FARMLAND is a lot like oil. It is a finite natural resource. It takes eons to form. It costs more the scarcer it gets, and the United States was originally blessed with more of it than almost any other place on earth. And Americans waste an awful lot of it.

In the course of an average year in the late 1970s, new airports, packing houses, golf courses, condominium complexes and industrial parks were consuming Illinois farmland at a rate of roughly 100,000 acres a year. Preserving it had never been much of an issue in Illinois; as was the case elsewhere in the U.S., there has always been plenty of food, and conversion of farmland to more "productive" uses was the goal of both public policy and private ambition.

That has changed — a little. It is still possible for farmland preservationists to be branded "obstructionists" by development interests from the city, as happened last fall when adjacent landowners tried to block rezoning of farmland near Rantoul in Champaign County as a site for a big new printing plant. But it happens less often. In the mid-1970s there occurred a minor revolution in U.S. agriculture. Huge grain sales abroad, an end to government set-aside programs at home and an ominous leveling off of productivity gains farmers had come to expect as automatic created what one government study carefully called "uncertainties about the capacity of the U.S. agricultural land base" to meet future demands on it.

Farmland conversion at the township or county level was piecemeal and easy to ignore, and it was not until its cumulative national effects were made known that stopping it became an issue. The first lesson in a continuing course on farmland preservation was given in 1975 by then-U.S. Secretary of Agriculture Earl Butz who cataloged the effects of a variety of federal policies on farmland in a seminal report titled, "Perspectives on Prime Lands."

Federal 'change of heart'

Since then the federal bureaucracy has worked fitfully to elaborate a preservationist policy. In 1976 the Council on Environmental Quality (CEQ) asked federal agencies to evaluate the impact of their programs on farmland. This modest initiative led to soul-searching at both the U.S. Environmental Protection Agency (USEPA) and the U.S. Department of Agriculture (USDA) which, with the U.S. Department of Transportation, were the principal architects of the post-World War II transformation of the U.S. countryside. In a new land-use policy announced in the fall of 1978, for example, USEPA admitted that decisions about where to build sewers and other urban amenities "do not adequately recognize that agricultural lands are a finite productive. . .resource which is cumulatively and irretrievably diminished as a result of federal actions" and promised to do better.

Similar reevaluations were undertaken in 1978 at USDA which culminated in then-Secretary Bob Bergland's Memorandum No. 1827. As USEPA had done, Bergland required that his department's agencies judge projects not merely by their impact on farmers (the past, informal standard) but by their impact on farmland as well, for example, by requiring that rural development projects respect "Important Farmlands" as designated by state or local governments.

One of the tasks Bergland set for his department in that memo was to amass data on land and land use for further study. It is a measure of the national indifference to the subject that no one then knew exactly how much farmland there was in the U.S., or how it was used. To answer these questions,

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Nowhere is this change of heart at the federal level more vividly apparent than at the Farmers Home Administration (FmHA). Until well into the '70s the FmHA (along with the USEPA's sewer systemizers and the U.S. Department of Transportation's road-pavers) was to farmland conversion what a match is to a fuse. Former Illinois FmHA director Jon Linfield once admitted that "good intentions, lack of foresight and a total absence of planning" in the spending of the agency's roughly $400 million annual state bugget of low-cost housing and rural development loans and grants had added its share to Illinois' 100,000-acre annual toll.

In 1979, however, Illinois FmHA announced a new resource management policy which, stated at its simplest, pledged the agency to make no loans, loan guarantees or grants which would result in the loss of prime farmland. The policy was later expanded to include certain wetlands, forest and natural areas.

The Illinois FmHA was ahead of many state FmHAs in this regard. It was ahead of Congress too; last fall Congress required FmHAs to add a punitive 2 percent interest rate on loans made for certain community facilities and nonfarm projects built on prime farmland. State FmHA officials note that they were trying to find alternative sites for such developments anyway, and that by exempting rural housing from its list of proscribed projects (presumably for political reasons), Congress failed to stem one of the most land-consuming forms of development.

Other federal agencies in Illinois have followed FmHA's example; Housing and Urban Development, for example, now refers certain development applications to FmHA for comment. But farmland conversion remains a distant controversy at many agencies. To cite just one example: A section of the federal transportation act passed in the 1960s prohibits federally funded highways from being built on parkland or on archeological sites. This restriction in effect requires that such roads be built on adjacent farmland, and Illinois agriculture officials want to see prime farmland given the same legal protection as parks.

