to 44.).

                                                   iv

                        WHAT SHOULD THE NATIONAL POLICY
                        AND FEDERAL ROLE BE?

                        The Federal Government's role in retaining
                        farmland*is still evolving *  In some laws
                        dealing with the environment and various
                        land-use issues, such as surface mining and
                        soil conservation, the Congress has recog-
                        nized the importance of prime farmland. It
                        has not yet, however, enacted a comprehen-
                        sive policy (1) defining the national impor-
                       .tance of retaining prime and other farmland
                        within the context of our economy and
                        society, (2) setting,goals for its reten-
                        tion, and (3) delineating the Federal role.
                        (See pp. 48 and,49.)

                        Nine bills introduced in the 95th Congress,
                        but not enacted, would have established a
                        national farmland policy and described Fed-
                        eral responsibilities in advancing that -
                        policy, including Federal support for State
                        and local farmland.preservation e-fforts.
                        Similar bills have been introducedin the
                        96th Congress.* (See pp. 49 to 52.)

                        Statest responses to GAO's inquiries make
                        clear that they believe the Federal role
                        should be to guide and help State and local
                        government efforts--not control them. The
                        States suggested, among other things, that
                        Federal agencies reexamine their programs
                        and activities that take farmland, con-
                        tinue providing data and information,on
                        the quality of farmland, and formulate a
                        national policy or guidelines on retain-
                        ing farmland.. (See pp. 52 to 55.)

                        GAO believes that a widely.publicized
                        national policy identifying the. national
                        interest in and national goals for pro-
                        tecting and retaining prime and other farm-
                        land could

                        --serve asIan effective basis for guiding
                          and supporting land-use decisions by
                          Federal agencies and land-use planning
                          and decisions by State and local govern-
                          ments,

                 Tear Sheet                    v

                          --encourage intergovernmental cooperation,
                            and coordination in managing one of our
                            Nation's most important resourcesp and

                          --promote public investment patterns that,
                            will minimize adverse impacts on farm-
                            land.  (See p. 55.)

                          RECOMMENDATIONS

                          The Congress should (1) formulate a   national
                          policy on protecting and retaining farmland,,
                          (2) set a national goal as to the amount and
                          class of-farmland that should be prese,rved,.
                          (3) periodically assess the impact of farm
                          land losses on the established goal, and
                          (4) delineate the Federal Government's role
                          in guiding and helping State and local
                          efforts to retain farmland.

                          If the Congress decides to   provide.Federal
                          support to States and political subdivisions
                         ,to carry out farmland preservation programs
                          as proposed in bills now before the Congress,
                          it should specifically set out the criteria
                          which such programs have to meet. This cr.i-
                          teria should provide, among other things,
                          that (1) agricultural areas be geographically
                          defined and preferably correspond to areas
                          that contain themost prime farmland and
                          (2) agricultural use and prime farmland be
                          clearly and specifically defined. (See
                          p. 56.).

                          The Secretary of Agriculture should:

                          --Develop additional data on, and make
                            analyses of, the significance of losing
                            prime and other farmland. (See p. 21.)--

                          --Insure, through periodic reviews, that'all
                            Agriculture agencies evaluate the loss
                            of prime and other farmland in their
                            project approval proce *sses in consonance
                            with the Secretary's October 1978 land-
                            use policy statement. (See p. 45.).

                          --Require that.additional analyses be   made
                            of the Department's potential cropland
                            estimates in terms of how much land   is
                            .likely to be converted considering current

                                                vi

                            land usel production tradeoffs, develop-
                            ment problems and.costs, and other eco-
                            nomic valuesr such as change-s in the
                            relationship of production and develop-
                            ment costs to commodity prices, and that
                            the results be published. (See p.,,64.)

                          The Secretary of Agriculture and the Chair-
                          man of,the Council on Environmental Quality
                          should undertake a joint effort to develop
                          criteria to guide Federal department's and-
                          agencies in determining and evaluating the
                          impact of their proposed projects and actions
                          that affect prime and other farmland, and in
                          balancing farmland losses with other national
                         .interests.   (See p. 44.)

                          The Chairm an-of the Council on Environmental
                          Quality should instruct Federal departments
                          and agencies@to include in their environ@
                          mental impact.statements and other environ-
                          mental review documents a discussion of
                          their analyses relating to the criteria
                          recommended above. (See p. 45.)

                          AGENCY COMMENTS

                          The Department of  Agriculture said that the
                          report clearly identifies the need for ac-
                          tions by all levels of government and that
                          it

                          --agreed with GAO's recommendations;

                          --shared GAO's view on,the need for further,
                            more detailed analysis of land potentially
                            available for crop prod.uction; and

                          --was joining with the  Council on Environ-
                            mental Quality in the leadership of an
                            interagency study of,agricultural lands.
                            (See app. I and pp. 22, 45, and 64.)

                          The Council agreed that there was a*need to
                          develop and evaluate comprehensive informa-
                          tion on the impact of Federal programs and
                          actions on agricultural lands and that the
                          interagency study would address or  ' consider
                          GAO's recommendations. (See p. 45.)

                                               vii
                Tear Shee

                            In addition,

                            --the Department. of Transportation  said
                              it supported the recommendations    related
                              to developing criteria for determining,
                              and.evaluating the impact of Federal
                              projects and actions that affect farmland
                              and would like to be included as a lead
                              agency in the effort;

                            --the Departmentof Housing, and Urban Devel-
                              opment said that criteria was needed to
                              guide agency assessments of prime farm-
                              land and that the criteria should be -                   1
                              (1).clear, specific, and firmly based on
                              the national urban policy and (2) devel-
                              oped in consultation with other Federal
                              agencies; and

                            --the Army Corps of Engineers said that
                              it was giving increased consideration
                              to the taking of prime farmland for water
                              resources projects. (See p. 45 and apps.
                              II, III, and IV@.)

                            In June 1979 Agriculture and the Council
                            announced an 18-month interagency study to
                            investigate the extent and causes of convert-
                            ing agricultural.land to nonagricultural
                            uses. The study will, among other things,
                            evaluate the role of Federal agencies in
                            agricultural land conversion, assess State
                            and local government efforts to retain agri-
                            cultural lands, and identify ways in which
                            these efforts could be made more effective.
                            Federal agencies whose programs and actions
                            affect agricultural !an 'd are to be repre-
                            sented on the study's interagency coordina-
                            ting committee. (See p. 46.)

                                                 viii

                                          C o n t e n t s

                                                                            Page

                 DIGEST

                 CHAPTER

                     1       INTRODUCTION                                     1
                                What is prime farmland?                       1
                                Farmland  use trends                          3

                     2     'A GROWING CONCERN  ABOUT THE
                              LOSS AND FUTURE  SUPPLY  OF
                              FARMLAND                                        5
                                Turnabout in USDA views on the
                                   loss of farmland                           5
                                       'iews on farmland
                                State v
                                   conversion are mixed                       9
                                Others' views  on land-use
                                   trends                                    10
                                Conclusions                                  13

                     3      TECHNOLOGICAL AND  RESOURCE
                              LIMITATIONS ON AGRICULTURAL
                              PRODUCTION
                                Technology's doubtful   ability to
                                   indefinitely compensate  for
                                   growing scarcities                        14
                                Prime farmland losses   may result
                                   in increased energy  needs                19
                                Environmental considerations                 21
                                Conclusions                                  21
                                Recommendation to the   Secretary
                                   of Agriculture                            21
                                USDA comments                                22

                     4      STATE AND-LOCAL METHODS   TO PRESERVE
                              FARMLAND HAVE NOT BEEN VERY
                              EFFECTIVE                                      23
                                Reduced property taxes--the most
                                   common meth'od used by State,
                                   and local,governm6nts                     23
                                Exclusive.statewide zoning                   29_
                                Capitalgains tax                             31
                                Development rights                           31
                                Conclusions.                                 34

                  CHAPTER                                                  Page

                      5      RETAINING PRIME AND OTHER FARMLAND
                               OFTEN CONFLICTS WITH FEDERAL
                               AGENCIES' OTHER OBJECTIVES                    35
                                 Prime farmland is to be considered
                                   in environmental reviews                  35
                                 Federal projects and actions
                                   which convert or aid in
                                   converting farmland                       36
                                 Agencies' procedures in addressing
                                   the prime farmland issue                  40
                                 Conclusions                                 44
                                 Recommendations to the Secretary
                                   of Agriculture and the Chairman
                                   of CEQ                                    44
                                 Agencies' comments                          45

                      6      NATIONAL POLICY ON, AND FEDERAL.ROLE IN,
                               RETAINING FARMLAND HAVE NOT BEEN
                               FIRMLY ESTABLISHED                            48
                                 Federal efforts on land-use
                                   proposals.                                48
                                 States' views on the Federal
                                   role in retaining farmland                52
                                 Conclusions                                 55
                                 Recommendations to the Congress             56

                      7      FURTHER ANALYSES NEEDED OF LAND
                               POTENTIALLY AVAILABLE FOR CROP
                               PRODUCTION                                    57
                                 Estimates of potentialcropland              58
                                 Factors other than land's physical
                                   properties can affect likelihood
                                   of conversion                             59
                                 USDA sees value in further.analyses
                                   of potential cropland estimates           611
                                 Discrepancies between owners' views
                                   and SCS classifications                   63
                                 Conclusions                                 63
                                 Recommendation to the Secretary
                                   of Agriculture                            6.4
                                 USDA comments                               64

                      8      SCOPE OF  REVIEW                                65

                  APPENDIX

                      I      Letter dated June 7, 1979,. from
                               the Department  of-Agriculture                66

                   APPENDIX                                                    Page

                      II      Letter dated May 221 1979, from
                                the Department of Transportation                68

                     III      Letter dated June 12p 1979, from
                                the Department of Housing and.
                                Urban Development                               70

                      IV      Letter dated  May 4,  1979, from
                                the Army Corps of.Engineers                     72

                                            A98REVIATIONS

                   CEQ        Council on  Environmental Quality

                   CNI,       conservation  needs  inventory

                   DOT        Department   of Transportation

                   EIS        environmental  impact statement

                   EPA        Environmental,Protection Agency

                   ESCS       Economics, Statistics, and Cooperatives Service

                   FmHA       Farmers Home Administration

                   HUD        Department of Housing and Urban Development

                   SCS        Soil Conservation Service

                   'USDA      Department of Agriculture

                                                CHAPTER 1

                                               INTRODUCTION

                         one of out Nation's major natural resources      is farmland.
                   our farmland, especially our best or prime farmland that is
                   particularly suitable for.cultivation,      is an essentialfac-
                   tor in the Nation's abundant agricultural      production. This
                   agricultural production has not only made      U.S. citi@ens
                   among the best fed in the world,* but has been a positive con-
                   tributor to our balance of payments      Iand to our humanitarian
                   commitments to developing countries, In fiscal, year 1978
                   a.record net agricult   'ural.trade surplus of.$13.4 billion
                   helped offset the deficit in nonfarm trade. Our agricul-
                  .tural production will likely become more important as world
                   population continues to grow. Farmland also provides aesthet-
                   ically pleasing open space, especially near urban areas.

                         Until the 1970s, the loss offarmland to nonagricul-
                   tural uses was not a.major,issue in the United States. The
                   country had large surpluses of agricultural commodities, and
                   the Government paid large sums of-money to purchase commodi-
                   ties and keep farmland out of production. In recent years
                   there has been a growing awareness at all levels of govern-
                   ment that our farmland--especially our prime farmland--is
                   limited,and should be protected. This awareness has led
                   to some  concern in the Congress about the irrev     ersible
                   loss of  prime and other farmland,to nonagricultural uses.
                   As yet,  however, no national policy on retaining farmland
                   exists.

                         We made this review to

                         --determine whether   the  conversion of farmland to
                           nonagricultural uses.is perceived to be a problem
                           by authoritative sources at the national, State,
                           and local levels;

                         --identify and evaluate the results of Federal, State,
                          ..and localIactions that affect farmland conversion,
                           including attempts to gather information on and/or
                           deal with the issue; and

                         --suggest courses of action that     would help address
                           the issue from the.Federal level..

                   NHAT  IS PRIME FARMLAND?

                         The Department of Agriculture's (USDA's) Soil      Conser-
                   vation Service (SCS) has generally defined prime farmland
                   as:

                       "land that has the best'combirra@tion of
                       physical and chemical characteristics for
                       producing food, feedo, forage,.fiber, and oil-
                       seed crops, and is also available for these
                       uses (the land could be cropland, pasture-
                       land, rangeland, forest land, or other land,
                       but not urban built-up land or water). It
                       has thesoil quality, growing season, and
                       moisture supply needed to edonom ically pro-
                       duce sustained high yields of crops
                       In general, prime farmlands have an ade-
                       quate and dependable water supply from pre-
                       cipitation or irrigation, a favorable
                       temperature and growing season * * * and
                       few or no rocks.       Prime farmlands
                       are not excessively erodible or saturated
                       with water for a long period of time, and
                       they either do not flood frequently or are
                       protected from flooding."

                       SCS is currently involved in a  nationwide program to
                  identify and map prime farmlands. We are hopeful thatt
                  when this effort is completed (expected in 1986), an ac-
                  curate measure of the amount of existing prime farmland
                  used for cropping and other purposes will be available.
                  At the present time, SCS classifies rural land, except
                  Federal land not cropped, into eight land capability
                  classes that reflect the degree of soil'limitations for,
                  growing field crops and provide a general idea of the
                  amount of prime farmland we have. Generally, classes I
                  and II, plus some class III land, correspond closely to
                  prime farmland. The test of class III land and all of
                  class IV land is considered marginal for crop production,
                  and classes V through VIII land is unsuitable for ordinary
                  field crops.

                       Acc ording to a 1977 SCS report, 1/ about 221 millio n
                  acres, or 55 percent, of,the Nation's 400 million acres of
                  cropland were in classes I and.II in 1975, the year on
                  which the report was based. The following table, adapted
                  from SCS's report, summarizes 1975 rural land uses by
                  capability class.

                  .1/"Potential Cropland Study," Statistical Bulletin No.
                    578, SCS, USDA, Oct. 1977.

                                                2

                                 National Summary   of U.S.'Land Use
                                     by Capability  Class (note a)

                                           Pasture/               Other
                  Class       Cropland       range     Forest     lands       Total

                            - ---------------  (millions of acres)  ---------------

                  I & 11         221.3        62.9      39.8      13.5         337.5
                  111            122.8         88.0     61.0      14.4         286.2
                  IV              39.9         70.7     57.7        8.5        176.8
                  V-VIII          16.4       349.3      216.9     33-.5        616.0

                        Total    400.4       570.9      375'..4   69.8.      1,416.5
                  R/Numbers may not   add due to rounding.

                        SCS has estimated that,   of the  1,016 million acres in
                  uses other than cropland in 1975, only about 10 percent, or
                 @111 million acres, had high or medium potential for conver-
                  sion to cropland. This corresponds closely to the total
                  acreage of class I and II land in these categories (116.2
                  million acres). SCS's potential cropland estimate is dis-
                  cussed in chapter 7.

                  FARMLAND USE TRENDS

                        Farmland can be viewed as a limited resource that      is
                  being consumed when.used for@more intensive purposes.        SCS's
                  1977 report showed that,.during the 8 years from 1967 to
                  1975, 16.6 million acres of all types of farmland were con-
                  verted to urban and built-up uses and 6.7 million acres were
                  submerged by water. About,a third (8 million acreso) of these
                  23.3,million acres were in capability classes I and II.
                  About 5.4 million acres of the converted land had previously
                  been in cropland,, 4.3 million acres in pasture or rangeland,
                  6.6 million acres in fdrestland, and 7 million acres in other
                  land uses. Another 24 million acres were being held in 1975
                  for future urban use.

                        Of the 5.4 million acres of former cropland,     4.8 mil-
                  lion acres were taken to establish or expand cities,
                  villages, industrial sites, railroad yards, cemeteries,.
                  airports, golf courses, public administration sites,
                  and/or other built-up areas of more than 10 acres. The
                  remaining 0.6 million acres were submerged by water. An
                  SCS,official.has stated that, for every acre reported as
                  being taken for urban uses, an additional acre is idled
                  and isolated by noncontiguous development, called leap-
                  frogging. 'on this basis, urbanization could actually have
                  resulted in the taking of nearly 10 million acres of

                                                  3

                  cropland from 1967 to 1975.    It is u 'nlikely that this land
                  will revert back to crop,production. It.is     also  unlikely
                  that the 0.6 million@acres of cropland submerged     by water
                  during this period would ever be   used again for growing
                  crops, particularly  where  lakes, ponds,.or  reservoirs have
                  been built.

                                                 4

                                                CHAPTER 2.

                                  A GROWING CONCERN ABOUT THE LOSS

                                    AND FUTURE SUPPLY OF FARMLAND

                        Each year an   estimated 3 to 5 million acres    of U.S.
                   farmlands are urbanized or Used for other nonfarming pur-
                   poses. About half consists of lands with soils particularly
                             for'cultivation. These land losses, coupled with
                   the leveling off of'agricul.tural productivity ratest pose
                   tough and unsettling questions about"the Nation's long-term
                   ability to maintain its roles as (1) an economical producer
                   of food and feed commodities and (2) the major competitive
                   exporter of farm products to the world. These questions need
                   to be considered within the overall context of our economy
                   and society so.that.all legitimate national concerns receive
                   appropriate consideration*

                        Farmland which is converted to more intensive uses,
                   such as shopping centers, housing developments, industrial
                   parks, or water-impoundments, is unlikely to be farmed again.
                   Thus, its agricultural productive. capacity is lost to future
                   generations.

                        'Genuine national concern about the loss of     land and
                   productive capacity did not occur until the explosion in
                   commodity prices in 1973-74 following a series of grain
                   sales to the Soviet Union. This induced the introduction
                   of nearly 9 million acres.of.new farmland in 1973-74. At,
                   about the, same time, questions began to be raised about
                   our ability to maintain a high level of agricultural ex-
                   ports and to keep commodity supplies abundant to consumers.
                   These questions are still being asked--even though produc-
                   tion surpluses haveagain surfaced and some cropland
                   acreage has been set aside (taken out of production) under
                   the Food and Agriculture Act of 19-77.(Public Law 95-113,
                   91 Stat. 913).

