March 26, 2008 | County ranks 5th in Agricultural Easement Purchase Program

By Samantha Deem

While we take the time to look back at the history of some of the Century Farms located in Knox County, it is also important to look to the future of Knox County and the need to preserve our farmland for future generations.

As our world continues to evolve and cities sprawl out past their current boundaries, farmland is becoming more and more sought after as a way to fuel more urban development.

As a result, agricultural easements are becoming an increasingly popular way for current land owners to guarantee that their property will remain a productive farm operation regardless of who owns the property.

An agricultural easement is "a permanent, legally binding restriction that forever limits the use of land to predominately agricultural activity," according to the Ohio Department of Agriculture Office of Farmland Preservation.

In essence, this means that once an easement is placed on a piece of land, it can never be sectioned out or sold for development purposes. The land will exist solely as an agricultural commodity.

Doug Givens, managing director of the Philander Chase Corp., says that an ag easement purchase is very similar to holding the mineral rights on a piece of land.

"If you own a farm and someone wants to drill a well, you will lease them the mineral rights. You continue to own the land; they lease from you the right to drill the well," Givens said.

Since the Clean Ohio Agricultural Easement Purchase Program was implemented in 2001, five Knox County farms have completed all the steps in the program. Those farms include a total of 657 acres.

The White Oak Farms, accepted into the program in 2007, is classified as "pending" as all the paperwork has yet to be finalized. This farm will bring an addition 205 acres to the county's preserved farmland when the process is completed later this year.

"We also have two properties with donated easements. That includes 245 acres. All together, we have 1,107 acres in agricultural easements."

According to Givens, Knox County has 210,000 acres in farmland. Although only one-half of one percent of that is held in an agricultural easement, that figure is a huge success in the overall scheme of things.

"In Knox County, we have been very successful. We are 5th in ag easements in the state of Ohio. We've become one of the leaders in the state," said Givens. "We just need more money."

In 2001, AEPP was started with $25 million to be distributed at $6.25 million a year over four years. With matching funds from the U.S. government under the Farm and Ranch Land Protection Program, the AEPP has been extended through 2008.

"This is the last year for the program," Givens said. "The Department of Agriculture is trying to find more funding to extend the program."

According to the Ohio Department of Agriculture, 24 Knox County farms applied for AEPP in 2007. Only Preble County in southwest Ohio had more applications with 31 farms. Ashland County submitted 23 applications.

These numbers show the great lengths landowners will go in order to preserve their holdings from development.

Sponsored by the Philander Chase Corp., White Oak Farms, owned by Bill and Bonnie Lawhon, was the only Knox County farm to be accepted by AEPP last year. This parcel of land includes 204.43 acres. The easement is valued at $407,225.

The application process is quite tedious and involves 40 to 50 pages.

Applications are judged on two tiers. Tier I has a total of 100 points and includes items such as quality of the soil, road frontage, proximately to sewer and water systems and major intersections, and neighboring acres already in an easement program, among other things.

"Tier I is all objective," Givens said. "There is a significant methodology to the points acquired in this portion."

Tier II points are accumulated based on five essay questions worth 10 points each.

"The application process asks for a lot of stuff you already know. If you don't know the answer there are a lot of resources in the county to help you out," said Bill Lawhon, one of the owners of White Oak Farms. "Anyone that's truly interested can get the work done."

Lawhon relied on area groups like the Knox County Soil and Water Conservation District, the Knox County Commissioners and Philander Chase Corp. to help fill in the voids on his application.

For him, the importance of being in the preservation program are far reaching yet quite simple.

"I purchased a farm," Lawhon said. "I'd like to leave it as a farm. Everyone likes to talk about helping the poor people or school children, but no one cares two cents about green space. I'd like to leave a little bit of that."

In areas like Knox County, farmland preservation is crucial in holding on to our rural roots and protecting our heritage for future generations.

"There's a lot of pressure on Knox County to save our green space. We could be like Delaware County real quick," Lawhon said.

Part of the success of Knox County farms being accepted into the program is the dedication of the Knox County Commissions to help preserve our farmland.

"Knox County is one of the only counties where the commissioners have put in matching funds. A lot [of farms] would not have gotten in without their support," Givens said.

Lawhon agrees with Givens and welcomes their approach to saving the open spaces in the county.

"Knox County Commissioners have set a very high standard. A lot of counties still think developers and subdivisions are the way to go. We do have to have a certain amount of industry because we need jobs. But there are people who move here because of the agricultural element and the agricultural jobs."

Once accepted into the program, administrators use the difference between the county assigned market value of the land and the Current Agricultural Use Value (CAUV) to determine a value per acre. The program will then pay 75 percent of that value to purchase the easement. The remaining 25 percent must be met with a local match.

"The local match will come from the property owner, the commissioners and the Philander Chase Corp.," said Givens. "We will all sit together and negotiate how to divide that between the three of us."

The Philander Chase Corp. is funded by "interested alumni, parents and local residents who are interested in preserving the rural character of the county. You can't protect that character without preserving our farmland," Givens said.

Landowners are not permitted to apply for the AEPP on their own behalf, they must be sponsored by a non-profit group, like the Knox County Soil and Water District or Philander Chase Corp, or a governmental group like commissioners and township trustees.

"Government and non-profit agencies can hold or co-hold the easement with the State of Ohio," Givens said.

Part of the responsibility held by the easement sponsor is to make sure the terms of the easement are being followed.

"Part of the responsibility we accept as a local sponsor is to conduct the annual monitoring of the properties to confirm that the easement is being followed," Givens said.

There are benefits to ag easements which include keeping the land for agricultural purposes in private ownership paying into local taxes, it can be flexible based on the owner's needs, and it can provide various tax benefits including estate tax reductions which make it easier to transfer to other members of the family.

"It's amazing when you take the time to address the situation. What you think is too complicated really isn't. There are major financial benefits and tax deductions," said Lawhon.

For those that don't qualify for an ag easement purchase program but still want to protect their land, an easement donation program is available from the Ohio Department of Agriculture's Office of Farmland Preservation.

In addition, for landowners that want to preserve the natural integrity of their American dream, conservation easements are available that protect land from urban development. The Owl Creek Conservancy holds easements on over 100 acres.

These easements protect the land from being developed but don't necessarily guarantee the land will be used for agricultural purposes.

For more information about AEPP, contact Givens at (740) 427-5902.

Courtesy of Mount Vernon News. Reprinted from Cultivating Dreams 2008.