It was in the hope of reforming such bad habits that Bergland's successor John Block — who had been a vocal advocate of preservation during his tenure as director of the Illinois Department of Agriculture (IDA) from 1977 to 1981 — asked President Reagan to issue an executive order requiring all federal agencies to undertake the same sort of land-use policy review required of USDA and USEPA. A similar requirement has been written into the 1981 farm bill by Congress, although that action has not vented pressure for an executive order. Illinois ag officials acknowledge that such an order is "on the back burner" at the White House, but, as one IDA staffer has put it, "What Congress can mandate, the bureaucracy can thwart. What the President mandates gets done."

In 1979 Illinois FmHA's new resource management policy pledged the agency to make no loans, loan guarantees or grants which would result in the loss of prime farmland

Such an order couldn't come too soon in the opinion of several of Illinois' private environmental and citizen organizations. In December the Illinois South Project, the coal industry watch-dog group, filed suit against Interior Secretary James G. Watt in a dispute over his implementation of those provisions of the 1977 federal strip mine act governing the mining and reclamation of prime farmlands. Illinois South Project was joined in the suit by seven other state and national groups, including the Illinois Wildlife Federation, the Illinois League of Women Voters and the Illinois Farmers Union. The Carter administration had set an August 2, 1982, deadline for an end to exemptions granted to existing mining operations under the "grandfather" provisions of the act. Watt has removed that deadline, which Illinois South has said "will have a devastating impact on the Midwest's prime farmland." It remains unclear, in other words, whether John Block or James Watt speaks for the Reagan administration on the farmland preservation issue.

Federally regulated activities such as strip mining so far affect only a tiny fraction of farmland. It is necessary to note, however, that even if every federal agency were henceforth to tiptoe through the countryside, being careful not to step on any but the most marginal land, the effect on conversion rates, though significant, would be far from decisive. In 1980, according to Linfield, the then-director of the Illinois FmHA, the programs of all federal agencies combined accounted for only about 10 percent of rural construction in the state.

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Illinois' preservation efforts

Given this fact, plus the historical resistance to even the concept of federal land-use controls, experts generally agree that farmland preservation is a problem which will have to be solved at the state and local level. Most of the various regulatory and financial schemes to stem conversion have originated in state capitals and county boardrooms, including those in Illinois. Like many farm states, Illinois only recently came to officially appreciate the economic implications of the disappearance of its farmland. In the late 1970s, the arithmetic of conversion became dear to farm groups, farm county legislators and (through the advocacy of new IDA director Block) the executive branch of state government. Once begun, events moved quickly. In late 1978 a Rural Revitalization Planning Program (funded by FmHA) called attention to the need to preserve what was coming to be called the farmland resource, and the IDA and the Illinois Institute of Natural Resources (now the Department of Energy and Natural Resources) began drafting a state preservation policy. Meanwhile Block reorganized the IDA to include a new Division of Natural Resources, to which responsibility for preservation programs eventually would be moved. In January 1980, Gov. James. R. Thompson in his State of the State speech called for "more rational planing" to protect the "precious heritage" of Illinois farmland, and in July 1980, the first statewide conference on farmland preservation was held.

This conference revealed the breadth of the emerging official consensus on the issue; its cosponsors included the Illinois Agricultural Association (the umbrella group which includes the powerful Illinois Farm Bureau), the IDA, IINR, Department of Commerce and Community Affairs, USDA, Illinos FmHA, and the Illinois Land Resources Management Study Commission.

The 1980 conference was more notable, however, as the occasion of the announcement of Gov. Thompson's Executive Order No. 4 (1980). This document may become the Magna Carta of the Illinois farmland preservation movement. In it, Thompson stated, "It shall be the policy of the State of Illinois to protect. . .the State's prime agricultural land from irreversible conversion. ..." Noting that farmland conversion "reduces future food production capability and may ultimately undermine agriculture as a major economic activity in Illinois," and noting further that the state lacked a single coordinating body to insure that the state's own agencies do not abet conversion, Thompson did three things. He named the IDA as the state's official preservation agency. He required that the nine state "development" agencies complete preservation policy statements by July 1982, including measures each agency will take to "mitigate conversion to the maximum extent practicable." These agencies include the Capital Development Board, Illinois Environmental Protection Agency, Illinois Institute of Natural Resources, Bureau of the Budget, Illinois Commerce Commission and four code departments — Conservation (DOC), Mines and Minerals (DMM), Transportation (IDOT) and Commerce and Community Affairs (DCCA).