                   TURNABOUT IN USDA VIEWS
                   ON THE LOSS OF FARMLAND

                        Although-past USDA   studies have generally minimized
                   the 'importance of farmland losses, there has been a major
                   shift in USDA  views on the significance of such losses.

                                                  5

                        A 1974 USDA study      of agricultural production    near
                  urban areas concluded,."The amount of agricultural land
                  taken each year for urban uses has had little impact o      n the
                  total supply of UiS. cropland." It added:

                        "Probably the,main reason that urbanization       of-
                        cropland has had so little effect on overall
                        agricultural production has been the continuing
                        increase in yields. If productivity continues
                        to increase, there wil.1 likely be adequate land
                        to meet the needs of the country"s growing
                        population."

                        er.1974 USDA study       on
                  .Anoth                        c cluded that

                        @"Although thousands of  acres of farmland   are
                        ,converted annually to other uses--ur.banization,
                        roads, wildlife, and recreation--and population
                        has risen a third in 20 yearsr we are in no
                        danger of running out of farmland."

                        However, in 1975 a USDA-sponsored seminar on the       reten-
                  tion  of prime lands reached conclusions and proposed recom-
                  mendations that did not completely agree with previous USDA
                  study conclusions. The consensus of the participants, repre-
                  senting Federal and State Governments,     ' universities, natural
                  resource interest groups, and private industry, was that the
                  Nation's production of food could continue but would expand
                  more slowly than in the past and that dependence on highly
                  productive land would increase. One of the seminar's policy
                  recommendations was

                        "USDA should take a major, defined, and well pro-
                        moted role in the national questions of utiliza-
                        tion, enhancement and retention of agricultural
                        lands as,an advocate of retaining the maximum
                        possible base for the production of     food, fiber,.
                        and timber products, and minimizing actions that
                        will diminish the Nation's capacity     to produce
                        these essential commodities."

                        In June 1976 the Secretary announced an expanded USDA
                  @land-use policy directed specifically at,protecting prime

                  Y"Farming in    the City's Shadow," USDA-ERS, Agricultural
                    Economics Report No. 250..

                  2/"Our Land and Water Resources,".USDA-ERS,      Miscellaneous
                    Publication No. 1290.

                  lands, incl.uding crop, forest,  and range lands. He said
                  that,the loss of prime lands well-suited to the production
                  of-food, forage, and timber was,a matter of growing concern
                  to the Nation and that major consideration must be given
                  to prime lands and the long-term needs to retain the pro-
                  ductive capability and.environmental values of American
                  agriculture and forestry.

                       The expanded policy specifically provided that:

                       "USDA will urge all agencies to adopt the policy
                       that Federal activities that take prime agricul-
                       t'ural land should be initiated only when.there
                       are no suitable alternative sites and when    ' the
                       action is in response to an overriding public
                       need."

                       The policy also   stipulated that USDA would work with
                  State and local committees and concerned agencies,     groups,
                  and organizationsto advocate the protection of prime lands
                  frompremature or unnecessary conversion to nonagricultural
                  land.use and to assure that environmental impact statement
                  (EIS) procedures and review processes would thoroughly con-
                  si.der and evaluate the impact of major Federal actions on
                  prime lands. The policy did not    'set forth the quantities
                  and locations of land essential for the Nation to maintain
                  specified commodity production.levels. It only.urged Fed-
                  eral agencies to.minimize acts that result in the taking
                  of prime lands and provided for outreach to those outside
                  the Federal Government who have an interest in preserving
                  these lands.

                       In testifying on   the proposed National   Agricultural
                  Land Policy,Act (H..'Ro 4569) in June 1977, l/ USDA's
                  Assistant Secretary for Conservation, Research, and Educa-
                  tion said that prime farmland was a topic of major interest
                  to the Secretary of Agriculture, to himself, and to the
                  entire Department. He said that there is "a staggering
                  total of over 5,000 acres each day that is taken out of
                  the producing and potential agricultural land base," but
                 .that

                       "At the same time, we are aware that not all    of
                       our acres are needed today to produce the crops

                  I/Hearings before, the Subcomm -ittee on Family Farms, Rural
                    Development, and Special Studiesi House Committee on
                    Agriculture, 95th Congo,'lst.Sess     June 15 and 16, 1977,,
                   ..Serial No. 95-L, pp. 49-62o

                                                 7

                       we consume or sell abroad. Assuming normal
                       climatic conditions, technological improvements,
                       marketing conditions, and.input and energy
                       pricesI. there should be no absolute shorta-ge of
                       land before the turn of the century, and perhaps
                       for some years afterwards,"

                       He added@

                       "But we don't find that fact comforting. There
                       are too many Oifs' in that equation. World
                       climates are unstable right now, and scientists
                       don't agree fully on the  .reasons or what this ..               i
                       may lead to in the future. Yield increases seem
                       to be dampening off, and USDA''scientists expect
                       the rate of increase to continue to slow down
                       somewhat. International demands for food will
                       rise as world population grows and diets change
                       to reflect increasing affluence.. The cost and
                       availability of energy seems certain to be a
                       factor of growing importance to the maintenance
                       of high agricultural production.

                       "Thus, a combination of events could occur that
                       would put pressure on our ability to produce
                       the agricultural abundance that is so vital to
                       our Nation's strength. For the first time in
                       our history, we must begin to develop national
                       policies that recognize certain types of land--
                      @particularlythose lands that merit the classifi-,
                       cation of prime or unique farmland--as a limited
                       national resource that must be provided special
                       attention and protection."

                       "The retention of  America's-prime farmlands
                       in production may  well be the most important
                       land resource issue to face this Nation now
                       and in the future. The basic   and irreplace-
                       able role of food  in.achieving thetype-of
                       society we desire  in the United States and
                       providing the products we must send abroad
                       for both humanitarian and economic reasons
                       cannot.be avoided. We can no longer dream
                       of a 'quick fix' from technology or a limit-
                       less supply of energy or capital to replace
                       the land as the essential foundation of that
                       food supply. For many reasons--economicf
                       socialf environmental--we must place our

                                                 8

                        concern  for the future of the Nation's prime
                        farmlands at the top of our priority list.."

                        on October 30, 1978, the Secretary issued      a. revised
                   policy statement which directed USDA agencies to      step.up
                   their assistance to local agencies and residents      in their
                   efforts to retain prime lands. It al-so directed      USDA
                   agencies to:

                        --Review their programs and actions that may cause or
                          encourage irreversible conversions of prime.lands
                          and make changes asneeded to minimize their im-
                          pacts on reducing the amount of prime lands.

                          Intercede in decisionmaking by other     Federal
                          agencies where conversions of prime lands.are
                          caused or enabled by the agencies'.programs
                          or actions. Such.intercession is to be through
                                          in planning projects when invited
                          and through'review and comment on draft,EISs
                          or proposals for actions of Federal agencies.

                   Thus, USDA, which had earlier minimized the importance of
                   losing-farmland, has become an advoca,te@of its protection
                   and retention,

                   STATE VIEWS ON  FARMLAND CONVERSION   ARE  MIXED

                       .The U.S.  Domestic Council's 1976,Report on    National
                   Growth and Development .1/ stated that, between 1950 and 1972,
                   11 States lost more than 20 percent of their taxable farm-
                 @land, 9 States   more than 30 percent, 4 States more than 40
                   percent, and 2  States more'than 50 percent. Many States
                   wish to preserve their farmland because it is important to
                   their economies.. T.hey also wish to control urban growth
                   and,preserve open space for its aesthetic value and to
                   enhance the quality ofl.ife., Some States, however,      are less
                   concerned over losses offarmland.

                        We solicited the views of all    50 States as to   the
                   seriousness .of farmland conversions. Of the      43'States
                   that responded, 25 characterized    the conversions as   a.
                   serious problem,.13 believed the     conversions  posed a less
                   serious problem, and 5 said the losses.were     not.A problem.
                   Some representative responses were:

                   I/The  White House,  "1976  Report,on  National*Growth  and
                     Development, The.  Changing   Issues for National, Growth,"
                     Feb. 1976.

                                                  9

                      Illinois--The State Department of.Agriculture estimates
                      that the State has lost 100,000"acres of'farmland ca
                      year since'1960.. A State agriculture official expressed
                      concern about this shift since'the-State's farmlan&'is
                     'predominantly prime,

                      Michigan--Many State officials believe that the conver-
                      sion of farmland is a serious problem. 'During the past
                      30 years,.almost 200,000 acres have been lost each year
                      to nonagricultural uses.

                      Delaware--State officials are particularly concerned
                      about the loss of prime agricultural lands to low
                      density housing developments, many of which are finan-
                      cially assisted by-USDA's Farmers Home Administration
                      (FmHA)..

                      Alabama--State officials believe,that demands for
                      conversion of land from agricultural uses have not
                      presented serious problems except near a city under-
                      going a rather rapid population growth.,

                      Oklahoma--On the basis of data provided by SCS, conver-
                      sion of.farmland is not yet considered a problem.

                      Concerns about farmland:losses have led to the enactment
                 of various State and local laws providing a variety of tax,
                 zoning, and development control'methods designed to curtail
                 the losses. Some of these are-discussed in chapter 4..

                 OTHERS' VIEWS ON LAND-USE TRENDS

                      Various officials representing government at all levels,
                 agriculture, academia, environmental concerns, and other
                 interests have expressed differing views on the seriousness
                 of farmland losses and on whether we need an effective na-
                 tional policy to retain prime and other farmland.

                      Some believe the losses of farmland to other uses are
                 small relativ e to total land and conclude the issue should
                 be of low priority concern to the Federal Government.
                 Others have said that the situation should be more closely
                 monitored and studied before changes in Federal policy are
                 adopted. Still others, who argue that continuing farmland
                 conversions could hinder the achievement of future national
                 agricultural production goals, believe the Federal Govern-
                 ment should establish and implement a national policy almed
                 at retaining agricultural land in production.

                                              10

                      There are few.published studies other than.those of USDA
                 which address the loss of farmland on.a national basis. In
                 a.1976 article, I/ a well-known geographer asserted -that-no
                 more than 4 percent of the Nation's land area will be in
                 urban uses by the year 2000, assuming the present rates of
                 conversion continue. He concluded that land is now, and
                 will be in'the future, more than abundant to accommodate
                 the growth of our cities.

                      A 1977 Regional'Science Research Institute study
                 estimated that the conversion rate of rural land'to urban
                 and built-up uses in the United States was 1.1 million
                 acres a year. In discussing the significance of this loss,
                 the study concluded:

                      "At the national level,..the major problem
                      associated with conversion of rural land to
                      urban uses appeatsto be the long-term loss
                      of future agricultural,potential under condi-
                      ,tions of poorer climate or great pressure,on
                      American agriculture to supply foreign food
                      needs."

                     .Another 1977 Regional Science Research Institute
                 study I/ investigated the possibility that land lost to
                 urbanization might be predominantly land that is idealfor
                 agriculture--that is, prime farml.and--which unlike rural
                 land in general, is relatively limited in supply.   this
                 study concluded that there is a moderate but significant
                 bias in t@e.locatio*n of urban populations in the vicinity
                 of our prime farmland. As our citie.s expand, all other
                 things being equal, prime farmland will be more likely
                 urbanized than other lands.

                      The concern that urbanization  might be.dispropor-
                 tionately concentrated on former croplands was also cited

                 I/Hart, John Fraser, "Urban Encroachment on.Rural Areas,"
                   Geographical Review, vol. 66, 1976, pp. 1-17.

                 .9/Coughlin, Robert E., and others,."Saving the Garden: The
                   Preservation of Farmland and-Other Environmentally Valu-
                   able Land," a preliminary report to.the National Science
                   Foundation (RANN).by the Regional Science Research Insti-
                   tute, Aug. 1977.
                 Y"Urbanization of Prime Agricultural Land in the United
                   States,n a statistical analysis, Aug.,1977.

                 in a 1974 report..j/ to the Citizens'.Advisory. Committee on
                 Environmental Quality._ The'report stated that a study of
                 urbanization of land in' eight,Western-States specifically
                 showed that a high prop6rtion.o'f the land urbanized was
                 previously used*for.crop production.
                 Preserving land may be cost effective

                      We identified two   studies showing'increased    food costs
                 to consumers when  'farmland is.lost. Each study concluded
                 that it.would be cost effective for    State residents to fund
                 a land preservation program that would result in retaining
                 the State's farmland*

                       --A Rutgers University study 2/    examined the   effects
                        .of losing acreage-for growing    tomatoes in New Jersey.
                         It found'that a 100-acre reduction would result in
                         a 25-carlot reduction in quantity supplied and' a
                         retail price.increase of 18.3    to 27.25 cents a
                         hundredweight in.the New Jersey market area'. 'the
                         increased price was due to tomatoes-having to'come
                         from California and Florida. The study estimated
                         that a one-time cost of $800 to $4',000 an acre'
                         would be needed to-fund development easement pur-
                         chases, but that New Jersey cons   "umers would realize
                         benefits in the range of $10,800 to $15,200 for each
                         acre of fresh tomato production it preserved.

                      -In Massachusetts., 1951 farmland acreage of 350,000
                         acres decreased to about 293,000'acres by 1971,.a
                         57,000 acre loss. A Tufts Universitystudy 3/ com-
                         pleted in 1976 found it economically feasible for
                         Massachusetts residents to invest public moneys
                         of an estimated.$150 million to purchase agricul-
                         tural restrictions on the State's remaining farm-
                         land. Recaptured capital.gains taxes of an

                 I/Blobaum, Roger,'"The Loss of    Agricultural  Land," a study
                   report to the Citizens' Advisory Committee on Environ-
                   mental Quality, 1974.

                 .9/"The Impact of Local  Production   on Consumer Welfare in
                   the New York-New Jersey-Philadelphia Megapolis--A Case
                   Study for Fresh Tomatoes,."    Department of Agricultural
                   Economics.and Marketing, Rutgers--The     State University,
                   New Brunswick, New Jersey,    Oct.  1976.

                 3/"The Economics of Saving Massachusetts Farmland," Tufts
                   University, Medford, Massachusetts, Feb..1976.

                                                  12

                          estimated $35 million would reduce public invest-
                          ment to about $115 million. Annual public-bene    'fit.s
                          expected to accrue. totaled $43 million, consisting
                          of $20 million from transportation savings and
                         .$23 million of Federal, State., and local tax
                          receipts derived from individuals farming the land.
                          Hence,'the net public investment would,be refunded
                          in about.3 years ($115,million.divided by $43 mil-.
                          lion). The study also concluded that the pteserva-
                          tion of-farmland would  not impede other economic,
                          growth if wise land-,use planning and new growth
                          guide techniques were  adopted.

                  CONCLUSIONS

                       The irreversible loss   of farmland, to urbanization   and'
                  other nonfarming uses is of increasing    concern to many  offi-
                  cials at all levels of-government and to others. However,
                  opinions vary on how much farmland is    being lost to urbaniza-
                  tio.n and other uses--and the.impact such losses might    have on
                  our Nation and the world'in the future. As world population
                  increases, total food production must also increase. We
                  would be better able to meet future food requirements.if
                  this Nation's best farmland is preserved for agricultural
                  use.

                                                 13.

                                           CHAPTER 3

                           TECHNOLOGICAL AND RESOURCE  LIMITATIONS*

                                 ON AGRICULTURAL PRODUCTION

                      Over the years technology has.dtamatically increased
                 crop productivity by influencing and compensating.for the
                 requirements of agricultural supply factors--namelyr landt
                 water,,and.energy., A scarcity of any of*these elements will
                 interact with the others to operate as an important drag
                 on production. While technology can intervene, for example,
                 by pumping and moving,dwindling water supplies farther
                 to new lands, it is more costly, uses more energy, and its
                 effect is ultimately higher product prices. We believe
                 a need exists to develop better data on the significance
                 of losing prime and other farml *and--taking into account
                 the interrelationships of land, water, and energyo

                 TECH NOLOGY'S DOUBTFUL ABILITY TO INDEFINITELY
                 COMPENSATE FOR GROWING SCARCITIES

                      Emerging indications suggest that technology may not
                 continue to,incre,ase production at past levels and, hence,
                 compensate for losses of.productive farmland. Also, the
                 proportion of agricultural production dependent on high-cost.
                ,energy and cost'-intensive irrigation systems, rather than
                ..natural rainfall on fertile soils,.is rapidly increasing..
                 This growing dependence on technology could quickly increase
                 commodity production costs or disrupt production if energy
                 supplies tighten further or if significant ground water.
                 depletions occur.

                 Future increase in productivity
                 yields uncertain

                      Despite worldwide research in agricultural production
                 and continuous adoption of improved agricultural production
                 practices and technologies, there does not appear to be any
                 production.development in the offing comparable to the
                 revolution in U.So agricultural production started in the
                 late 1930s and early 1940s. The introduction of nitrogen
                 fertilizer and the development of hybrid seeds contributed
                 greatly to increased crop productivity. Corn yields, for
                 example, went from 28.4 bushels an acre in 1940 to 97 bush-
                 els an acre in 1972. During part of this period (1950-72),
                 energy-derived nitrogen fertilizer,consumption increased
                 about 600 percent. From 1973 through 1977, however,     average

                                                14

                  corn yields per  harvested acre went@down   somewhat,'averaging
                  86 bushels an acre. l/

                       In a 1975  report I/ the NationalAcademy of Sciences
                  said that there  was enough evidence to doubt our national
                  ability to produce all the food demanded domestically and
                  worldwide at the then current relative price levels. A
                  major reason supporting this conclusion was that the rate
                  of crop yield increases from additional applications of
                  fertilizer had been declining. The Academy's report con-
                  cluded also that no significant technological break-
                  throughs of the magnitude of hybrid corn can be reasonably
                  predicted for the next two decades. Similarly, a 1976
                  Congressional Research Service.report       concluded.that:

                       "It is generally conceded that past levelslof
                       agricultural research and development will not be
                       adequate for America's future long-term needs."

                       During our review several technological developments
                  affecting Agricultural production were brought to our atten-
                  tion. These developments, discussed below, appear to be
                  refinements to, rather than major new breakthroughs in,
                  present technologies.

