Farmer Pulver with Tractors

Farming is part of the fabric of Dutchess County and DLC is committed to helping local farmers remain on their land. Open agricultural fields, dairy barns and grazing cattle are integral to the character of the County and our quality of life. The value of our local farms is increasingly recognized and is reflected by the crowds at our local farmstands.

Unfortunately, with every passing year comes the loss of more of our valuable farmland to development or disuse, as farmers retire or cannot afford to continue their operations. Farmers provide immeasurable benefits to our local communities by providing fresh local products; contributing more to the local tax base than they use in services; providing scenic beauty and a sense of community; and stewarding the land for future generations.

Farmers are keenly aware of the sensitivity of the land and its importance to them as a business and to a healthy community. They are often the strongest advocates for keeping land open and in production, and for permanently protecting open space and farmland. However, farmers often do not have the financial resources to donate conservation easements and benefit from the tax incentives. Often farmers are land rich and cash poor – their greatest equity is in their land – the same land that is an integral part of their farm business. If they want to retire or infuse cash into their business, they often must sell all or part of their farm.

DLC works with farmers to explore ways to keep farming a viable business and give farmers alternatives to selling their farms. DLC can help a farmer by providing conservation land planning assistance or by helping to guide them through the process of selling their development rights. DLC has a strong track record for raising funds and closing purchase of development rights projects in Dutchess County.

DLC’s successful purchase of development rights (PDR) program includes collaborating with local partners such as the County Agricultural and Farmland Protection Board and Cornell Cooperative Extension. Funds for PDR projects typically come from the state, county, local municipalities and private sources. Through our PDR program, DLC has saved thousands of acres of farmland and provided farmers with funds to keep them on their land producing the local products that are vital to sustain our agricultural-based communities.

Farmland Purchase of Development Rights Program

A purchase of development rights program pays farmers for restricting the future use of their land. The property is typically restricted in a manner that protects the most important agricultural land (called “farm areas”) while allowing additional agricultural and farm related residential structures to be built in specific locations (called “farmstead complexes”). The farmer gives up his right to fully develop the land but retains all other rights of ownership including the right to farm the land, use it in most normal and customary fashions, sell it, or otherwise transfer the property.

Farmers can use the funds they receive from selling their development rights for whatever they choose, but most use them to enhance the farm operation, purchase additional agricultural land, or to transfer the land to the next generation allowing an older farmer to retire.

Selling your development rights is forever, but a farmer does not have to limit all future right to build or subdivide the land. When you sell your development rights, a conservation easement is placed on the land. The conservation easement is the legal document that spells out what can and cannot occur on the farm. This document gets recorded by the County Clerk and runs with the land. Future landowners will also have to abide by the terms of the easement as set forth by the farmer when the development rights are sold. Agricultural conservation easements are written with farmers in mind, allowing for agricultural activities and the structures to support a working farm. By reserving some development rights, the farmer is ensured a future source of revenue for the farm.

The value of the development rights is determined by a qualified appraiser. The appraiser values the property as if it was being sold today without a conservation easement, and then determines the value of the property limited by a conservation easement (as a farm). The difference between these two values is the value of the development rights and the amount to be paid to the landowner.

Landowners can agree to accept a lesser amount than the full value of the development rights in what is called a “bargain sale.” By agreeing to a bargain sale, landowners can potentially take advantage of federal and state tax benefits by essentially donating a portion of their development rights. For tax planning purposes, this is often a financially beneficial way to structure a PDR project.

If you are interested in learning more about farmland protection options or DLC’s purchase of development rights program, please contact us at (845) 677-3002.

This information does not constitute legal or tax advice and DLC strongly recommends that you discuss your land conservation options with legal and tax professionals.