And his order set up the administrative machinery to carry the program forward via a new interagency committee composed of these same agencies.

The IDA was authorized to review state capital projects by means of a new "agricultural impact statement" which would be required of sponsoring agencies. And although not required by the order, a Farmland Preservation Advisory Committee was created by the IDA in April 1981 as a "private sector counterpart" to the interagency committee, according to the IDA. The new group's membership includes municipal officials, bankers, planners, developers, state lawmakers, environmentalists and others; as the IDA phrased it in a recent paper, "prudence and propriety dictated" that these influential groups be "kept abreast" of the department's work.

Jim Frank is the superintendent of the IDA's Division of Natural Resources, which has the principal responsibility for carrying out IDA's preservation mandate. Frank calls Executive Order No. 4 "the cornerstone of the state farm preservation policy." The order made routine the kind of isolated reforms which a few state agencies had adopted independently. IDOT, for example, had already revised its highway design criteria so as to take less rural land, by reducing the number and size of interchanges and by expanding existing roads in existing corridors (as is planned along U.S. 51) rather than building new roads in new corridors nearby.

Enrolling the private sector

The governor's order affected only the public sector, however, and only one part of the public sector at that. The fight against farmland conversion by the private sector was taken up in the General Assembly. The legislature in 1979 passed the Agricultural Areas Conservation and Protection Act (P.A. 81-1173) which, along with local zoning laws, is preservationists' principal weapon. The "ag areas" act was passed with prodding by the Illinois Farm Bureau and is similar to laws in a half-dozen other states. It authorizes a farmer or farmers to voluntarily form an agricultural area (minimum size: 500 acres). If approved by the county board, such areas may stand for 10 years and are renewable every eight years. A farmer may withdraw his land from the area at any time without penalty. Although it is not protected against eminent domain, land in such an area may not be assessed for any special local taxes nor be subject to any "nuisance laws" intended to restrict farm operations. To date, eight ag areas have been formed in Illinois, which together comprise roughly 25,000 acres in six counties.

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The act has been criticized as weak since participation is voluntary. Although voluntary, as a concession to the enormous resistance to regulation among farmers, the act is defended by the spokesman for the Illinois Farm Bureau. The bureau's director of government affairs has said that the McHenry County's minimum lot requirement has gone from one-half acre to one-and-one-half acres, then to five acres, and most recently to an extraordinary 160 acres bureau "does not agree that the act does not have teeth in it."

Jim Frank, however, prefers that some financial incentive be given to farmers to encourage their participation, although he concedes that such incentives are unlikely to be authorized in the current economic climate. At the same time, Frank favors financial penalties for withdrawal of land from an area. "Also, perhaps we ought to require erosion control plans on lands to be entered in ag areas," Frank says. "It doesn't make sense to give land special protections intended to keep up agricultural productivity if that land is losing soil at three or four times its tolerance limit."

Abandoned farmsteads are becoming more common as the economics of agriculture become more tenuous. Offered large cash returns by developers, many farmers are opting for early retirement or new careers. Photo by Roger McCredie

But even if penalties for withdrawal were established in Illinois, there is no guarantee that ag areas legislation is the cure for conversion. If such penalties are made too severe, landowners near developing areas will avoid joining ag areas in the first place; if they are more modest, the potential profit from development will render the penalty painless, and thus ineffectual. The state with the oldest ag areas act is New York. Enacted in 1971, it offers greater protection than Illinois' act, but the NALS concluded New York's act has proven "relatively ineffective in reducing the rate of conversion."

States have other options open to them besides ag areas. But they tend to be ineffective, too costly or (in the case of those which interfere with the "rights" of landowners or local governments) politically unacceptable. One such option is differential tax assessment for farmland. Illinois has used such a system since 1972. At the request of its owner, farmland may be assessed according to a formula which establishes its worth as farmland separate from its market value. The original aim of the program was to reduce farmland conversion in the Chicago suburbs by reducing farmers' property tax loads, although it has subsequently been expanded into a program of general tax relief for farmers.

But the effect of differential tax assessment on farmland conversion has been minor, in Illinois as elsewhere. Some states make such tax breaks conditional upon the owner's pledge to keep land in farms; if an owner converts it to a nonfarm use, he must pay back all or part of the taxes thus saved, and sometimes an additional penalty as well. Such "rollbacks" seldom match the profits to be made from development, however, and thus are flimsy barriers to conversion.