                       --Development of  hybrid wheat which could increase
                         yields as much  as 20 percent according to one
                         authority. -Hybrid wheat is now being marketed by
                         major seed firms.

                       --Double cropping; that is, obtaining two crops in
                         one growing season. Double cropping is,now feasible
                         and used in the Southeastern United States. It.has
                         also been demonstrated on test plats with pea/c.orn
                         rotations as far north as southern Minnesota. The
                         process.requires intensive use of chemicals and
                         fertilizers and a.high degree of management skill.

                       --Grain varieties having greater    stress tolerances
                         for disease and cold weather.    New quicker maturing

                  I/For 1978 USDA  ha's reported a corn yield per acre figure
                    of 101.2 bushels.

                  Y"Agricultural   Production  Efficiency," National Academy of
                    Sciences, 1975.

                    11U. S. Agricultural Policy," Congressional Research Service,
                    Nov. 23, 1976.

                        corn varieties with.cold stress tolerances have
                        produced yields on western North Dakota test plots
                        as high as-those experienced in principal parts of
                        the Midwest Corn Belt.

                      --No-tillage techniques, which allow corn to be grown  on
                        lower class sloping soils. -For example, a University
                        of Kentucky survey revealed that a large portion of
                        the more than 5 million acres of class IV rotational
                        hay and pasture land is now available for feed grain
                        production without fear of soil deterioration. One
                      @estimate indicates that about 200,000 acres of no-
                        tillage,corn is grown annually in Kentucky.! This
                        process also requires intensive use of chemicals and
                        fertilizers and a high degree of management skill.

                In some  areas long-term availability of
                water for irrigation is  questionable

                      Irrigation technology has mad e possible major expansions
                of commodity production  in the Great Plains and Western
                States. While the.amount of irrigated acreage nationwide
                can still be increased, evidence indicates that in some
                areas present water supplies are diminishing and that the cost.
                of water will increase, resulting in higher product costs.
                This condition is most acute in the Great Plains and could
                cause a regional shift in crop production. The retention
                of existing productive farmland in.areas.where rainfall is
                abundant could help to minimize the effects of these changes.

                      As of 1974 about 41.2 million acres were irrigated in
                the United  States. USDA projects an additional 5.3 million
                new acres  for irrigation expansion by the year 2000. While
                conceding  that irrigation water depletions will offset some
                of the projected increases, USDA has concluded that the
                United States has an adequate freshwater supply for future
                growth of agricultural and other uses to the year 2000. USDA
                based this conclusion on the U.S. Water Resources Council's
                "benchmark-trend" future projection prepared.for the 1975
                National Water Assessment.

                      In March 1977 we reported l/ that significant differences
                existed between the Council's benchmark projection and State/
                regional viewpoints on future water needs (demands). Authori-
                ties in the Western States seriously' questioned the Assess-
                ment's usefulness because simple comparisons of aggregate

                1/,"Problems Affecting Usefulness of the National Water
                  Assessment,"  CED-77-50, Mar. 23. 1977.

                                              16

                    data did-not reveal actual water shortages in particular
                    study areas   and  because the projection ignored the        crucial
                    issue of water rights and other institutional@factors. In
                    a report issued in June 1977, .1/ we discussed major problems
                    regarding the future availability of ground water          supplies
                    for agriculture, particularly for irrigated areas          depending
                    on wa ter from  'the Ogallala aquifer,     which provided water for
                    about 11 million irrigated acres in        1974.

                          Ogallala aquifer

                          The.Ogallala aquifer,     considered one'of the Nation's
                    most important aquifers, underlies        a major portion    of the
                    Great Plains. (See map on next page.) It extends             about
                    800.miles from southern South Dakota.to west-central Texas.

                          A precise and   comprehensive analysisof water         usage
                   .and availability for the aquifer is not available. However,
                    on the basis of fragmented information and selected            studies.,
                    water withdrawals,for several areas that.overlie the aquifer
                    far exceed the recharge rates. This is-known as overdrafting..
                    So significant is the overdrafting,that the Internal Revenue
                    Service has recognized Ogallala water in Texas as a wasting
                    asset subject to a depletion allowance credit like that of
                    mining.,

                          When ground wa.ter.lev.els   *decline   significantly     irriga-
                    tors have to use more fuel to      pump or   lift the .  ground.water.
                    If the decline becomes severe      enough,   or fuel prices rise
                    high enough, it will become uneconomical to irrigate and
                    the land would likely revert to less productive uses.

                          In our review we identifi.ed,.studies and developed data
                    to show  some of-the near-term problems associated with the
                    aquifer.

                          --For the   1975 National Water    Assessment,.the Missouri
                            River Basin-Commission classified.the Ogallala
                            ground water depletions,as a severe and urgent
                            problem in parts of some States.

                         .--In Lubbock County, Texas, the number of irrigation
                            wells increased,from 20 in 1935 to 6,700 in 1977.
                            The 1977 estimated irrigation acreage of 300,000
                            acres is projected to decline to 200,000 acres by
                            1990, due chiefly to the exhaustion of.ground water
                            supplies.

                    1/"Ground Water: An Overview," CED-77-69, June 21,             1977.

                                                      17

                                                                                                                                                             SOUTH
                                                                                                                                                             DAKOTA

                                                           WYOMING

                                                                                                                                                                                                                                       IOWA
                                                                                                               ... .......                                                   . ..........
                                                                                                                  . . ........ ... ........

                                                                                                                                  *.-.-.-.'-*.-**,-.*.;::.1: ............ .
                                                                                                                                                    .. . .... .....
                                                                                                                                                                                                   NEBRASKA

                                                                                                                                                                                                                                             Mo.

                                                                                                                       %

                                                                      COLORADO
                                                                                                                                                                                                KANSAS

                                                                                                                                                                                                   OKLAHOMA,

                                                               NEW MEXICO                                                           . . . ............

                                                                                                         W

                                                                                                         ... ......  *F_
                                                                                                         UP
                                                                                                   . ....             ... . ...
                                                                                                    3-
                                                                                                                                              tP                                 TEXAS

                                                                                                                                                                                                Scale in miles
                                                                                                                                        4

                                                                                                                                                                             0                           100                         200

                                                      Source:               "Mining the Ogallala Aquifer: State and Local Efforts, in Groundwater                                                            Management,"
                                                                            Agricultural Experiment Station--USDA, Oklahoma State University, Nov. 1917.

                                                                                                                                              18

                       --The  number of irrigation wells in west-central Kansas
                          increased from.about 250 in 1950 to 2'.850 in 1977.
                          The saturated thickness, which is the   area of the
                          aquifer saturated with water, had declined from 58
                          feet to 8 feet from 1930 to 1977.

                       --In  1976 an estimated 350,-000 acres of -irrigated
                          land were added for corn production in Nebraska.
                          As of 1976 total acreage for corn in Nebraska was
                          estimated at 6.2 million acres of which 3.7 million
                          acres .were irrigated. A University of.Nebraska
                          extension official told us.he estimated that half
                          of all the existing irrigation projects in the
                          western part ofthe State would have water supply
                          problems 'in 20 to.25 years.

                       --According to the U.S.. Geological Survey,    present
                          rates of irrigation development in some parts of
                          southwestern Nebraska,will cause water level de-
                          clines of almost 50 percent by the year 2000.

                       Three Federal agencies are studying various aspects of
                  the Ogallala. The Geological Survey is involved in a 5-year
                  study to be completed in-1982 to gather data on pu    mping
                  effects for the whole aquifer. A study by the Department
                  of Commerce's Economic Development Administration is to
                  determine the economic  .impacts for the area overlying the
                  Ogallala in light of the declining water levels. The third
                  study, by the Department of-the Interior's Bureau of Reclama-
                  tion, is focused on" the high plains region to identify water
                  supply problems and needs.
                 -PRIME FARMLAND LOSSES MAY RESULT
                  IN INCREASED ENERGY NEEDS

                       Production  losses from converting prime farmland to
                  other-uses have  been compensated for in part by,the develop-
                  ment and expansion of energy-consuming irrigation farming
                  in the Great Plains. For example, an average of over 300,000
                  acres of irrigated corn (for grain) lands have been estab-
                  lished in Nebraska annually since 1973. A USDA study l/
                  showed the following significantly increased    energy consump-
                  tion when irrigation farming occurs.

                  .I/"Far.mer Adjustments to Higher Energy Prices," USDA-ERS,
                    ERS-663, Nov. 1.977.

                                                 19

                                  Energy,Costs to Produce Corn     on.
                     Irrigated-Verisus  Nonirrigated (Dryland)     Acreages   -1975

                                                          Dollars, per%acre
                                                 Irrigated-,-.              Dryland--
                                                southwestern.               western
                                                  Nebraska                  Illinois

                 Fertilizer, -herbicides-  "
                    and insecticides               $37.62                    $37.95

                 Fuel  and lubricants:
                      Tractor                         .2.08                     3.15
                      Equipment                                               .2.77,
                      Irrigation                     37.92

                 Energy-related costs.             $79.28                    $43.87

                 Yield per   acre. (bushels)         109                       116

                 Energy costs per bushel           $    .73                  $   .38

                       The  University of Nebra'ska.also-st.U'died     dryland farming
                 and irrigated farming on an energy equivalent basis. The
                 study showed that dryland farming.required 40.57 gallons of-
                 diesel fuel per acre of corn, while irrigated farming-required
                 90.3 gallons per acre. The ratio of-crop energy output to
                 energy inputs was higher for dryland farming than for irri-
                 gated farming.

                       U.S. agriculture is highly dependent       on energy and
                 .particularly petroleum'for its present abundant production.
                 A 1974 USDA report l/ for the Subcommittee:on Agricultural
                 .Credit and Rural Electrification of the:.Senate Committee
                 on Agriculture and Forestry pointed out that in 1971, when
                 @petroleum accounted for 40.8 percent of the energy consumed
                 by the total economy, it accounted for 88.3 percent of the
                 energy consumed in.farm-production. Any significant change
                 in the supply or price of energy could have a serious effect
                 on production., An Iowa,State University study, 2/ which

                 lp'The  U.S. Food   and,Fiber Sector:      Energy Use   and.Outlook,
                    A Study'of the   Energy Needs of the Food Industry," USDA-
                    ERS, Sept. 1974.

                 2/"U.S.   Agricultural Production    Under  Limited Energy Supplies,
                    High Energy Prices, and Expanding Agricultural Exports,"
                    Center for Agricultural and-Rural      Development, 'Iowa State
                    University,   Nov. 1976.

                                                   .20

                    examined the effects of.reduced en  ergy supplies, concluded
                    that a 10-percent energy supply reduction could result
                    in a 41-percent reduction in irri  ga ted acres. In terms
                    of commodity price increases, the 10-percent energy
                    reduction was projected to result in a 42-percent increase.

                         A further  major energy consideration has to do with
                    the.additional  fertilizer''that would be needed to obtain
                    high crop production on less fertile land brought into
                    production to replace fertile farmland converted to other
                    uses. Because   natural gas is the raw material used in
                    producing ammonia and ultimately in producing nitrogen
                    fertilizer, greater use of nitrogen fertilizer to compensate
                    for cropping land having less fertile soil places.additional
                    demands on our natural gas supplies.

                         Even if the availability of energy supplies was assured,
                    most signs point to future increase in energy costs.

                    ENVIRONMENTAL CONSIDERATIONS

                         Because losses of prime   farmland can result in shifting
                    agricultural production to less productive land in the same
                    @or other regions, the introduction of less productive land
                    and more erosive soils will likely add additional stress
                    on the environment. According to USDA, for example, of the
                    8.9 million acres brought into crop production in 1973-74
                    (a period of high commodity prices), 5.1 million acres had
                    inadequate conservation treatment (erosion control) and water
                    management. USDA estimated that soil erosion losses for'the
                    entire 8.9 million acres averaged 12 tons an acre a year, or
                    about 2-1/2 times the-highest acceptable rate. Soil scien-
                    tists estimate that, to maintain productivity over-time,
                    annual soil losses must be limited to no more than 5 tons
                    an acre in deep soils,and 1 ton an acre in shallow soils.

                    CONCLUSIONS

                         Indications are that crop productivity gains derived
                    from technology cannot continue to compensate for the constant
                    loss of prime and other farmland. Replacement or expansion of
                    land in our farmland base involves significant-tradeoffs and
                    limitations on water, energy, environment, and cost. Insuf-
                    ficient data'exists with which to assess the significance of
                    how losses of farmland would affect these and other related.
                    consideratioris in the future.

                    RECOMMENDATION TO THE
                    SECRETARY OF AGRICULTURE

                         We recommend that the.Secretary direct the Economics,
                    Statistics, and Cooperatives Service to develop     additional

                                                  21

                 data on, And analyses of, the significance of replacing
                 lost prime and other farmland as it relates to (1) additional
                 energy, waterF,dnd financial.-requirements for crop production,
                 (2) food prices, and (3) erosion and other environmental con-
                 siderations. Such information would provide a better under-
                 standing of the. significance of losing our farmland.

                 USDA COMMENTS

                     USDA said that it  agreed with our recommendation.*.
                 (See app. I.)

                                             22

                                              CHAPTER 4

                             STATE AND LOCAL METHODS TO-PRES'ERVE FARMLAND

                                     HAVE NOT'BEEN VERY EFFECTIVE

                       Several State and   local governments have becomeincreas-
                  ingly concerned about losing   farmland to otheruses, particu-
                  larly urban uses. These losses have adversely affected some
                  local agricultural economies   and at the same time decreased
                  the availability of open space near urban areas.' over the
                  past 15 to 20 years, some States and localities have adopted
                  or considered various tax, zoning, and development control
                  methods intended to help reduce farmland-losses. These
                  methods have had limited impact on the loss of farmland and
                  none of the methods proposed or in use seem likely to insure
                  that land will be kept in agricultural production.

                       Several bills introduced in the 95th Congress, but not
                  enacted, proposed technical and financial assistance to
                  States and political subdivisions to encourage them to ex-
                  periment with methods for protecting farmland@in areas where
                  land was being converted to nonagricultural uses at a high
                  rate. Similar bills have been introduced in the 96th Con-
                  gress. The following discussion of present and potential
                  problems with.some of the farmland retention methods should
                  be useful to the Congress in its deliberations on these
                  proposals.

                  REDUCED PROPERTY TAXES-@-THE  MOST COMMON
                  METHOD USED BY STATE AND LOCAL GOVERNMENTS

                       Many State and local governments have   tried to reduce
                  farmland losses by reducing property taxes   on farmland.
                  Theoretically, this reduction.induces the owner to keep    the
                  land in agricultural production. However,.the capital gains
                  which can be obtained.from selling the land.,usually outweigh
                  any tax benefits.

                       The  tax reduction is  achieved by assessing land at  a
                  rate reflecting its agricultural use rather than its poten-
                  tial for urban or other development. This is generally
                  called preferential or'differential assessment. Accord-
                  ing to.a 1976 report prepared for the Council on Environ-
                  mental Quality (CEQ), L/ 42 States have adopted some type

                  Y"Untaxing   Open Spacer".@a study prepared under contract
                         the Council,on Environmental Quality-by the Regional
                    Science  Research Institute, Philadelphia, Pa., Apr. 1976.

                                                 23

                 of differential assessment law. These laws' main objectives,
                 according to the report, are to provide tax relief for
                 farmers and topreserve open space, particularly farmland.
                 In some States other land uses besides agriculture qualify
                @for differential assessment because the laws of these States
                .are simply intended to preserve open space.

                      How effective is differential assessment in retaining
                 farmland? In Illinois and Californiai where we reviewed
                 this method in detail, it has had limited success.

                 Illinois differential assessment law

                      In 1976 Illinois ranked first among the   States in corn
                 and soybean production. It produced 20 percent of the Na-
                 tion's corn and 19 percent of its soybeans.    Also, 11 percent
                 of.U.S agricultural exports in 1976.came from Illinois.

                     .Of the State's total land..'area of about 36.million acres,
                 most--81 percent in 1976--is farmland, with about,90 percent
                 of the cropland classified as prime agricultural land.
                 Between 1960 and 1976, the State lost 1.6 million acres,of
                 farmland, much of which was converted to residential and
                 recreational uses.

                     ..Before 1971 one of the forces that  helped the conversion
                 of farmland to urban uses in Illinois was high,property taxes.
                 Farmland near urban areas was Assessed at a higher rate than
                 other farmland because of its potential value for other uses..
                 Consequently, many owners found that thereturns from this
                 land were inadequate to justify its use for farming.

                      In.1972 Illinois enacted'a differential assessment law
                 (Ill. Rev.' Stat.,r ch. 120,, secs. 50la-l through 50la-3, 1974
                 Supp.) to give owners using their land for agricultural pur-
                 poses a tax break by.limiting the tax assessment.to the
                 land's agricultural use value instead of its   fair market
                 value. However, if the land was transferred to a nonagri-
                 cultural usei the owner was liable for the deferred market-
                 value taxes for the prior 3 years'plus a 5-percent annual
                 interes't penalty. This feature is referred to as a rollback
                 tax. l/

                 l/A developer who objected to   the rollback tax challenged
                   the law in the State Supreme Court. Although the Court
                   upheld the law, the Illinois   legislature passed another
                   differential assessment law in December 1977 which does
                   not contain a rollback tax provision.

                                               24

                       The law's primary,purposes    were to (11 give bona fide
                  farmers near urban areas property tax relief and (2) prevent
                  the premature sale of farmland    and control urban growth.
                  On both aspects, the law has been less,.than successful.

                       For example, a,Northw6stern University professor, who
                  studied the effects of.differential assessment in five.
                  Chicago-area counties--Cook, Du Page, Kane,@LAke,. and Will,
                  noted that, in the four counties where there wasparticipa-
                  tion, about 32 percent of the participating,landowners were
                  non.farmers. Nonfarmer participation ranged from 65 percent
                  in Cook County to 25 percent in the more,rural     Kane County.
                  Healso concluded that differential assessment      did not seem
                  to have retarded the loss of farmland..

