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Can Oregon protect its best farmland from development?

From his cauliflower field, farmer Peter Kenagy has a view of apple trees, rolling hills and a looming farmland crisis.

"There," he said, gesturing toward a fence that runs along the field. "That is the Albany city limit. There is no more urban growth boundary. That's it."

Kenagy easily could have been talking about the dilemma that faces Oregon farms located just outside the urban growth boundaries of Portland, Eugene, Salem, Corvallis and other fast-growing Oregon cities.

"The biggest threat to agriculture today is not federal regulations, it is not onerous ballot measures, and it is not lawsuits," Oregon Gov. John Kitzhaber said during the Western Sustainable Agricultural Conference in March 2000. "The greatest threat is demographics."

With nearly 50,000 new residents a year moving into Oregon and creating demand for new housing, the pressure to build has prompted the nation's largest farmland conservation agency to declare a farmland crisis in Oregon.

Man walking in cauliflower field.

Willamette Valley farmer Peter Kenagy walks through a cauliflower field on his farm near Albany. The fence line on the left is the Albany city limit. According to OSU research, farms closest to urban centers are most vulnerable to annexation. Kenagy is concerned about this trend. Photo: Lynn Ketchum

In its report, "Farming on the Edge," the American Farmland Trust identified the Willamette Valley and the Puget Sound corridors as the fifth most-threatened on its top 20 list of endangered agricultural lands.

The American Farmland Trust seeks to protect endangered agricultural land in several ways. The agency's conservation strategy even includes buying the development rights to endangered farmland. The organization opened an office in Puyallup, Wash. last summer, and in January 2001 hired an Oregon field representative to educate the public and to conserve farmland on the edge of urban centers.

The Agri-Business Council of Oregon, a non-profit volunteer group dedicated to preserving the vitality of the state's agricultural industry, also is in crisis mode, said Mary Stewart, its executive director. She said research projects through Oregon State University might help provide the clarity needed to answer a tough, simple question:

How will Oregon both accommodate future growth and protect the land base that makes the state's $3.47 billion-a-year agricultural industry possible?

Oregon has a good shot at preserving its best farmland if its current land-use regulations remain undiluted, said JunJie Wu, an Oregon State University assistant professor of agriculture and resource economics.

With 16 million acres of farmland conserved within identified Exclusive Farm Use zones, Wu said his research indicates that Oregon decision makers are more committed than other state leaders to preserving the agricultural land base that supports the industry.

"From a research perspective, (Oregon) is a really good laboratory to compare land-use regulationsand see which ones are more effective and which are not effective," Wu said.

Evaluating the degree to which farmland conservation figures into decisions to annex farmland into cities is an important step toward identifying ways to preserve the best farmland and predict where future development might occur.

Wu, who began his career as an agriculture and resource economist in the corn- and soybean-dominated Iowa landscape surrounding Iowa State University, said his research "aims to understand forces affecting land use changes" and to help Oregon maintain its unique agricultural industry for decades to come.

Man standing in front of covered bridge.

JunJie Wu, OSU assistant professor of agricultural and resource economics, believes Oregon can preserve its best farmland if the state's current land-use regulations remain undiluted. Photo: Lynn Ketchum

Unlike states such as Iowa, Oregon has a diverse, high-value, agricultural industry in the Willamette Valley that includes gourmet specialty fruits and nuts, a growing wine industry and a thriving nursery industry.

Such commodities can be produced on small acreages close to developed areas. For example, a nursery in the Portland area thrives even in the shadow of Portland International Airport. To begin their research, Wu and OSU graduate research assistant Seong-Hoon Cho generated new data to answer some key questions: Just what factors do local land-use planners in five western states consider when imposing land-use regulations, and how do land-use regulations in turn affect land-use changes?

Wu and Cho went to the source. They asked 190 county land-use planners in Oregon, Washington, California, Idaho and Nevada to fill out a questionnaire detailing land-use regulations in their counties, as well as the goals of these regulations.

The land-use planners who responded provided information such as how much land in each county had been zoned as farmland and forest; which percentage of counties enacted comprehensive land-use plans, and how much annexation occurred.

By combining the information from the survey and the data from the National Resources Inventories, Wu and Cho identified factors affecting farmland loss and urbanization.

"We found that agricultural zoning, state land-use planning, and mandatory review of projects involving farmland conversion are effective in controlling the loss of farmland to development," Wu said.