Another approach is the purchase by the state of development rights to farmland. Under such a program (pioneered by New York's Suffolk County on Long Island in the mid-1970s) the state would pay a farmer the difference between the value of his land as farm-land and its developed value, thus re-moving the financial incentive to convert it to nonfarm uses. Ownership of the land itself remains in the hands of the farmer, along with the responsibility for maintenance and the payment of local taxes. Unfortunately, the purchase of development rights is expensive, especially in a state the size of Illinois. Suffolk County has committed itself to the purchase of development rights on 15,000 acres at a total cost of $90 million; at that price, the cost of protecting just half the Illinois farm-land converted each year would run to $300 million annually.

McHenry County's answer

Of course, the state can affect preservation practices as much by what it allows as by what it does. Under the state Constitution, local units of government are invested with the authority for planning and zoning. Zoning is by far the most common farmland preservation tool, both in Illinois and the nation. (Of 395 preservation programs in use by state, county and muncipal governments, the NALS found that 270, or 69 percent, were zoning programs by counties and municipalities.)

The possibilities of zoning for agriculture have been demonstrated in McHenry County, "the frontier of the farmland preservation issue" in Illinois, according to one farm bureau of-ficial. Perched precariously on Chicago's raveling urban fringe, McHenry was Illinois' second fastest-growing county between 1970 and 1980, increasing in population by nearly a third to 147,724. It is 70 percent rural. In the mid-1970s, local farm groups began to worry that farmland was being eroded by urban outwash from the city, and farmers had no interest in joining their neighbors in nearby DuPage County on the list of endangered species.

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The McHenry County land-use plan encouraged the development of existing vacant land within municipalities as an alternative to building on farm-land around municipalities. As a protection against nuisance suits, it asserted the right of farmers to use land zoned for agriculture for agriculture. It allowed residential construction in agricultural zones, but only on those parts of such zones officially deemed unsuitable for agricultural use. The county board also set minimum lot sizes for residential development in such zones. This is common practice nationally; rather than try to make subdivisions illegal, planners sought to make them unprofitable. But wherever they have been tried, minimum lot sizes of as large as five acres have proved insufficiently bulky to stem housing construction in the countryside, and in fact actually have made rural sprawl even sprawlier in many areas. McHenry County has gradually boosted its own minimum lot requirement, from one-half acre to one-and-one-half acres, then to five acres, and most recently to an extraordinary 160 acres.

McHenry County also has approved one ag area under the state's ag areas act and is reviewing four more. As McHenry County planner Steve Aradas explains, "Ag districts and ag zoning reinforce each other, because zoning makes it harder to get land in ag districts changed to non-ag uses."

This county's ag preservation program thus is both aggressive and comprehensive and is rooted in a broader land-use program. As a result, officials note with some pride that the latest revised county development plan calls for McHenry County in the year 2000 to still be 70 percent rural but at the same time allows for the construction of housing for 100,000 new people and sets aside 5,600 acres for commercial development.

Land-use planning

Unfortunately, county zoning remains a relative rarity in Illinois, since only about half the state's 102 counties have adopted some form of zoning regulations. In spite of lobbying by the Illinois Farm Bureau in favor of such

regulations, much of the local opposition to county zoning continues to come from farmers. Rich Clemmons, the Illinois Farm Bureau's local government director, admitted in a November address that the state ag community "has not really met fully" the conflict between the protection of private property rights — including the right to sell farmland out of production — and the protection of farmland. This failure is not merely a philosophical problem. As Clemmons noted, zoning decisions are invariably political decisions. It is no accident that the Illinois counties which have the most restrictive ag zoning programs also have local farmers actively lobbying on their behalf.

Clyde Forrest, attorney and professor of urban and regional planning at the University of Illinois at Urbana, has described the body of Illinois' land-use law as being in "a somewhat backward state." Land-use laws, says Forrest, are based on "the assumption that the purpose of planning is to deal with urban growth, and not land as a resource." At present the law protects through restriction: appropriate local units of government may not enact zoning laws which prohibit agricultural uses. Forrest would prefer a clearer statement from the General Assembly that land-use controls could be used for the preservation of ag land in urban areas.

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Land-use planning and land-use control are largely separate issues under Illinois law. This separation of means from ends allows local units to regulate land use before they have decided why. Forrest notes that using agricultural zoning in the absence of a master plan, as many Illinois counties do, "makes it hard to argue that you know what you're doing from a public policy point of view," either to a landowner or, more likely, to a court.