                       Avorking group     of.the Illinois natural,resources
                  subcabinet said that   the law has.had limited,impact on
                  keeping land in farm,use.    It,said.such measures protect
                  a farmer from"being-forced   to sell'prematurely, but do not
                  prevent the conversion of farmland. Also, SCS,1s State
                  Conservationist for Illinois reported in 1977 that "There
                  is'nothing on the horizon  'to indicate that   Illinois will
                  not lose the equivalent  'of another five or   six counties
                  [of farmland] by the'turn of the century..'V..

                       An example of   how,quickly  the.loss of. farmland-can
                  occur and theiimited success of differential assessment
                  is found in Naperville Township in Du Page.County, which is
                  immediately west of Chicago, Thetownship lost 17 percent
                  of its farmland,from 1970 to 1976, and a@.total of 10,941
                  acres, or over.80 pprdent,of the_township'.s farmland in,
                  1976,.was slated for development or was being developed.
                  Of this development acreage, 92 percent is prime land with
                  some of the'Nation's most.productive'corn-growing soil.

                       County records..showed that, of'the    acreage.under
                  differential assessment-in Naperville Township in 1975,
                  62per .cent.was owned by  developers, 4 percent by     rail-
                  roads or utilities, and,  only about one-third by bona fide
                  farm operators. Because the lower agricultural assessment
                  is..based not on ownership but.on existing land use, devel-
                  opers,railrioads, and utilities can secure ten-ants to re-,
                  tain an.agricultural use ahd.benefi.t from the differential:
                  assessment. A member,''of the''County Regional Planning Com-
                  mission and  the County  Supervisor of  Assessments have both
                  concluded that the law   has:not acted  as a deterrent-to
                  urbanizing  farmland.

                       How do  developers  view  the law? A   spokesperson for
                  one company  thathad 565 acres.'under differential assess-
                  ment in 1977  in'Naperville  Township told    us that, when the

                                                   25

                  demand for land is strong enough, the. land will shift out
                  of agriculture into more intensive.uses. A local bank
                  executive who manages farmland for developers felt:that the,
                  rollback tax had been-somewhat of a deterrent to,conversion,
                  but that developers would simply pass on the cost of the
                  rollback tax to lot purchasers. He added, however,.tha-t some
                  developers would like to have the dual assessment eliminated
                  because some farmers do not want to sel-1 their land and will
                  continue to farm under the, protection of the differential
                  assessment-law. The bank executive and another corporate
                  landowner pointed out that the differential assessment law
                  allows a more orderly transition from agriculture to develop-
                  ment and*, because of the tax break, land is held in agri-
                  culture longer before it is developed.

                       Therefore, although the Illinois     law may help keep some
                  land in agricultural production longer, it is doubtful that
                  it can stem the conversion of farmland that is under devel-
                  opment pressure.,

                  The Williamson Act--California

                       The California Land Conservation     Act of  1965,  known as
                  the Williamson Act, allows local governments--.city      and
                  county--to contract with land   owners to keep land in agri-
                  cultural production. The act is intended, in part, to dis-
                  courage premature and unnecessary conversion of farmland
                  to urban uses as well as to discourage noncontiguous urban
                  development patterns.

                       In 1966 the State Constitution was amended to       allow
                  local assessors to assess the land under such contracts
                  according to its use value rather than its market value.
                  This use-value assessment is similar to a differential..
                  assessment. According to a study done for CEQ (see p. 23),
                  the act's primary objective was to lessen the income squeeze
                  on those seriously committed to farming in areas experiencing
                  developmental pressures. It was not,conceived as a way of
                  preserving land that was ripe for development. Participation
                  of both local governments and landowners is      voluntary.

                       In areas where urban development pressures exist,
                  use-value assessment generally results in lower property
                  taxes for landowners     It was anticipated that this would
                  act as an incentive ior landowners to put their land under
                  contract. Originally the act covered only prime agricul-
                  tural lands, but it was later amended to cover other lands
                  or areas, such as recreational lands, open space lands,.wild-
                  life habitat areas,,and managed-wetlands.

                                                  26

                       Once a contract,is entered into, the landowner agrees
                  to use the property only for the purposes set forth in the
                  contract for at least 10 years. The contract is also bind-
                  ing on successor owners. Contracts are automatically re-
                  newed each year, unless a notice, of nonrenewal is given by
                  either the landowner'or the local,government. With the.
                  automatic renewal, the contract's termination date is also
                  automatic'ally extended 1 year, in effect maintaining a
                  running contract of the original length.

                       The contract can be cancelled only  at the landowner's
                  request and only,if approved by the local government. The
                  local government can approve cancellation only if it finds
                  that cancellation is not-inconsistent with the Williamson
                  Act and is in the public interest. An opportunity to use.
                  the land for another purpose is not a sufficient reason to
                  cancel the contract.. If cancellation is approved, the
                  landowner is assessed a penalty,fee amounting to 50 percent
                  of the land's cancellation.valuation (equivalent to 12-1/2
                  percent of the full cash value). Thelocal government may,
                  with the approval of the Secretary of the California Re-
                  sources Agency, waive all or part of the penalty.fee. At
                  the time of our reviewj the Secretary had not approved the
                  waiver-of any penalty fees.

                       According to a California Department-of Conservation
                  report, the State has about 100 million acres of land,
                  in clUding 45 million.acres of privately owned nonurban
                  land. About 12.6million of these 45 million acres are
                  prime lando As of October 31, 1976, about 15 million
                  acres in 46 of the State's 58 counties were under William-
                  son Act contracts.. Of this acreage, about 6 percent wa-s
                  prime farmland in rural/urban transitional.zones, 24 per-
                  cent was prime farmland in rural areas, and,70 percent was
                  forested and ftonprime open space land.

                       A survey of local-officials in:the counties which   had
                  implemented the act-revealed that most saw the act as
                  favoring very large-holdings of remote rural.land. Three
                  other studies of land under contract in 1968-69, 1971-72,
                  and 1973.concluded that the level of participation near
                ..urban areas had been too low to.have an impact on the
                  preservation of agricultural and open space lands. They
                  also found that program participation had been.concentrated
                  in remote areas with minimal potential for conversion to
                  urban uses.

                                               .27

                      According toa USDA study, l/ there are two basic
                 reasons why the Williamson Act has not been more effective.
                 First, the incentiv 'e of use-value assessment has not been
                 strong enough, especially in urban fringe areas. A State,
                 official said that many landowners do not want to limit
                 their options by placing their.land under restriction for
                 a long period. Secondly, although the State intended local
                 governments to designate areas as agricultural preserves
                 eligible for use-value assessment, it is the individual
                 landowners who seek agricultural preserve designation and
                 use-value assessment for theirland. This situation results
                 in random and,unsystematic patterns of land under contract,
                 which may actually stimulate, rather than prevent, non.-r.
                 contiguous urban growth in expanding areas.

                 Overall. results of differential assessment

                      The study done for CEQ (see p. 23), which included
                 detailed studies of differential assessment in nine States,
                 including California, concluded:

                      "Except for-a  few specific situations, which
                      account for a  small fraction of potential sales
                      Pf farmland, differential assessment is.not
                      likely to be effective in achieving land use
                      objectives."

                      A desired  objective of retaining prime farmland through
                 differential asses-sment is not achieved because of the fol-
                 lowing general features.

                      --The tax  incentives to keep land in agriculture are
                        not strong enough to prevent Conversion to urban
                        uses.

                      --Differential assessment   does not distinguish between
                        prime farmland.and:other land.. In California, 70
                        percent of the land under Williamson   Act contracts
                        was forested or nonprime.open space land.

                     .--Differential assessment does not consider    ownership...
                        Developers andspeculators can'benefit from its*
                        provisions.

                 I/Greg C. Gustafson, "Califor  nia's Use-Value Assessment
                   Program: Participation and,Performance Through 1975-76.,"
                   Mar. 1977.

                                                28

                        Despite these features, differential assessment pro-
                   vides some desirable benefits. It provides tax relief for
                   agricultural operators near urban areas where normal
                   property taxes might otherwise make it,uneconomical to
                   farm. Also, in some cases it has.helped prolong the time
                   land has been kept in agricultural production.

                   EXCLUSIVESTATEWIDE ZONING

                        Hawaii is the only    State to-adopt statewide zoning
                   for land-use control. The    State's  Land Use Law   of  1961 pro-
                   vides for a land-use commission plus a petition.process       and
                   boundary review to regulate and act 'on requests for reclassi-
                   fying property use or lines. The importance'of       agriculture.,
                   the pressure for development, and.the threat of-urban sprawl
                   led to the law's creation. Its purpose is to protect and
                   conserve prime And other lands through zoning within the
                   counties to (1) provide for orderly and compact urban
                   growth with efficient and economical public services and
                   (2) 11create a,complementary assessment basis according to
                  -the contribution of the lands in those uses to which they
                   are best suited." The law     as amended in 1963 defines.four
                   land-use districts: urbani, rural, agricultural, and con-
                   servation.

                        Changes in  land-use classification, which are-decided
                   by the land-use  commissIon, l/ can be requested,through a
                   petition filed by persons with a:property interest in the
                   land, by county or State departments or agencies, or by the
                   commission itself. The commission is alto required to-make
                   a review ofland-use classifications every 5 years.

                        Despite the land-use law,    a statewide total of 37,279
                   acres of agricultural land was    reclassified urban during.
                   the period 1962-76, including    1:3,986 acres on Oahu'where
                   the most pressure for urban developmentexists- and where
                   the reclassified agricultural lands were highly productive..

                        Because the.State has no definitive criteria as to how
                   agricultural use   should be weighed against competing     uses,
                   the commission is operating with insufficient guidelines,
                   to make decisions   and no.statdd goals to measure against.
                   State representatives indicated that, unless the Sta     .te

                   I/Parties to   the proceedings  may obtain a judicial review
                     of the land-use commission's decision. The court may
                     reverse or  modify a commission   decision if it is clearly
                     contrary to the preponderance,.of evidence.

                                                   29

                 sets and the commission.uses meaningful criteria   and  goals
                 for preserving farmland, the loss of important farmlands
                 will continue.

                      In addition to  statewide zoning   Hawaii has a program
                 where land in agriculturally'zoned areas can   be pledged 'or
                 dedicated to agriculture and be taxed at a-lower rate. The
                 program allows land to be dedicated for 20 years   (10 years
                 in some cases) with the property tax assessment reduced by.
                 one-half. The dedication, however, can be cancelled by the
                 landowner with 1-year advance noticef. Through 1976, 523,625
                 acres had'been dedicated.

                      A State Department of Agriculture.off   ic ial, referring
                 to a draft report on the dedication program, pointed out
                .the following weaknesses:

                      --The program does not  define what constitutes agricul.-
                        tural.use-. Under current proc.edures the department
                        must determine if the land in question is suitable
                        for the intended use under dedication. No considera-
                        tion is given to the size of the land or the viability
                        of the intended crop. As a result petitions have had
                        to be granted for land parcels as small as 5,000 to.
                        10,000 square feet with the-intended use being flower
                        production or support of one cow or horse. In some
                        communities requests for dedication have been received
                        for backyard gardens.or stables. -.There  is no recourse
                        but to certify the land as suitable for   the intended use
                        and the request is approved.

                      --Management and enforcement.is an   administrative
                       .nightmare.. Program rules allow owners or lessees
                        the option of dedicating only a portion of their
                        land and they may dedicate several noncontiguous
                        parcels of land in the same or. different tracts.
                        The limited number-of department-personnel precludes
                        adequate field checks to insure that the dedication
                        terms are being met.

                      -Land is being dedicated that has   no potential for
                        urbanization. Areas where urban   development is
                        likely to occur are not dedicated-and generally
                        only those prime.lands where development is un-,
                        likely have been dedicated..

                      --The program is resulting in  a tax:shelter.rather than
                        an effective land-use control mechanism.

                      Neither the zoning system nor the dedication program
                 has been very successful in stopping farmland conversion.

                                               30

                  However,, State officials view the zoning system with its
                  associated petition process as having been useful in slow-
                  ing urban development and allowing local officials necessary
                  time.to develop plans and expertise in the land-use area.

                  CAPITAL'GAINS'TAX

                       In 1973 Vermont enacted a capital gains tax on land
                  sales to discourage'short-term speculation on undeveloped.
                  land, including farmland. The.tax.depends on the length
                  of time the land is owned and the percentage of realized*
                  profit. The tax  is highest for land purchased.and sold at
                  a high profit in less than 1 year. No tax is assessed for
                  land owned for 6 years or more. To.11lustrate, if land was
                  held less than 1 year and sold for.a profit of under 100 per-
                  cent, the tax on the.profit would be 30 percent. If the land
                  was held between.5 and 6 years and'the profit was under 100
                  percentr the tax drops to 5-perce'nt. If the gains in the
                  above cases were 200 percent or more,, the tax rates would
                  be 60 and 10 percent, respectively.

                       According to State officials, the tax has not been a
                  very effective method for preserving farmland in develop-.
                  ing areas because of the large profits which can be ob-
                  tained in land sales.

                  DEVELOPMENT'RIGHTS

                         small number of State and local  governments, pri-
                  marily in the Northeast, have tried to  stop farmland con-
                  version by controlling the rights to develop land. These
                  development rights maybe sold or transferred without
                  selling the land. If a State or local government@can ob.-
                  tain the rights, the continued use of the land.for agricul-
                 .tural purposes can be assured without actual ownership of
                  the land., The main drawback to government purchase-of
                  development rights is their cost. Also, the legality of
                  development rights'has not been thoroughly tested.

                       One approach involving the transfer of   development.
                  rights is being used in Buckingham Township  in Bucks
                  County, Pennsylvania. From 1967 to 1977 the township lost
                  1,816-acres (12 percent) of its productive farmland to
                  urban development. To stop the loss of.farmland, the
                  township designated.certain.areas as agricultural dis-
                  tr'icts and others.as development districts.. Landowners
                  in agricultural districts were assigned development rights
                  which they could hold or sell independent of the land's
                  deed. In development districts, only a specified number
                  of dwellings can be constructed per acre, but landowners
                  in.these districts can increase the amount of development

                                                31

                on their land by purchasing development rights from land-.
                owners in agricultural districts.

                     Once agricultural district landowners sell a portion
                or all of their development rights, the township rezones
                an equivalent portion of their land to an agricultural
                preserve where only agricultural and limited residential
                uses are permitted. If agricultural district owners develop.
                some or all of their land in the district, the corresponding
                number of development rights is cancelled. From enactment
                of the ordinance in March.1975 to March 1978, rights to only
                328 acres had been cancelled. At   the beginning of 1978, a
                total of 12,474 acres had development rights outstanding.

                     The purpose of the transfer development rights approach
                is to.compensate landowners who do not want to develop their
                property but want a return on their land as if.it was sold
                for development. The rights also encourage a more orderly
                approach to development, asiopposed to random growth.- Town-
                ship officials said.that, although there had not been'a
                strong market for the developmentrights and their legality
                had not yet been tested, the development of land had slowed
                since the program's adoption.

                     Under another approach, a State or local government
                reimburses the landowner for giving up the right to develop
                his land and places a land-use restriction on the land deed
                which prevents development-of the land. The owner pays
                property taxes on the land subject to the deed restrictions.
                The purchase price of the development right is the difference
                between the land's market value and its farm-use value.

                     At:the time of our review, two States--Massachusetts
                and New Jersey--had passed laws permitting the States to
                buy development rights and had funded their programs at
                $5 million each. Only New Jersey had taken initial steps
                to buy the rights.

                     From 1954 to 1968 New Jersey lost about 620,000 acres
                of farmland, and a special State commis,sion subsequently
                recommended that., to help retain agriculture as a New Jersey
                industry, each municipality designate at least 70 percent of
                its prime farmland as an open space preserve. Owners of the
                designated land would be able to sell their development
                rights to the State which would pay for them out of funds
                derived from a transfer tax on all real estate transactions.

                     In 1976.the State authorized $5 million for a 2-year
                program to procure development right,sto farmland on a
                voluntary basis in a pilot project in Burlington County.
               'However, the State did,not specifically define what a farm

                                              32

                    is or what the landowners could do  with-the land after
                    development rights were purchased. Although the State had
                    received offers from some landowners to sell development
                    rights, none were purchased and the program was allowed
                    to expire in July 1978.
                         According to a State official, the legisl@ature  believed
                    a statewide program of this kind would be,too expensive.'
                    Some agricultural authorities felt the program would ulti-
                    mately result in, higher farmland'a.ssessments and more taxes
                    for farmers. Also, a State official told us that some
                    taxpayers may be opposed to the,State's buying develop-
                    ment rights from investors,,speculators,,and developers.

                         Suffolk County, New York, also was purchasing
                    development rights to farmland from the proc'eeds.of 30-year
                    serial bonds. This county, located in the eastern two-
                    thirds of Long Island, is New York's leading agricultural
                    county in terms of sales--estimated to exceed $80 million
                    a year. Agricultural production was seriously threatened,
                    however, by a fourfold increase in population during the
                    1950s and 1960s and a 55-percent decrease in the number
                    of farmland acres from 1950 to 1974.

                         in 1974 the county adopted a voluntary   program for,
                    purchasing development rights for-12,000 to   15,000 acres of
                    its prime farmland at'an expected cost of about $60.million.
                    It was hoped that this would encourage other owners to keep
                    their land in agricultural production. Acquisition of
                    development rights for all or most of the farmland was
                    considered ideal but.'not financially feasible.,

                         In September 1976 the county authorized a $21 million
                    bond resolution to purchase rights to an initial 3,800
                    acres, By February 1978-the county had purchased rights
                    to one farm encompassing 1.31 acres and contracts had been
                    signed with 25 additional landowners.

                         It is too early to determine whether the county's
                    program will be successful in retaining-farmland. The fol-
                    lowing potential problems-could detract from its success.

                         --Because of the county's fiscal and property tax...'
                           situation  it  is uncertain that the program would
                           be expanded to acquire  the planned 12,000 to 151000
                           acres*

                                                 33

                      --The-majority of the county's legislature is elected
                        from its, western, more highly suburbanized portion.
                        ,Some persons.residing there-cannot.see a.reason for
                        spending tax 'dollar,s to.buy developmen't rights only
                        in the eastern commercial farming area.,

                      --The programls:1egality had   not been tested in the
                        courtsj.@a.ltbough a county official.believed..it
                        would receive a favorable ruling..