It was in the hope of remedying what its sponsor called >the "archaic nature of land resources management techniques" in Illinois that the General Assembly in 1980 established an Illinois Land Resources Management Study Commission. Headed by Forrest, the commission examined the causes and cures of both farmland conversion and uban sprawl. Predictably, the commission learned that government itself often contributed to both problems. In addition, it lamented the profusion of zoning and planning bodies (especially in the crowded Chicago area) whose jurisdictions often overlap and which contribute to what the commission called "intergovernmental impotence" in land-use planning.

Acknowledging that parallel work already was underway at the IDA, the commission's final report did not address directly the problem of farmland conversion. But virtually every aspect of planning and zoning practice affects farmland ultimately. (Annexation law is a good example. McHenry County's Steve Aradas believes that the original zoning classification of a given parcel of land should be required to be removed before a municipality could annex it; since such a zoning change would require county or city approval, this requirement would give counties a weapon with which to defend their territory against encroachment by expanding cities.) In effect, the commission noted that local authorities find it hard to preserve farmland, even when they want to, because of complicated, archaic or contradictory laws. The commission endorsed a package of bills which would (among other things) coordinate decisionmaking among local units, expand the powers of such units over land use, make joint planning by adjacent units easier, standardize zoning procedures, and so on, but they are given little chance of passage.

New concept of agriculture

Behind the mechanical flaws in Illinois' land-use practices are conceptual ones. Before local officials can begin to act differently about farmland, they have to think differently about it. Says the IDA's Frank: "We haven't been successful at educating the legislature and the urban population generally about the importance of maintaining a viable agriculture. In the past, environmental impact statements have not looked at the economic value of agricultural production as a factor. But if you multiply the annual value of crops that could be raised on a parcel of farmland vis-a-vis the amortized value of a new plant over 40 years, that plant usually looks like a piker."

But even if the public sector were to reform, what about the private sector? The fact is that there is no such thing as a truly private sector when it comes to land. Although government may directly account for a modest share of development, it influences the real estate market profoundly, if indirectly, through its zoning, planning, taxation and public improvements policies. A recent U.S. General Accounting Office report of federal housing policies since 1935 confirmed what planners and land economists have been saying for years, namely that subsidized mortgages have, by making new housing cheaper to build, done for the suburban ranch house what Johnny Appleseed did for apple trees.

Policy reviews of the sort required by USDA may curb the federal government's expansion habits. But Washington did not intend to destroy millions of acres of farmland. It did so accidentally, by pushing policies which had as their aim the advancement of some other interest such as housing or trans-portation, and it seems likely that it will stop destroying farmland in the same way. Cutbacks in funding for capital projects are likely to do as much to slow extension of urban ser-vices to rural areas as any executive order, and Illinois experts attribute an apparent leveling off in the rate of farmland conversion since 1978 to high interest rates which have stymied new home construction. Says Aradas, "More agricultural land has been saved by high interest rates, OPEC and the pill than by anything we've done." It is important to remember that local officials have begun to advocate strate-gies for more compact development not because of the cost in lost farm-land, but the cost in new services such as sewer mains at $200,000 a mile. And Congress, faced with a seemingly un-balanceable budget, has even consid-ered a cap of $5,000 on federal income tax deductions for home mortgage in-terest payments, as well as the possible elimination of deductions for property tax payments. Either change would make new houses much more expen-sive, and presumably would result in fewer of them being built. After decades of doing the wrong thing for the right reasons, Washington may be beginning to do the right thing for the wrong reasons.

In the meantime, the state and its local subdivisions will remain in the role of firemen rushing to put out fires ignited by someone else. Since 1978 they have become marginally better equipped for the job, and conversion pressures at the moment are slight. To combat a conflagration of the scale which is likely to follow resumption of large-scale building, Illinois will need either to spend a lot more money pur-chasing development rights or allowing tax incentives, or it will need to adopt rigorous, even mandatory, land-use controls of the sort common in Europe. Neither seems likely, at least not until that not-too-distant morning when Illinoisans awake to find (as Jim Frank phrases it) that their farmland is "either under concrete or down at the delta. "□

James Krohe Jr. is a contributing editor to Illinois Issues and associate editor of Illinois Times in Springfield. He specializes in planning, land use and energy issues.

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