                      -.-The right to subdivide land on  'which,development
                        rights have been.sold is unsettled.     Upon the,
                        owner'.S,death parcels of land can be   willed to
                        several individuals which may result    in its,sub-
                        division.

                      In addition  to these problems, the land   parcels on
                 which rights are  to be purchased are generally-  'not adjoining.
                 This situation could mean the virtual end.of commercial
                 farming 'in--the area., if heavy urbanizing pressure reaches the
                 area and.developed areas are   interspersed among the farms.

                 CONCLUSIONS

                      Each of the various  methods used by State and local
                .governments in an attempt to curb farmland losses has
                 characteristics-*tha.t detract from its effectiveness. It
                 seems.,c.lear that the following element,s need to be present
                 if.a program to retain.farmland is to be successful.

                      --The agricultural area.s should be geographically
                        defined and preferably correspond to areas con-
                        taining the most prime farmland.

                      --Excessive subdivision   of such defined  areas should
                        be.prevented.

                      --There must be  some   compensation to the-landowners if
                        the value of their   la,nd,developed for some other
                        purpose exceeds theagricultural value.

                      --What constitutes agricultural use and prime    farmland
                        should be clearly and specifically defined.

                 Other program-elements,can also be added to make    a farmland
                 retention program work effectively; these are just the
                 basics. The above elements are essentialto the develop-
                 ment of program criteria as   referred to in our recommenda-
                 .tion to the Congress on page 56.

                                                34

                                             CHAPTER 5

                       RETAINING PRIME AND  OTHER FARMLAND-OFTEN CONFLICTS

                             WITH FEDERAL AGENCIES' OTHER   OBJECTIVES

                        In testimony in 1977 on thetloss of prime farmland,
                  the  Secretary of Agriculture concluded, "The best-we [USDA]
                  can  do is to identify our prime agricultural land and en-
                  courage those in decisionmaking positions to maintain that
                  land'in agricultural us6s." Those in decisionmaking posi-
                  tions are generally individuals or-locail or State govern-
                  ment officials. Federal agencies lack the allthority to in-
                  sure the retention of privately owned farmland,-but they
                  can review and revise their own activities which take or
                  encourage the taking of prime and other,farmland. Our analy.-
                  sis of environmental impact statements and other environ-
                  mental review documents for 25 projects of 5 Federal agen-
                  cies indicated that preserving prime and other-farmland was
                  @given little consideration or low priority and was usually
                  outweighed by other interests.

                  PRIME FARMLAND IS TO BE CONSIDERED
                  IN ENVIRONMENTAL REVIEWS

                        Jn an August 30, 1976, memorandum, CEQ directed Federal
                  agencies to consider the loss of prime and 'unique farmland
                  in preparing-the EISs required by the National Environmental
                  Policy Act of 1,969.(42 U.S.C. 4321 et seq.). -,It stated:

                        "Efforts should be made to   assure that such
                        farmlands are not irreversibly   converted  to
                        other uses unless other national interests
                        override the importance of  preservation or
                        otherwise outweigh the environmental benefits
                        derived from their protection. These.benefits.
                        stem from the capacity of  such farmland to pro-
                        duce relatively more food  with less erosion,a,nd
                        with lower demands for fertilizer, energy, and
                        other resources'*

                  According to a  CEQ official,  EI.Ss in process at.the time the
                  memorandum was  issued were exempt   from.-its requirements.

                        The memorandum also stated that   USDA would place a  major
                  new emphasis on reviewing EISs@with respect to prime farm-
                  land. SCS had been responsible for     reviewing,and commenting.
                  on other Federal agencies' E.ISs since 1974. SCS reviewers
                  were to consider, among other things, the amount of prime
                  farmland irreversibly lost.

                                                  35

                        The Secretary of Agriculture's June 1976 expanded.
                  land-@use policy statement (see p. 6) provided that all USDA
                  agencies were to assure -that EIS procedures and reviews
                  thoroughly consider''the impact of major Federal actions on
                  prime farmland. The agenc,ies were also       to review their own
                  programs to insure consistency with the       overall policy to
                  retain prime.farmland.

                  FEDERAL PROJECTS AND ACTIONS WHICH CONVERT
                  OR AID IN CONVERTING FARMLAND

                        Federal projects or programs can-directly       and indirectly
                  result in the conversion of farmland for other        purposes
                  Federally funded highways, dams, and rural sewer and wa@er
                  systems are 'examples of projects@that can take farmland
                  directly. These types of projects, as.well as         other activi-
                 .ties, such as providing mortgage guarantees or        income tax
                  deductions for housing,.can also have an indirect or second-
                  ary impact by allowing or encouraging industrial and residen-
                  tial growth.

                        To determine how Federal agencies treated       the  prime
                  farmland issue and,.in case.s where prime and other        farmland
                  was or would ' be taken, what national interests Outweighed.
                  the benefits derived from protecting farmland, we reviewed
                  EISs and other environmental'review documents prepared for
                  25 Federal or federally assisted projects taking farmland
                  in California, Illinois, Minnesota, North Dakota, Oklahoma,
                  and Pennsylvania. Agencies responsible for these projects
                  were the Department of Transportation (DOT), the Department
                  of Housing and Urban Development (HUD)-, the Army Corps
                  of Engineers (Corps), the Environmental Protection Agency
                  (EPA), and USDA.

                        For,eight  of the projects,    environmental reviews were
                  initiated before the CEQ.memorandum was issued, and they
                  were therefore   exempt from its   requirements. Alsoi five
                  were USDA's Farmers Home Administration projects for which
                  FmHA did not require indepth environmental reviews. The
                  25 projects represented a planned.or actual.conversion of
                  at least 13,057 acres of farmland, of which at        least .1,641.
                  acres.were identified as!prime land.. For some        projects.,,
                  prime land had not    been identified..-

                  HUD  projects

                        Among HUD programs   which  can  affect  farmland is    the
                  title X program under the National Housing Act, as amended
                  (12 U.S*C. 1701   et seg.), which authoriies HUD's Federal
                  Housing Administration    to insure mortgages for development

                                                   36

                  of subdivisions. This program is designed to assist devel-
                  opers to purchase raw Ia  'nd and develop it. Also,.under
                  title II of the act, the Federal Housing Administration
                  provides mortgage insurance for construction of housing
                  for low- and moderate"income families. HUD is required        to
                  prepare an EIS for any project involving 500 ormore living
                  units..

                        We reviewed nine,EISs for HUD projects in California,
                  Illinois, and Pennsylvania.. The EISs addressed the farm-
                  land issue only superficially, if at all. For example, one
                  of the four projects we reviewed in California--a Solano
                  County residential development--required a total of 953
                  acres of farmland. HUD did not consider any of the farm-
                  land.as prime because none..was class I land. In, commenting
                  on the EIS, SCS's California office pointed out,      however,
                  that 20 percent of the land--about 191 acres--was class II
                  land which is also considered prime.. The-EIS listed the,
                  loss of farmland as an adverse-envitonmental impact, but
                  said it could not be avoided if the proposal,was imple-
                  mented. @The EIS pointed out that the project developer had,
                  already sold some of the land to individual home buyers, and
                  HUD said that the developer would proceed with or without
                  HUD's assistance

                        Another,of the California projects was taking 237 acres.
                  HUD's EIS did not identify the number of prime,farmland-
                  acres involved. In com,menting.on the EIS, SCS did not
                  identify prime farmland taken by the project, but sai.d.that
                  the area contained some of the county's most productive land.,
                  The SCS comments included a somewhat standard,phrase about
                  the national concern about prime farmland. The HUD official
                  responsible for the EIS told us he felt t   ,hat the SCS comments
                  were not significant and no further action,'was required.

                        On the Ill nois and Pennsylvania projects, HUD's
                  treatment of the farmland issue was similar. The EISs did
                  not show the issue to be significant and the taking of farm
                  land was, for the most part,.a foregone conclusion. For
                  example, one Illinois housing project involved conversion
                  of 212 acres.offarmland of which 70 acres were identi-
                  fied by SCS-as prime. The EIS addressed,the farmland
                  .issue by stating that conversion from agriculture to housing
                  would have little effect on crop production.

                        In each of these HUD cases,   interest in housing.appeared
                 ..to far outwei.9h the desire to retai'n farmland. However,---
                  HUD often does not have a choic  Ie in selecting   alternative
                  sites and must either accept or reject a developer's pro-
                  posal.' Also, HUD projects oftenare,in areas where develop-
                  mentis imminent and farmland would be converted_anyway@.

                                                  37

                 Without serious.consideration of prime and other farmland in
                 environmental reviews, however,, the probability of having
                 any impact on retaining farmland, especially prime farmland,
                 is remote.

                 DOT projects

                      The EISs for  four highway projects in Illinois,   which
                 took over 1,600 acres of farmland, "showed that the farmland
                 issue was addressed but did not influence the planned taking
                 of such land.. In these case.s interest in  highway construc.-
                 tion appeared to outweigh the.national'interest inretain@
                 ing farmland.

                      Illinois Department of Transportation officials said
                 that,. for most construction alternatives, prime farmland
                 would be taken because about 90 percent of Illinois crop-.
                 land is classified as prime. They said the only alternative
                 to not taking prime farmland would benot to construct a
                 projecti The officials could not recall any project where
                 prime-farmland was the deciding factor in selecting an
                 alternative location.

                      In Oklahoma one recent highway construction project
                 that took prime-farmland involved a 3.2 mile, two-lane
                 highway to connect two other highways. The location and
                 design study report (which was prepared instead of an EIS)
                 discussed the loss of prime cropland but not the number
                 of acres., The report said that "While areas of prime
                 farmland will be required, no limited or food shortage is
                 predicted to result." A representative of the Oklahoma
                 Department of Transportation told us that there had been
                 very little public or other opposition to the taking of
                 prime farmland for highway construction and that lie knew
                 of no projects that had been changed or cancelled because
                 prime farmland would be taken.

                 Corps projects

                      The Corps had proposed three projects in Oklahoma
                 -which would take a total of 8,090 acres of farmland. EISs
                ,for two of the projects were  in process before the CEQ
                 memorandum. In the EISsp the fact that farmland was being
                 taken was not considered serious. For example, one project
                 involved creation of a lake and a loss of 3,300 acres in
                 crops and pasture. The EISF which did not identify how much
                 of the land was prime, stated that "Although agricultural pro-
                 ductivity of project lands will,be foregone, the lake will
                 cause property values to.appreciably increase upstream
                 because of the.proximity to Oklahoma City." In this case,
                 the concern for creating a recreational lake apparently

                                               38

                  outweighed the.loss of farmland. A representative of an
                  Oklahoma City area council of governments.told us that
                  the,area was primarily concerned with attracting additional,
                  industrial development and not the loss of prime farmland.

                       Corps officials in Oklahoma told-us that there had
                  been no general public opposition to the taking of farmland
                  for Corps project-s,, and that SCS had not brought up the sub-
                  je'ct of prime farmland before the CEQ memorandum was issued.
                  A Pennsylvania Corps official said that the Corps would not
                  likely decidle.the merits,of proceeding or not proceeding on
                  a project solely because of the'impact o  In prime farmland.
                  He said.that, if the decision depended only on the issue
                  of preserving prime land, the Corps would probably go
                  ahead with a project..

                  EPA project

                       Some projects which  may take only a small amount of
                  farmland directly can be  a catalyst for activities which
                  take additional land. For example, an EIS.filed by EPA
                  for a waste water disposal facility and sewer lines in
                  California showed that, while the facility itself woul   'd
                  take only 150 acres of farmland, the resulting urban
                  growth was projected to affect about 21700 acres of prime
                  land. The project.was designed to adcommodate a popula--
                  tion 85 percent larger than the present one. The EIS
                  stated that "While the project does not induce this
                  growth, it does accommodate such an-increase in the sense
                  that the provision of waste water treatment is a neces-
                  sary condition for the growth to occur." The futur   e
                  urban growth will also affect farmlands not converted
                  because the.urbanization will act as a nuisance to ad-
                  jacent farm areas and rising,farmland values will make
                  farming An unprofitable use of the land,

                  FmHA projects

                       FmHA furnishes credit and grants to farmers,   rural
                  residents, and communities for various purposess    Some of
                  this assistance.results in the direct or indirect   taking
                  of prime and other farmland. This taking was not    donsidered
                  in processing and approving the FmHA loans and grants which
                  we reviewed on community facility projects in Minnesota,
                  North Dakota, and Pennsylvania. All the projects involved
                  the construction of sewer or water systems or:waste treatment
                  facilities. The purpose of such projects is to upgrade
                  the quality of rural life or'promote economic development
                  and growth. Achievement of these objectives, however,
                  often.result in the.taking of prime orother farmland.

                                                39

                      For example,,_one FmHA project involved a loan of
                 $167,600 and a grant of $177,200 for constructing a sewage
                 treatment plant in Berks County, Pennsylvania. 1/ About
                 11 acres of prime farmland were taken for the project. The
                 farmer who had owned this land.said that it had been the
                 most productive on his farm and that prime farmland was not
                 readily,available in this area. He had won a.number of
                 awards.for corn and alfalfa grown on this land, and he
                 said that, if'the local authorities had not exercised their
                 power of eminent,domain, he would not have sold it. The
                 FmHA county supervisor predicted that this project would
                 enable the area served to greatly increase its population
                 which previously had been-limited by lack of these-facili-
                 ties, Within 15 years, the area's population is expected
                 to triple. The:county supervisor said that this growth
                 would use up some of Pennsylvania's best farmland.

                      At the time of our review, two FmHA water development
                 projects near Sioux Falls, South Dakota, were.being
                 challenged in U.S. DistrictCoUrt.. The complaint was that
                 they encourage urban sprawl, destroy prime farmland, and
                 pollute existing ground water supplies. The suit alleged
                 that FmHA's actions were inconsistent with.USDA policies
                 favoring the protection of farmland, and that a full EIS
                 should have been prepared.

                 AGENCIES' PROCEDURES IN ADDRESSING
                 THE PRIME FARMLAND I UE

                      The CEQ memorandum to consider the effects on prime
                 farmland requires Federal agencies to address.complex
                 issues, such as what importance should be attached to     re-
                 taining prime farmland and-what:other national interest or
                 interests should override this importance. Neither CEQ
                 nor USDA has issued any guidelines or-interpretations to
                ..help Federal agenc*ies further evaluate the impact of the
                 loss of prime farmland.

                      A CEO official told us that the Council has a study
                 underway to determine whether EISs for proposed Federal
                 or federally assisted projects are adequately considering
                 and discussing the impact the.projects would have on
                 prime farmland. The results.of the study are expected to
                 be available in the fall of 1979.

                 I/EPA also granted this project   $2,163,524. The local share
                   was $,1111712.

                                                40

                        The  degree of  consideration of prime   and  other  farmland
                   varied greatly among@the Federal    agencies.we r  Ieviewed.. HUD
                   had provisions  forconsidering prime farmland      'before the CEQ
                   memorandum was  issued. However,its 1975 guide for assessing
                   environmental impacts defined only cla    'ss'I land as prime,
                   whereas SCS defines generally all class I and II and some
                   class III land  as prime. The'HUD guide also provided a
                   rating system for the degree of project effect on prime
                   soils. If a project was on class II through IV land with
                   no adjacent class I landi the project was to be rated as
                   having only a moderate effect onagriculture. At.the time
                   of our review, HUD was preparing a training manual which
                   identifies class I and II land as prime farmland., A repre-
                   sentative of HUD's Chicagg,office considered the CEQ
                   memorandum as simply a reminder to address the prime       farm-,
                ..land issue since HUD had provisions for considering.prime
                   land already.,

                        The Illinois  Department of   Transportation which
                   prepares EISs for  DOT's Federal   Highway Administration
                   also had provisions for  *considering the loss.of farmland
                   before the CEQ memorandum was issued.. These provisions
                   called for gathering information    on (1) the number of
                   acres affected, (2) the types of    crops affected, and (3)
                   the percentagelof farmland in the county. The guidelines
                   point out that "The taking of only a portion of the farm-
                   stead may make it uneconomical and in.ef.ficient'to farm
                   the remainder." The Illinois Department of Transportation
                   also prepared additional guidelines after the CEQ memorandum
                   was received to help insure appropriate consideration
                   of prime farmland.,

                        In contrast to  HUD and  the Illinois Department of
                   Transportation,, the Oklahoma Department of,Transportation,t
                   the Corps of Engineers, and EPA did not have any guide-
                   lines otherthan-the CEQ memorandum at the time of our
                   fieldwork. The Chief of the Federal Requirements Branch
                   of the Oklahoma Department of Transportation indicated.
                   that he had not formulated any guidelines because of the
                   small number of people on his staff and because he thought
                   that he would remember to consider the issue. The Corps
                   incorporated the CEQ memorandum -in its directives, but the
                   Corps office responsible for Oklahoma was just starting
                   to formulate an approach to address the prime land issue.

                       At the  time of our fieldwork, EPA had no formal policy
                   for protecting farmland. However, in September 1978 it
                   adopted a new policy to protect prime and other eriviron-.
                   mentally significant farmland. The policy requires EPA
                   employees to

                                                  41

                       --support State and local farmland
                                                               protection,efforts
                         and strengthentechnical assistance to State and'
                         localgovernment@, for protecting@farmland',

                       --congider the effect of air     and water pollution
                         regulations on farmland,

                      .--consider in agency enforcement     actions the local
                         significance and economic value of farmlands to
                         communities,

                       --encour 'age-regional water quality management and
                         solid waste disposal plans that safeguard fertile
                         soils,@

                       --identify additional areas for research on the.
                         environmental roles of farmland, and

                       --increase public awareness of the environmental
                         value of farmland.

                 The  new EPA policy specifically prohibits locating sewer
                 interceptors and treatment plants on environmentally
                 significant farmland unless they are necessary to eliminate'
                 existing discharges and serve existing habitation.

                       For the FmHA projects we    reviewed, the respective
                 FmHA  county supervisors were required to prepare a brief
                 FmHA  environmental impact assessment form that did not
                 take  into account the impact oftaking prime and other
                 farmland.. Based on the county supervisors' assessments,
                 the FmHA State Directors ruled that EISs were not needed.

                       FmHA representatives told us in June 1977 that USDA's
                 policy on preserving prime farmland,conflicted with FmHA
                 programs. FmHA had not provided written guidelines to its
                 field offices to implement the-USDA policy. It was sug-
                 gested that-this, was primarily because FmHA was attempting
                 to develop ways of implementing the USDA policy And still
                 carry out its rural area programs. In the March 1, 1977,
                 Federal Register, FmHA had published proposed rule changes
                 stating that locations of TmHA projects

                       "Shall be in compliance with Secretary's
                      .Memorandum No. 1927 concerning preservation of
                       prime agricultural lands. Activities which         ir-
                       revocably commit prime lands to non-agricultural
                       uses may be approved          only when there are
                       no suitable alternative sites and when the ac-
                       tion is' in response to overriding public'need."

                                                  42

                       FmHA officials told us, in March 1979,that the proposed.,
                  rules never became effective, but that they -were working
                  toward incorporating USDA's October 1978 land,-use.policy
                  statement on the preservation of*prime farmland (see p. 9)
                  into the agency's operating procedures. In its     Icomments
                  (see app. I), USDA said that, since our interview with the
                  FmHA representatives in June 1977, FmHA had%taken steps to
                  bring operation of its programs into compliance with USDA's
                  land-use policy statement.

                       We believe the lack of further guidance     from.CEQ,or
                  USDA on ho w to address the farmland issue in.'environmental
                  reviews' explains, in part, why some environmental reviews
                  have not seriously considered the projects' effects on*
                  pr ime and.other farmland.. Guidance is needed.on how much
                  consideration should be given to the taking. of prime,and
                  ot.her'farmland in making project decisions.

                  The StS role in commenting   on EISs

                       in reviewing an EIS,   SCS is to determine if  the project
                  will convert prime farmland and', if so, whether   'the subject
                  has been adequately addressed. Federal agencies will some-
                  times contact SCS before filing EISs and,request    information
                  as to.whether their proposed projects will take prime farm-
                  land   The information then can be included in the.EISs.
                ''In its comments, SCS generally identifies prime soils and
                  often includes a statement similar to that i   h the CEQ
                  memorandum, such as:

                       "Every effort  should be made to  assure prime
                       farmlands are  not irreversibly converted to.
                       other uses unless other national   or local
                       interests override the importance of preser-
                       vation or otherwise outweigh the environmental
                       benefits derived from their protection.. We,
                       are concerned.with the co.ntinued.and accumula-
                       tive effects of using prime farmland and-other
                       Productive agricultural land for other, uses
                       of an irreversible nature."

                       SCS officials in  Tllinois., Oklahoma, and Pennsylvania
                  felt that their primary purpose   in commenting on EISs was
                  to make public that prime'farmland would be taken.. They
                  believed that the net effe  ct of the CEQ,memorandum was to
                  provide a public forum for the issue. They could not re-
                  call'.any Federal project that was cancelled or altered
                  because it was taking prime farmland.

                                                 43

                      An SCS headquarters official    told us that SCS often is
                 not aware of a-proposed project until    the draft EIS is pre-
                 pared and filed for comment. He said     that SCS could be more
                 helpful in providing information on prime farmland and the
                 impact that proposed projects could    have on prime farmland,
                 if it-was notified about such projects while they were still
                 @in-an early planning stage.

                 CONCLUSIONS

                      Federal  and federally assisted projects.often    result
                 in the direct and/or indirect taking',of prime and other
                 farmland.' While this is sometimes unavoidable, the EISs
                 and other environmental review documents we analyzed i    'ndi-
                 cated that the-loss of farmland, particularly prime farm-
                 land, is not always recognized as a serious problem or is not
                 given the consideration it warrants.

                      Although CEQ issued a memorandum in August 1976 direct-
                 ing Federal agencies to consider the loss of prime and unique
                 farmland in preparing EISs, neither CEQ nor USDA has issued
                 further guidelines or interpretations to help Federal agen-
                 cies deal with the complexities of balan'cing.the preserva-
                 tion of farmland with other national interests. As a result,
                 the consideration given to prime and other farmland after the
                 CEQ memorandum was issued did not appear to be much different
                 than that given previously.

                      Part of the problem may lie in the conflict between
                 the information regarding the importance of preserving prime
                 farmland which SCS furnishes agencies for their use in
                 preparing EISs and other USDA publications which cite large
                 potential cropland reserves and production capabilities.
                 It is important that USDA agencies provide their field
                 offices with written guidelines for implementing USDA's
                 po'licy on preserving prime farmland. Control mechanisms
                 need to be included in operating procedures,to identify the
                 taking of prime-farmland and its consequences.

                      Government-wide criteria is needed for making meaning-
                 ful evaluations of the significance of losing prime and
                 other farmland. Such criteria should provide the framework
                 to quantify the direct and indirect farmland losses and the
                 impact of these losses on current and future agricultural
                 production and related issues.

                 RECOMMENDATIONS'TO'THE SECRETARY OF
                 AGRICULTURE AND THE'CHAIRMAN OF.CEQ

                      We recommend.that the Secretary of'Agriculture and the
                 Chairman of CEQ 'undertake a joint effort to develop criteria

                                                 44

                 to guide Federal departments and agencies In determining and
                 evaluating the impact of their proposed projects and actions
                 that affect prime and other farmland. The criteria should
                 be directed'@at quantifying the loss of.prime and other farm-
                 land,.determining both the direct impact of such loss.and
                 the indirect or secondary impacts on changes in land use
                 that might be induced by the project or action, and balancing
                 such loss with other national interests. Federal departments
                 and agencies that would be affected by such criteria should
                 be invited to participate in the development of the criteria.

                      We recommend that the Chairman of CEQ instruct Federal
                 departments and agencies to include in their EISs and other
                 environmental review documents a discussion of their analy-
                 ses.relating to the criteria recommended above.

                      We recommend also that the Secretary of Agriculture
                 insure, through periodic reviews, that all USDA agencies
                 evaluate the loss of prime and other farmland in their..
                 project approval processes in consonance with the Secre-
                 tary's October 1978 land-use policy statement. Agencies'
                 operating procedures should.be revised as necessary to pro-
                 vide that, when it comes to deciding where to spend money,
                 low priority classification be given.to projects where
                 .satisfactory alternatives to losses of prime and other farm-
                 land do not exist, unless there are overriding, justified
                 reasons for doing otherwise.

                 AGENCIES' COMMENTS

                      USDA said it agreed with our recommendations to   the
                 Secretary of Agriculture. (See app I.) It saidthat it was
                 joining with CEQ in the leadership of a study on the reten-
                 tion and conversion of agricultural lands which would in-
                 clude our recommendations.

                      CEQ did not provide written comments on the report,
                 but a CEQ official said that the Council agreed with our
                 conclusions and the need to develop and evaluate compre-
                 hensive information on the impact of Federal agency pro-
                 grams and actions on agricultural lands. He said that,
                 this would be one of the objectives of the forthcoming
                 interagency study. The official said that our recommenda-
                 tion that CEQ issue instructions.to Federal departments
                 and agencies would be considered in carrying out the study.

                      DOT said that it supported our recommendations and
                 would like to be included as a lead agency in the effort
                 to develop criteria for determ 'ining and evaluating the
                 impact of Federal projects and actions that affect prime

                                              45

                  farmland. (See app. II-) It believes that much can be
                  done in the area of land-use controls, with the coopera-
                  tion of local governments, to protect prime farmland and
                  to direct development and growth into other more suitable
                  .areas. It said that controlling access is one important
                  transportation technique which can be used to supplement
                  these efforts. DOT-also said that it was hopeful that the
                  continued 'shift of national emphasis from the construction
                  of new highway facilities to the upgrading of existing
                  facilities would considerably lessen the conversion of
                  prime farmland for transportation projects.

                       HUD said that the housing sector's major problem
                  in dealing with prime and unique farmlands is conflicting
                  guidance on,what constitutes such farmlands and that a
                  second problem is the lack of established policy on how
                  to treat such farmlands when and if they are identified.
                  (See app. III.) HUD agreed that criteria was needed to.
                  guide agency assessments and said the criteria should be
                  clear, specific, and firmly based on the national urban
                  ,policy. It also'agreed that such criteria should be
                  developed in consultation with other Federal agencies.

                       HUD pointed out that it has provided financial
                  assistance to many States and municipalities through its
                  program for developing comprehensive plans and management
                  processes to anticipate the impacts of development on
                  natural resources, including prime farmland, before
                  specific development decisions are made. It said it
                  also has developed the concept of areawide EISs to help
                  anticipate and assess the cumulative impact of urban de-
                  velopment in a specific geographic area rather than on
                  a project-by-project basis. It said that this concept
                  links environmental reviews to local comprehensive plans4

                       The Corps said that it also is giving increased
                  consideration to the taking of prime.farmland for.water
                  resource projects. (See app. IV.) It cited two of its
                  projects which were recently deauthorized in part because
                  they would have taken several thousand acres of.prime farm-
                  land.

                       EPA did not comment on our conclusions and recommen-
                  dations.

                       On June 14, 1979, USDA and CEQ signed a memorandum of
                  agreement to undertake a jointly sponsored national study
                  to determine the availability of the Nation's agricultural.,
                  lands, the extent and causes,of their conversion to other
                  uses, and the ways by which these lands might be retained

                                                  46

                 for agricultural purposes. Some ofIthe study objectives
                 are to determine and evaluate the

                      -impacts of industrialf urban, transportation,,.and
                        energy development, and other.competing land useson
                        the.future availability of agricultural lands;

                      --effects of Federal programs and actions on agricul-
                        tural,land;

                      ,--impacts of agricultural land losses on the Nation's
                        capacity to.meet future domestic demand for food,
                        fiber, and energy and to develop future foreign
                        pol-icies r,elati.ng to international trade and humani-
                        tarian.assistance; and

                      --economic, social, and environmental effects both of
                        converting additional lands to agricultural use and
                        of alternative methods for preventing or retarding
                        the conversion of.agricultural lands to nonagricul-
                        tural uses.

                 it  is also going to assess State and local governments'
                 efforts to protect and retain agricultural lands and iden-
                 tify and disseminate information on the ways.in which these
                 efforts can be made more effective.

                      Federal agencies whose programs and actions affect
                 agricultural land are going to participate in carrying out
                 the study which is to be completed by January 1, 1981., A
                 report on the results.is to be submitted to the President.

                                              47.

                                             CHAPTER 6

                      NATIONAL.POLICY ON, AND FEDERAL ROLE IN, RETAINING

                          .FARMLAND HAVE NOT BEEN FIRMLY ESTABLISHED

                       While.farmland, particularly prime farmland, is a
                  national resource whose retention is of national importance,
                  the Federal Government's role in that retention is still
                  evolving. In some laws dealing with other land-use issues,
                  such as surface mi.ning and soil conservation, the Congress
                  has recognized the importance of prime farmland. However,
                  it has not enacted a comprehensive policy defining the na-
                  tional importance of retaining prime and other farmland,
                  setting goals for its retention, and delineating the Federal
                  role,

                       Some Proposed legislation   has been introducted to,*
                  among other things, establish a national farmland policy,
                  describe Federal responsibilities in advancing that policy,
                  and authorize Federal technical and financial assistance
                 .to States and their political subdivisions to carry out
                  farmland preservation pilot projects. However, such legis-
                  lation has not yet been enacted.

                       Because governmental control of.land     use traditionally
                  rests at the State and local levels, we asked the States
                  for their views as to what the-Federal role should be in
                  .retaining farmland and what benefits they thought would ac-
                  crue from a national policy on this matter. Their responses
                  are presented later in this chapter.

                  FEDERAL EFFORTS ON LAND-USE PROPOSALS

                       The Congressional Research Service has identified 122
                  Federal programs affecting various uses of land. Also,
                  several federal laws deal with the issue of prime and other
                  farmland. These include:

                       --The'National Environmental Policy Act of 1969, which
                         requires that prime farmland be considered in en-
                         vironmental reviews and impact statements prep     ared
                         for Federal projects.

                       --Section 302 of the Rural Development Act of 1972
                         (7 U.S.C. 1010a), which directs the Secretary of
                         Agriculture to carry outa land inven.tory and
                         monitoring program, including studies and surveys
                         of.landl-use changes and trends, and to issue at not
                         less than 5-year intervals a land inventory report.

                                                 48

                      --The Surface Mining Control and  Reclamation Act of
                        1977 (Public Law 95-87, 91 Stat. 445), which contains
                        special provisions for the mining and reclamation of
                        prime agricultural lands.

                      --The Soil and Water Resources Conservation Act,of
                        1977 (Public Law 95-192, 91 Stat. 1407), which directs
                        the Secretary of Agriculture.to continually appraise-
                        the Nation's-soil resources.

                      Since 1970 the Congress has also considered, but not
                 passed, various other national land-use legislative propos-
                 als which would have affected farmland. Among these was
                 the proposed Land Use Policy and Planning Assistance Act
                 (S. 268, 93d Cong., lst'Sess.), which passed the Senate
                .in 1973 but failed in the.House. The purpose of this and
                 other similar bills was to require comprehensive land-use
                 planning and management at the State level and/or to provide
                 assistance to States for land-use planning. This planning
                 would have included the consideration of farmland. Opponents.
                 of this legislation felt that private property rights were
                 endangered'and the Federal Government might try to indirectly
                 control planning through grants and guidelines to States.

                      Two bills (S. 9.84 and H.R. 3510) introduced in-the
                 94th Congress would have est 'ablished,a voluntary-system of
                 Federal grants to assist States in developing and imple-
                 menting land resource and planning programs., Although the
                 bills differed in some matters, both would have required
                 participati:ng States to develop land use programs which
                 included, among other things, policies and procedures to
                 promote continued use.and productivity of prime food- and
                 fiber7Producing lands. H.R. 3510 would also have required
                 Federal public.land agencies to develop and maintain land-
                 use plans for areas under 'their-jurisdiction. Hearings.were
                 held on S. 984 in April and May 1975, but no further action.
                 was taken. Hearings on H.,R,. 3510 were held in March and
                 April 1975. On July 15, 1975, the House Interior Committee
                 voted not to report H.R. 3510 by a vote of 23-19.

                 Legislative proposals in the 95th Congress

                      Nine bills l/ introduced in the 95th Congress, but 'not
                 passed, would have established.a national agricultural   land.
                 policy and delineated the Federal Government's role in

                 I/House bills  4569, 5882, 5883.,'7235, 8789,'11020, and 11122
                   and Senate bills 1616 and 27.57.

                                               49

                  advancing that policy. Howeverr none of the bills would
                 ,have"set a.national goal as to the amount and-classes of
                  land to be.-preserved as-farmland,.

                       The bills, whose language  -was identical or essentially
                  similar, 1/@proposed a policy generally as follows.

                       "The,Congress, recognizing theimpgrtance.of
                       high levels of agricultural productivity to the
                       economy, to,*the quality of the environment,   to
                       human health and welfare, and to the position
                       of.the-United States as an,international food-
                     -producing leader, declares that it is the policy
                       of the Federal Government, in cooperation with
                       the governments of@the States and political
                       subdivisions of Statest to use.all practicable
                       methods to retain, protect, and improve agri-
                       cultural land."

                       To advance 'that policy, the bills.provided that-it would
                 ,be the,,responsibility of the Federal Government to use all
                  practicable methods cons is,t-ent with other considerations of
                  national policy,to, among other things,

                        -reduce the amount  of land which is annually being
                       .,converted from agricultural uses to nonagricultural
                         uses;

                       --limit the  encroachment of industrial activities  in
                       .,high-quality agricultural  areas if such activities
                       .-deprive cropland.s of needed water or produce yield-
                         reducing  air pollution;

                       --inclu-de,,in EISs,under the National Environmental
                         Policy Ac t of 1969 an assessment of the effects
                         Pf-major  Federal actions on-farmland;

                       --inventory, assess, and evaluate the Nation's farm-
                         @land on a continuing basis to assure that public
                         and private decisions are made on an informed
                         basis.;

                       --cooperate with the  States and political subdivisions
                         of States in retaining, protecting, and improving
                         'farmland.; and

                  !/Senate bill 1616 included range and forest@land in its
                    policy statement and objectives.

                                               50

                     .--require that all activities carried out by Federal
                        .,departments and agencies which affect farmland.be
                        effectively coordinated and improved to protect
                        such land.

                      The bills called for-establishing an agricultural land
                 review commission to (1) study  farmland,,especially   its
                 quantity, quality, location, and financing, (2) study the
                 relationship of farmland as a national concern to other
                 national concerns, such as energy, theeconomy, urban growth
                 and development, foreign relations an6trade, and humani-
                 tarian aid, and..(3) recommend to the President, the Con-
                 gress, or.the.Secretary of'Agriculture,v,ar-ious methods of
                 accomplishing the national policy.

                      The bills also proposed a-program, tobe     administered
                 by the Secretary of Agriculture,, providing technical.and
                 financial assistance to,States and their political sub-
                 divisions to carry out pilot farmland preservation pro3ects
                 that would demons'trate and test methods of reducing the
                 amount of land annually being converted from agricultural
                 or forestry uses to.nonagricultural or nonessential uses.
                 Federal financial assistance was.to be limited to 75 per-
                 cent of project costs as de -fined in the bills (except for
                 S. 161.6 which placed the limit at 60 percent).

                     @The bills provided -that nothing therein would authorize
                 the Federal Government to regulate the use of privately
                 owned land; deprive landowners of their rights to property
                 or to income from @he sale of property; or diminish the
                 existing authority, rigbts,.,and responsibilities of the
                 States and their political subdivisions relating to land
                 use, zoning, taxation, or any other aspectof theregulation,
                 utilization, and disposition of public or private lands
                 within their respective jurisdictions.

                      The.House Agricultur-e Committee's  Subcommittee on
                 Family Farms, Rural Development, and Special Studies held
                 hearings on H.R. 5882 in June.1977 and marked up the.bill
                 but never voted on it. The Subcommittee on Environment,
                 Soil Conservation, and Forestry of the Senate Committee
                 an Agriculture, Nutrition, and Forestry held hearings on
                 S. 1616 in August 197.7 but took no further action,

                      All of the bills died  at the end of  the 55th Congress
                 and, at the present time, there is no specific congressional,
                 policy statement on the retention of prime or other farm-
                 land. As of June 26, 1979, three farmland protection
                 bills had been introduced in the 96th.Congress. Two of
                 these, H.R. 2551 and S. 795,' are generally similar to those
                 discussed above. The other-bill, H.R. 4227, proposes some

                                               51

                  of the same features but would provide     for the land.grant
                  university and extension system to play a major role-in
                  farmland protection e*fforts.

                  STATES' VIEWS ON THE FEDERAL
                  ROLE IN RETAINING FARMLAND

                       Thirty-one States offered views     on the Federal   role.
                  These ranged from no direct Federal role to advocacy of a
                  national policy on retaining farmland. 'The-central theme
                  of the States' responses was that the Federal role should
                  be to guide and help State and local efforts, not control
                  them.

                  Federal agencies should reexamine their 2rograms
                  and activities which take farmland

                       Responses from 16 States indicated that Federal agencies
                  should 'reexamine their programs and activities which take
                  farmland. For example, Illinois said:

                       ."Many federally provided or supported activities
                       have a direct or indirect impact on the supply of
                       farmland. The first step in an@effort to iden-
                       tify the Federal role    in farmland retention would
                       be a study to identify and assess what Federal
                       activities affect farmland supply."

                  Other States suggested that Federal,activities related to
                  highways, dams, and housing,be examined.

                       North Dakota.pointed   out that some Federal programs are
                  in conflict on retaining farmland. 'It said that HUD pro-
                  grams'foster community development that is contiguous to
                  existing cities and that   this is beneficial because it
                  saves money and farmland   by using existing.public facili-
                  ties and utilities. It contrasted this to FmHA-programs
                  which help finance rural.housing developments outside
                  existing communities-. These developments, it said, are
                 ,more costly and. take more farmland. North Dakota also
                  noted thatthe best farmland is often taken.because it has
                  physical features which make it attractive for development;
                  that is, i.t is.usually relatively level and,well drained.

                  Federal'GoVernmeht should'provide data and
                  information'on the.quality of farmland.

                       State and local governments attempting to      retain prime
                  and.other farmland need information on soil capabilities
                  and qualities and uses. This so.il.information is provided
                  primarily by SCS which'is currently mapping prime soils

                                                  52

                 throughout the  United States.'   The soil inventory is'not
                 expected to be  completed until   1986.. Fourteen States    indi-
                 cated that this is a proper Federal role, but several      thought
                 that the work should be expedited.

                 Federal Government should    formulate a.national
                 policy or guidelines on farmland reteEtion

                       Fourteen States said  that  the Federal role should   be to
                 provide a national policy   or guidelines to States or locali-
                 ties on retaining farmland. According to Pennsylvania, a
                 national policy and program for retaining farmland would
                 benefit that State by

                       --strengthening State interest   in preserving   farmland,

                       --encouraging State policies   for retaining farmland
                         and assisting development of   strong local,farmland
                         retention programs,

                       --providing an opportunity for   funding of  State programs
                         to retain farmland, and

                       --maintaining a viable  agricultural economy   in Pennsyl-
                         vania and contributing to better urban/rural    land
                         use.

                       California believed that a Federal policy to preserve
                 land  would put,focus'on-the,issue and show that the Federal
                 Government is taking a leadership role. It said, howeve      .r
                 that implementation-of such,a policy should occur at the
                 State and local levels. Idaho.s'aid:

                       "The federal government could assist greatly     in
                       the development.of guidelines which could-be
                       used.by states-and  local governments.in the
                      .planning and implementation of-agricultural
                       protection.policies and development practices."
                       An official of Hawaii's  Department of Planning   and-
                 Economic Development could-fore.see the following benefits:

                       --States would get better s.upport-from other Federal
                         agencies, such as. SCS.

                       --More,dollars might be committed for   agricultural
                         research with attendant b.en'efits, such as developing
                         new plant varieties.

                                                53

                                 emphasis.would be placed on nuraldevelopment
                         and the Rural Development Act of 1972 might be funded
                         and progress  made toward achieving its goals,

                       --It would  help stabilize food prices.

                       --States would act more vigorously in land-us'e'pl  anning.

                  Hawaii's high economic activity and high growth rate--
                  presently twice.the national average--is causing acute    pres-
                  sures toward'conversion of,much of its prime farmland.

                  Federal Govetnment'should
                  not play.a direct role

                       Thirteen States, including some which suggested certain
                  Federal roles supportive of State and local efforts, indi-,
                  cated that the Federal Government should not play a direct
                  role in retaining farmland. Land-use controls belong, they
                  believep to State and local governments. Oklahoma said:
                  "The preservation of farmland is considered a matter of state
                  concern and one in which the State's citizens se  .em to'Prefer
                  to express their opinions to local and state elected offi-,
                  cials." 'The theme that the State-and local g*overnments
                  rather than the Federal Government.should regulate-land
                  @uses was consistent throughout the States' res Iponses.

                  Other Federal roles

                       Seven States said that the*Federal.Government     should
                  provide financial support for planning or conducting farm-
                  land retention programs. Kentucky said that, if measures
                  are required to keep farmland in production, the Federal
                  Government should make up the monetary difference for
                  keeping the land in production. New Jersey said that the
                  Federal Government should fund demonstration projects    in
                  States which are under intense development pressures.
                  Oregon said there should be financial assistance to State
                  planning programs which are trying to protect farmlands.

                       'Seven States also said that the Federal Government
                  should provide advice .to the States,, as appropriate. For
                  exampler Maine said that the Federal Government and its
                  agencies should play a supportive role in encouraging and
                  making available the resources they have to make certain
                  that the individual States make the best possible judgment.

                       Four States thought that public education should be
                  provided on the importance of farmland. North Carolina
                  said that a Federal role could be to.create an awareness
                  of the need to maintain prime and important farmlands as a

                                                54

                  national resource for the Nation.  Islong-term needs        Oregon
                  said'that the-Federal Government could provide 11puhic
                  education concerning the loss of this nation's important
                  agricultural  lands, the need to  .protect them and,their
                  value to us,            Finally, three States suggested that
                  some type of  Federal tax incentives be provided     for retain-
                  ing farmland.

                  CONCLUSIONS

                       There is not yet a national policy or guidelines on,
                  retaining farmland. Nor is there,& national goal as to the
                  amount of land, especially prime land, that.should be pre-
                  served as farmland. A national goal should be established
                  after giving consideration to prospective world food needs"
                  agricultural.technology, and the availability of the basic
                  resources needed to produce food, as wellias to other na-.
                  tional concerns such as the economy and urban growth and
                  development. These    considerations need not,,be incompatible.
                  An overall national goal should'be determined through re-
                  gi-onal analyses by land class or groups of land classes.
                  Once such a goal is established, the Congress should'provide
                  for periodic assessments to-@see if land conversions are
                  eroding regional'acreage goals.

                       A widely publicized national    policy identifying the
                  national interest in and national    goals for protecting and
                  retaining prime and other farmland could

                       --serve  as an effective basis for guiding     and  support-
                         ing land-use decisions by Federal agencies and,land-
                         use planning.and decisions by State and local govern-
                         ments,

                       --encourage inter-governmental cooperation     and  coordina-
                         tion in managing one of our Nation's most important
                         resources, and

                       --promote public'investment patterns that will minimize
                         adverse impacts on farmland.

                       Overall,, the States believe that the    Federal role in..
                  retaining farmland shouldbe to guide and      help State and
                  local.government efforts, not.control them. In addition to
                  formulating a national policy and guidelines on retaining
                  farmland, the Federal-roles most frequently suggested by
                  the States we re that Federal agencies review their programs
                  or activities thattake farmland and provide data and infor-
                  mation on farmland.

                                                   55

                       SCS is providing information on farmland and    is mapping
                  the Nation's prime soils.. -There-is a need,.however, for Fed-
                  eral agencies to better assess the impacts of projects that
                  are federally financed, assisted, or otherwise controlled..
                  Recommendations addressing this need are included at the end
                  of chapter 5.

                  RECOMMENDATIONS TO  THE CONGRESS

                       We recommend  that the Congress  (1) formulate a national
                  policy on protecting and@@ retaining prime and other farmland,
                  (2) set a national goal as to the amount   and class of farmland
                  that should bepreserved to meet current    and future needs,
                 .(3) periodically assess whether the loss   of farmland is,
                  eroding the maintenance of established,goals, and (4) delineate
                  the,role the Federal Government can and should play in guiding
                  and helping State and local efforts to retain farmland.

                       We f-urther recommend that, if the  Congress.decides   to
                  provide Federal support to States and political subdivisions
                  to carry out farmland preservation programs as proposed in
                  bills now'before the,Congress, it specifical'ly.set out the
                  criteria which such programs have to meet. The elements
                  listed in the conclusions section of chapter 4 should be
                  considered in developing such criteria.

                                                 56

                                            -CHAPTER 7

                               ,.FURTHER ANALYSES NEEDED OF-LAND

                           POTENTIALLY  AVAILABLEJOR-CROP'PROMMON'

                       Periodic estimates  of how  much additional   cropland can  be
                 brought into production   are important because.they indicate
                 the Nation's capability   to supply future food demands. They
                 ,are particularly imp6ttant becauselof the uncertainty that.
                 other factorstsuch as technology, additional irrigationr
                 and fertilization,. can maintain the.continued growth of-agri-
                 cultural'production. Potential-,cropland estimates also help
                 put into,perspective debate over the amount of cropland being
                 taken for other uses.

                       USDA's past estimates   of potential cropland have    resulted
                 from  statistically projected aggregate acreage inventories
                 based primarily on the physical or latent capability of land
                 to be  cultivated. Other factors, however, can limit      the
                 amount of such land,that can realistically be expected to be
                 cropped. These include existing commitments of potential
                 cropland to other uses, including other agricultural       uses;
                 the probability of conversion   ., given the economic conditions
                 needed to induce owners to bring additional land into cul-
                 tivation; and certain physical barriers to conversion..

                       SCS's 1977 report on its 1975   potential cropland study
                 mentioned some of these factors but they were not further.
                 analyzed to quantify the impact they could have on the
                 potential cropland estimates. According,to USDA (see app.
                 I), owners' views and varying economic conditions were
                 purposefully  -not.included in the 1975 study because of     the
                 statistical sampling nature of the study-

                       SCS is currently analyzing potential cropland again
                 to fulfill the Department's obligation under the Soil and
                 Water Resources Conservation Act of 1977, whichr among
                 other things, requires the Secretary of Agriculture to col-
                 lect data on the quality and quantity of soil resources.

                       Our visits to 93 potential cropland sites, which SCS
                 had identified in North Dakota during its current study, and
                 our discussions with the landowners showed that all but three
                 of the sites were already being used for some agricultural
                 purpose  and that, for about 90 per-cent of the sites, the land-
                 owners would not convert them to crop production at existing
                 commodity prices. The information we obtained suggests that
                 USDA needs to further analyze potential cropland estimates in.
                .terms of the possible impact of ownership and use factors on
                 the land's availability for. cropping., Combining. potential

                                                 57

                  cropland estimates with-su                    el1asvith
                                           I ch a 'nalyses, as w
                  information on technological"barriers and irrigation
                  and energy considerations,' would present a morecomplete
                  and realistic picture of land available for crop production..

                 @ESTIMATES'OF POTENTIAL CROPLAND

                        SCS's past estimates of potential cropland have included
                  estimates derived from its 1967 conservation needs inventory
                  KNI), and its 1975 potential cropland study. The CNI's pri-
                  mary purpose was-not to estimate'potential cropland, but to
                  identify, based on a-random sampling procedure, land use, soil
                  capability, conservation problems, and conservation treatment
                  needs for all land except,Federal noncroplainds, urban or
                  built-up areas, and water areas. The land included in
                  the CNI--a total of 1,438 million acresUor about 63 percent
                  of the Nation's land are6--was then categorized into land
                  capability classes I through VIII.

                        All class I through'III land which was not in cropland--
                 -a total of 266 million acres--was assumed to be potential
                  cropland. A later USDA'estimate I/ indicated that about
                  152 of the 266 million acres had Eigh or medium potential
                  for conversion.

                        The 1975 potential cropland study, based    on a rela-
                  tively small subsample of the 1967 CNI sample     points, esti-
                  mated that a total of 111 million acres had high or medium
                 'potential foe conversion to cropland. In reporting the re-
                  ,sults of this study, SCS said that, of the 78 million acres
                  of high potential land,.about 35 million ac'res'had no develop-
                  ment problems and could be converted to Propland simply by
                 ,beginning tillage. It described the remaining high potential
                  land (about 43 million acres') as having problems, such as wind
                  and water,erosion-hazards, that needed to be corrected through
                  installation of relatively inexpensive conservation practices
                  before it could be converted to cropland. It also said that
                  most of the 33 million acres of medium potential land would
                  require significant investments in conservation practices
                  and development measures to make them suitable for growing
                  crops.

                        In its current study to estimate potential     cropland,
                  SCS is using a sampling approach similar to-its     past proce-
                  dures.

                  i/"Farmland: Will There Be Enough?!      USDA-ERS, ERS-5.84,
                    May 1975.

                                                 58

                  FACTORS'OTHE9 THAN'LAND'S'PHYSICAL'PPOPERTIES
                  CAN AFFECT LIKELIHOOD OF@CONVERSION

                       To get an.idea of.the  extent.to which.factors other     than
                  the land's physical properties--particularly current agricul-
                  tural use of potential cropland and economic.considerations--
                  might affect the likelihood of such'land being used for crops,
                  we visited allowner/operators.of potential cropland, identi-
                  fied in SCS's current study, in 12 contiguous counties. in
                  south-central North Dakota. Almost all,of the 93 sample
                  points of potential croplarid-we,visited were used for some
                  agricultural purposer and owners of nearly 90 percent of.the
                  land believed that conversion to crop production would not be
                  practicable under existing.economic conditions.

                  Most' land' class'ified'.. a.spotential* cropland
                  is'already'in'a@ricultural'i?roduction

                       SCS had classified.23 of the 93 North   Dakota sample
                  points as having high conversion potential   and 70 as having
                  medium conversion potential. -In the forthcoming SCS projec-
                  @tion, these sample points are expected to represent about
                  740,000 potential cropland acres. Ninety*of the 93 sample
                  point"areas were being used for pasture or rangeland and
                  3 were committed to wildlife habitat use under conservation
                  .contracts or easements.

                       For example, a sample point in Burleigh Countywas
                  located in.a pasture. SCS classified the point as having high.,
                  conversi.on potential, although the pasture was the only
                .convenient one for the landowner's.  'dairy operation. The
                  owner had recently'improved the pasture by installing a live-
                  stock watering facility.

                       On.a Logan County farm, a sample point classified as-
                  having medium conversion potential was located in a 12-acre
                  pasture at one end of a.46'-*acre field. The owner thought
                  that 4 of the 12 acres could be converted to crops. How-,
                  ever, when considering the entire 12-acre area., he believed
                  pasture would provide a better overall economic return even
                  with depressed,cattle prices.

                       Although cropping is generally a more   intensive land
                  use than other agricultural uses, the importance and.produc-
                  tive value of noncropland'uses need to be consideredin
                  potential cropland estimates.

                       In.a July 19, 1977, letter., we reported to the Adminis-
                  trato.r of SCS on similar visits we had.made.to 44 sample.
                  points in 5 Minnesota counties. These.points were among those
                  used in the 1975 SCS study of potential cropland. Two
                  of the points had been converted to cropland. Of the other

                                                59

                  42 points, which represented about 1.8 million acres, most
                  were being used for.other agricultural purposes, such as
                  raising cattle and turkeys. SCS's report on its 1975'study
                  mentioned that there would be tradeoffs between grain pro-
                  duction and meat or lumber production, but did not quantify
                  the possible impact of.such tradeoffs.

                  Economic and'other considerations can.also
                  affect availability of potential cro@@_land

                        We asked the.60 owner/operators of.the 93 North      Dakota
                  sample points about the feasibility of converting those areas
                  to cropland and about the conversion effects and development
                  investments that conversion would require. 'We also asked
                 -whether commodity price increases would affect their conver-
                  sion.decisions. The farms averaged 1,735 acres and,the
                  owners median receipts.from farming were $30,000.

                        Owners of 10 sample point areas were considering
                  converting the land to cropland uses. The principal reasons
                  given were

                        --higher  economic.returns from crops,

                        --need to create more desirable field    sizes, and

                        --less need for pasture.

                        Owners of  the other,83 sample points said it.would not
                  be feasible to   convert the land at present crop prices.
                  They cited the   following more specific reasons.

                        --Cost to  convert was too high.

                        --Area, was committed to livestock operations.

                        --Area was  too small or odd sized.

                        -7Flooding  problems or excessive wetness existed.

                        --Soil was  unsuitable forcropping    (alkalinity, gravel,
                           very low fertility, stoniness, etc.).,

                        --Area was  committed to wildlife.

                        --Current  crop prices  weretoo low.

                  These reasons   indicate that  high conversion or development
                  costs relative to anticipated economic return, and specific
                  soil and water   limitations which would   require conservation
                  or.devel.opment  investments,.would be major   impediments to

                                                  60

                       'conversion. (SCS's 1977 report on-its 1975 potential crop-
                         land study pointed out that more than two-thirds of the
                         projected high and medium potential cropland identified in
                         that study would require conservation or development in-
                         vestments before it could be used as cropland.)

                                  Owners of 54         of the 83 sample point areas that were                            not
                         being considered for conversion said that they would not                                        con-
                         sider.conversion            regardless of higher commodity*prices.                              Typi-
                         cally, either these sample point areas were committed to                                        pas-
                         ture use or the owners did not think the areas were practical
                         to fa    rm because of conversion obstacles or other perceived
                         limitations. Owners of 24sample points said that higher
                         grain prices could induce them to convert one or more of.their
                         sample point areas if commodity price's--particularly of wheat,
                         the principal regional crop--were substantially higher.And if
                         the higher prices continued for an extended period--2 or more
                         years. The owners of the remaining five sample point areas
                         indicated that their conversion decisions would depend on
                         future price relationships between.crops and livestock.

                                  The owner's views            are depicted in the following graph.

                                      Acres of
                                      potential
                                      cropland
                                  800,000.
                                                                       739,840--Total projected acres of potential
                                  700,000.                             (100%) cropland represented by 93 sample
                                                                               points.

                                  600,000.

                                  500,000.                             422,400--No. of acres owners would not convert
                                                                       (57%)   regardless of crop price levels

                                  400,000

                                  300,000                               43,520--No. of acres owners might convert
                                                                        (6*/.)  depending on f uture price relationship
                                                                                between crops and livestock

                                  200,000

                                                                       197,120--No. of acresowners would consider
                                                                       (27%)   converting at higher crop price levels
                                  100,000.

                                                            ...........
                                                                        76,800--No. of acres owners were considering
                                        0
                                                                        (10%)   converting at current crop price levels

                                                                         61

                  Although the owners' views may change, demographic and.other
                  data obtained from the,respondents indicated that, in the
                  aggregate and for the foreseeable future, their views are
                  fairly firm,

                  USDA SEES'VALUE IN'FURTHER ANALYSES
                  OF POTENTIAL CROPLAND ESTIMATES

                       In responding  to our July 1977 letter, the SCS Adminis-
                  trator said that incorporating economic and other owner
                  views'and considering the overall agricultural impact of
                  conversion would be of value to USDA. He said that SCS had
                  referred the issue to the.Economics, Statistics,'and Coopera-
                  tives Service (ESCS) because SCS lacked the authority to
                  survey farm operators. ESCS subsequently planned to make a
                  survey but 'its efforts were suspended because resources for
                  this purpose were not available.

                       A recent USDA report l/ which analyzed.SCS's   report on
                  its 1975 potential cropland study concluded that,    because
                  the future demand for U.S. crops is uncertain, research is
                  needed to assess those circumstances under which potential
                  cropland might be developed as well as the consequences
                  of that development. The,matters said to need further re-
                  search were

                       --the cost, both public and.private, of converting,
                         noncropland to cropland;

                       --the responsiveness of landowners affected by owner-
                         ship problems (such as small tracts, isolated tracts,
                         small ownership units, and owner commitment to non-
                         cropland uses) to the price mechanism; that is,
                         shifts in cost-price relationships; and

                       --the availability of  the potential.cropland at various
                         stages in the price  cycle.

                  On the last item, the report noted that SCS was making an
                  additional analysis of its 1975 potential cropland study
                  based on 1976 price-cost relationships-. The data on
                  potential cropland in the 1975 study reflected 1974 agri-
                  cultural product/price relationships, which-the report
                  noted were one of the most favorable in recent times.

                  Y"A Perspective   on Cropland Availability," USDA-ESCS, Agri-
                    cultural Economic Report No. 406, July 1978..

                                                62

                 DISCRtPANCIES BETWEEN'OWNERS' VIEWS
                 AND SCS CLASSIFICATIONS

                      our interviews with the North Dakota   landowners sur-
                 faced some disagreements with.SCS land'classifications:

                     .--Some sample  points classified as having potential
                         for conversion to cropland were already in crop
                         production, according to the owners.

                      --Some sample points classified as having no devel-
                         opment,or production-limitations had such limita-
                         tions in.,their owners' views.

                      To get a good reading on potential cropland, exist-
                     cropland obviously should be excluded. However, the
                 distinction between cropland and noncropland usage is some-
                 times judgmental. For example, hAyland is sometimes pastured
                 and pastureland may be cut for hay occasionally. SCS de-.
                 fines the former as a cropland use and the latter as a non-
                 cropland.use. Owners of.11 of the 93 potential cropland
                 points felt the land already was in cropland, while SCS.
                 had classified the use as pasture or rangeland.

                      Also, SCS had classified 42 of the   93 sample  points
                 as not having any development problems. However,    in 26
                 cases, the owners described development   problems--most
                 involving rocks or stones-"which they felt would hinder
                 conversion. SCS officials said that stoniness was normal
                 to the area and they did not consider it to be a significant
                 deterrent to tillage.

                 CONCLUSIONS

                      Periodic estimates of the amount of noncropland having
                 the physical or latent capability of being converted to crop-
                 land are needed to help define the priority that should be
                 accorded to preserving prime and other farmland. Such.esti-
                 mates need to be further analyzed, however,   because various
                 factors can limit the amount of such land that can realisti-
                 ,cally be expected to be cropped. Such analyses should in-
                 clude determinations of the (1) price levels and rel-ation-
                 ships required to induce a significant expansion of cropland,
                 .(2) owners' views of the lands' conversion obstacles and
                 perceived limitations, and (3) extent to 'Which conversion
                 would affect other agricultural uses and existing farming
                 operations. These analyses will require gathering informa-
                 tion from a suitable national sample of landowners.

                                               63

                   .RECOMMENDATION TO THE SECRETARY
                   OF AGRICULTURE

                        We recommend that the Secretary    of Agriculture direct
                   ESCS to analyze the Department's-potential cropland-esti-
                   mates in terms of how much land is likely to be conve-rted
                   considering current land use, producl-il-)n tra(leoffs, (level-
                   opment problems arid costs, and other economic values, such
                   as changes inthe relationship of production and develop-
                   ment costs to commodity.prices. Such analyses should be
                   coordinated with SCS's studies of 'potential cropland and
                   included as part of, or as a supplement to, SCS's report
                   on the subject. Tile results would be helpful to the Con-'
                   gress in establishing the national land preservation goals
                  .recommended in chapter 6.

                   USDA'COMMENTS

                        USDA agreed with our   recommendation. (See-app, I.)      It,
                   said that it shared our view that there is a neecl for further,
                   more detailed analysis of the land potentially available
                   for crop production. It said that it felt that ESCS needs,
                   to provide more detailed studies which include the vagaries
                   of economic conditions and owners'    preferences.

                                                  64

                                           CHAPTER 8

                                        SCOPE OF  REVIEW

                     To identify and evaluate the issues pertaining    to the
                loss of prime and other farmland to nonagricultural    pur-
                poses, we reviewed relevant government and academic    studies-
                on the issue and obtained opinions from knowledgeable
                authorities. We also reviewed environmental assessment
                documents, policies, and/or procedures (relating to.farm-.
                land) of USDA, HUD, EPA, DOT, the Corps of Engineers, and
                CEO.

                     We  also contacted various State and local governments
                to obtain information on the methods being used to retain
                farmland, and reviewed various academic studies and other*
                literature concerning the effectiveness of these    methods.
                In some instances, we analyzed the effectiveness   of the
                preservation methods and,evaluated the impact.of    Federal
                actions on the conversion of farmland to nonagricultural
                uses. Our fieldwork was done in California, Hawaii,
                Illinois, Minnesota, New Jersey, New York, North Dakota,
                Oklahoma, Pennsylvania, and Vermont. We asked officials
                of all 50 States for their views on the seriousness of
                farmland losses and the role the Federal Government should
                have in preserving farmland.

                      Dr. W'illard W. Cochrane of the Department of Agricultural
                and Applied Economics, University of Minnesota, was engaged'
                ,as a consultant to help in our work.

                                               65

                       APPENDIX I                                                          APPENDIX I

                                                     DEPARTMENT OF AGRICULTURE
                                                         OFFICE OF THE SECRETARY
                                                          WASHINGTON, 0. C. 20250

                                                                                       Jun 'i  1979

                              Mr. Henry Eschwege
                              Director, Community and Economic
                                Development Division
                              U. S.,General Accounting Office
                              Washington, D. C. 20S48

                              Dear 141r. Eschwege:

                              This is in.response to your April 10, 1979, request for comments on your
                              proposed report to the Congress entitled "The Taking of Prime Farmland--
                              What Should Be Done About It?"

                              General Comments

                              Welindthis an excellent report that clearly identifies   the need for
                              actions by all levels of government.

                              Except as otherwise noted in these comments, we agree with your recommen-
                              dations to.the Secretary of Agriculture. We are joining with the Council
                              on Environmental Quality in the leadership of a.study on the retention
                              and conversion of agricultural lands which would include the recommendations
                              contained on page 52 of your draft report.

                              There are three general areas which we feel need to be modified. The first
                              relates to the several positive statements that agricultural productivity
                              has leveled off since the early seventies. In our view, it is not clear
                              that this is the case. We feel that the heading on page 15, "Productivity
                              yields have leveled off", overstates the case based on the evID-ence at
                              hand, and ask that it be deleted.

                              The second area deals with the need for further analysis of land potentially
                              available for crop production. We share the view expressed in your draft
                              report that there is a need for.further, more detailed analysis of the land
                              potentially available for crop production. We do not feel, however, that
                              the section of your draft report entitled "Discrepancies Between Owner's
                              Views and SCS Classifications" is appropriate. The USDA study of levels of..
                              potential for conversion to cropland,use was based on the soil's potential
                              for conversion under 1974 economic conditions. It was not intended or
                              desig@ ned to be used in the way that was reported in your draft report. The
                              views of owners or varying economic conditions were purposefully not
                              included in the USDA study because of the statistical sampling nature of
                              the study., We do feel the Economics, Statistics, and CoIoperatives Service
                              (ESCS) needs to provide nore detailed studies which include the vagaries of
                              economic conditions.and owners' preferences.

                                                                66

                    APPENDIX I                                                           APPENDIX I

                        The third area of concer n deals with the comments of the Farmers Home
                        Administration's (FdiA) representative. Since that interview, steps have
                        been taken by FmHA to.bring operation of its programs into compliance with
                        USDA's statement on land use policy-The Department of Agriculture, in its
                        revised statement on land use, (Secretary's Memo 1827, Revised, October 30, 1978),
                        directed all of its agencies to modify their programs to conform with that
                        policy. The policy provides for all of USDA's actions to be evaluated as to
                        their potential adverse impact on important farmlands and to avoid or
                        minimize those impacts where possible.

                        Sincerely,
                  1,V   DAVID G, U,,Go
                                       1-y
                                    @,eZ,@urch, Lducatiort.

                                                            67

                     APPENDIX 1I                                                        APPENDIX II

                                             OFFICE OF THE SECRETARY OF TRANSPORTATION

                                                             WASHINGTON, D.C. 20590

                          ASSISTANT SECRETARY
                          FOR ADMINISTRATION

                                                                       May Z2. 1979

                                .Mr. Henry Eschwege
                                 Director, Community and Economic
                                   Development Division
                                 United States General Accounting Office
                                 Washington, D.C. 20548

                                 Dear Mr. Eschwege:
                                 This is in response to your lette@  dated April 10., 1979, requesting
                                 our comments on Chapter 5 of the General Accounting Office (GAO)
                                 draft report, "The Taking of Prime Farmland--What Should Be Done
                                 About It?"

                                 Since highways  are critical to the continued vitality'of our rural
                                 economy, the loss of prime.farmland to build highway projects on new
                                 location is often an unfortunate but necessary consequence. We
                                 believe that'most  of these losses have been acceptable when weighed
                                 against the economic and social benefits which such highways bring
                                 rural America. In the future, we are hopeful that the rontinued shift
                                 of national emphasis from the construction of new highway facilities
                                 to the upgrading of existing facilities will significantly lessen the
                                 conversion of prime farmland for transportation projects.

                                 This is not to say ' however, that we should not increase our efforts
                                 to identify and evaluate the adverse  impacts of federal construction
                                 projects on prime farmland and to determine ways to minimize this
                                 effect. We believe that much can be done in the area of land use
                                 controls, with the cooperation of local governments, to protect prime
                                 farmland and to direct development and growth into other more suitable
                                 areas. Controlling access is one important transportation technique
                                 which can be used to supplement these efforts.

                                 We therefore support the recommendations on pages 52 and 53. We
                                 recommend however, that DOT be included as a lead agency in the
                                 Ileffort to develop criteria to guide Federal departments and agencies
                                 in determining and evaluating the impact of their proposed projects
                                 and actions that adversely affect prime farmland." We believe this

                        It's a la%v we
                        can live with.

                                                              68

                   .APPENDIX II                                                  APPENDIX II

                        i sjustified since: (1) highways are a major consumer of land; (2)-
                        highways cause major land use changes; and (3) DOT has the expertise
                        and interest to assist in such an endeavor.

                        If we can further assist.you, please let us know.

                                                    Sincerely,
                                              0
                                                      w rd W. Scott, r.
                                                      w 'rd VW. @S. r.

                                                        69

                 APPENDIX III                                      APPENDIX.Iii

                                              Copy

                                                                 June 12, 1979

                 Mr. Henry Eschwege
                 Director, Community and Economic
                   Development Division
                 General Accounting Office
                 Washington, D.C.    20548

                 Dear Mr. Eschwege:

                 This is in response  to your April 10 request for  our comments
                 on Chapter 5 of the  GAO draft report to Congress   entitled
                 ",The Taking of Prime Farmland--What Should Be Done About It?."

                 We have reviewed the report, particularly pag,es  42-44 which
                 deal with a number of actions by HUD's Federal Housing
                 Administration in the development of land, especially for
                 low and moderate income housing. The report correctly
                 states (page 43) that HUD often does not have a choice in
                 selecting alternative sites and must either accept or reject
                 a developer's proposal. When such projects are located
                 where development is imminent, HUD's disapproval of a
                 project for mortgage insurance may not always prevent the
                 conversion of prime farmland, as other financing is usually
                 available. Under the Section 203(b) mortgage insurance
                 program, Federal involvement by HUD occurs only when a
                 developer chooses to submit An application for subdivision
                 analysis. This may be done early, but more frequently the
                 developer comes to HUD after construction has begun. our
                 ability to influence development of farmland directly
                 through housing approval actions is, therefore, limited.

                 The major problem for Housing in dealing with prime and.,
                 uni.que farmlands is conflicting guidance with respect to
                 what constitutes prime and unique farmlands. The second
                 problem is the lack of established.policy as to how to
                 treat such farmlands when and if they are identified.

                 As you know  HUD has no authority to control land usage at
                 the local level. However, we have-provided financial
                 assistance to many States and municipalities through@our
                 701 program for the development of.comprehen,sive plans and
                 management processes to anticipate the impacts of develop-
                 ment on natural resources, including prime farmland, before

                                               70

                APPENDIX III                                      APPENDIX III

                                              Copy-

               ,specific development decisions are made.     The A-95 'process
                also affords opportunity forreview of-act.ions-which would
                consume farmland. The urban impact analysis criteria which
                we hope will soon be added to A-95 will extend the capacity
                of A-95 to address the issues of-sprawl    and farmland con-
                sumption.

                We 'have developed- and advocate the concept of "Areawide
                Environmental Impact Statements."    It will help anticipate
                and assess the cumulative impact of urban development in a
                specific geographic area rather than on a project-by-project
                basis. As relevant, it links the environmental reviews to
                local comprehensive plans.

                Unfortunately, effective tools   except for costly fee simple
                purchase, are seldom at the-disposal of those who-seek to
                preserve prime farmlands or other open space. Many States
                have enacted preferential.farm,assessment regulations and
                some have the authorit y to purchase development rights      In
                a similar.vein, many cities have policies of withholding the
                construction of urban infrastructure in,order to avoid.frag-
                mented development. Properly coordinated with a comprehen-
                sive plan, these efforts have beneficial effects in shaping
                areas to be urbanized. Standing alone zoning will "rarely
                be effective. It is only when a combination of all avail-
                able land use and development strategies are marshalled in
                support of a -comprehensive-plan with strong public backing
                that the various goals of a community are attainable. We
                believe a coordinated State and local approach is-necessaryl
                and consistent with the President's urban policy..

                Prime farmland is often also   the most desirable land for
                housing development and the economic and political pressures
                in favor of development are very strong. Criteria to guide
                agency assessments therefore should be clear,,specific, and
                firmly based on the national@urban policy. Such criteria
                should be developed in consultation with other Federal
                agencies.

                Sincerely,

                (signed)"
                Robert C. Embry, Jr.
                Assistant Secretary

                                               71

                      APPENDIX IV                                                            APPENDIX IV

                                                    DEPARTMENT OF THE ARMY
                                                     OFFICE OF THE CHIEF OF ENGINEERS
                                                         WASHINGTON, D.C. 20314

                                     REPLY TO
                                     ATTENTION OF:                                    4 M.Ay I'J i'@

                              DAEN-CW-R-P

                              Mr. Henry Eschwege
                              Director
                              Community and Economic
                                Development Division
                              U. S. General Accounting Office
                              Washington, D. C. 20548

                              Dear Mr. Eschwege:

                              This is in reply to your letter of 10 April 1979 to the Chief of
                              Engineers, regarding Chapter 5 of your draft report on "The Taking of
                              Prime Farmland--What Should be Done About It?"

                              The statements in your report attributed to U. S. Army Corps of Engineer
                              field personnel are probably correct. However, I would like to point
                              out that the taking of prime farmland for water resource projects has
                              received more consideration than indicated in the report.

                              At the request of the President the Corps of Engineers, interior
                              Department and Tennessee Valley Authority, with assistance from the
                              Office of Management and Budget and the Council On Environment Quality,
                              conducted a major review of ongoing water resources projects in early
                              1977. One of the environmental criteria considered in the review was
                              the taking of prime farmland.

                              This subject was a factor in the President's recommendation to deauthorize
                              two Corps projects. one of the five factors of decision, listed by the
                              President in recommending deletion of the Grove Lake, Kansas project was,
                              "The project would take 10,000 acres of prime farmland." Of three factors
                              listed for deauthorizing the Meramec Park Lake, Missouri project, one was,
                              "Lake will inundate 12,600 acres, about half of which is prime farmland,
                              to fully protect only 11,900 downstream acres of land."

                              We appreciate the opportunity to review your draft report.

                                                                      Sincerely,

                                                                      MAXIMILIAN IMHOFF
                                                                      Colonel, Corps of Engineers
                                                                      Executive Director of civil Works
                                                                      Si @ere Y'
                                                                             1

                                                                      M
                                                                         IM LIAN @INHOFF

                        (021730)                                  72     *U.S. GOVERNMENT PRINTING OFFICE: 1979 620-167/310 1-3

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