"Population growth, rising household income and the proximity to a metropolitan center were found to be significant socioeconomic and location variables affecting development of farmland," he said.

The loss of farmland to development affects public finances, according to the researchers. Wu and Cho found evidence of a phenomenon they long suspected; urban sprawl and development of farmland tends to increase the amount of money cities must spend for roads, schools and other services. In turn, this increased cost is passed along to the public in the form of higher property taxes.

Land-use planning is a response that seeks to keep those public costs in check, Wu said.

Sold sign with houses in the background.

Housing developments adjacent to farmland south of Salem, a common sight in the mid-Willamette Valley. Photo: Lynn Ketchum

The bottom-line result of the survey indicated that Oregon and Washington are more active in terms of controlling farmland loss, Wu said.

California, Idaho and Nevada ranked third through fifth, respectively, in both effectiveness of land-use plans and commitment to preservation.

Wu's research found a surprising result of planning efforts to protect forest land.

"It appears that forest zoning tends to increase farmland loss because when population pressures force a conversion of land, it is more likely that farmland is converted than forest land."

How much Oregon farmland is converted to other uses each year?

According to figures from the Land Conservation and Development Commission, Oregon counties approved about 600 new building developments in the Exclusive Farm Use zone between 1995 and 1998.

Since then, about 300 new non-farm developments of all types have been approved for construction on farm land each year.

The approval of non-farm construction of houses and other buildings is an issue that divides Oregon farmers as much as the rest of the population, said Don Schellenberg, associate director of the Oregon Farm Bureau.

The official policy of the Oregon Farm Bureau is to "support land-use planning for the principle of protecting resources and the agricultural environment and infrastructure that farmers and ranchers require to produce food and fiber for current and future generations."

"Other countries see their food supply as part of their national defense," Schellenberg said.

Among those who support Oregon's agricultural heritage, the gradual liberalization over the years of the types of dwellings permitted in the Exclusive Farm Use zone is a sore point.

"One of the things we are concerned about is that (originally), there were seven conditional non-farm uses permitted in the Exclusive Farm Use zone," Schellenberg said. "Today, there are 50. Tongue in cheek, we're thinking of changing the name from Exclusive Farm Use to Elusive Farm Use zoning."

Who is seeking these exemptions? Usually, it is farmers themselves.

A good example is a Portland-area man from a family of fifth-generation farmers. His brother still works a 55-acre remnant of a sprawling family farm in Marion County. The man did not wish his name to be published.

Until 40 years ago, much of the family's land was in virgin timber on 18 inches of rich loam known as "Woodburn-grade" soil. Converted to farmland, the farm gradually was sold off or leased to other farmers.

Although the man would like to see his family's land continue in agricultural production, he is open to selling off a portion of it at a higher price to accommodate the northward growth of Salem and Keizer. His brother wants to keep working the farm.

The family exemplifies the division of opinion within the agricultural community, according to retired dairy farmers Hector and Kitty Macpherson. Selling the farm used to be the way farmers retired, Kitty Macpherson said.

"The farmers had a life plan you could describe as 'live poor, die rich'," she said from her tidy dining room on family's 300-acre farm on the Linn County side of the Willamette River near Corvallis.

Hector Macpherson, whose father started the family's farm 84 years ago, said he and other Linn County dairy farmers came home from World War II to find housing developments cropping up all over Willamette Valley farmlands.

Husband and wife stand in front of barn.

Kitty and Hector Macpherson, retired Willamette Valley dairy farmers, share the concerns felt by many farmers about the steady loss of farmland to development. Photo: Lynn Ketchum

Macpherson and his fellow farmers became worried that they soon would become unwelcome. "We didn't want people complaining about our dirt, flies and noise," he said.

Although the state legislature authorized county planning and zoning in 1947, the concept lay dormant until the 1960s.

Macpherson credits a young OSU Extension agent from Union County, Ted Sidor, with tackling the tough job of raising awareness and taking action. Macpherson refers to Sidor as the Paul Revere of farmland protection.

"Ted knew about urban sprawl even if Union County had little of it," Macpherson said. "He developed a slide show presentation of the enemy (uncontrolled development) and-with the helpful example of a particularly obnoxious wrecking yard-convinced the Union County Commissioners to appoint a planning commission."

Sidor continued his near-solo campaign to build support for farmland protection for more than five years with little money.

When Gov. Tom McCall joined the farmland conservation cause in the mid-1960s, the momentum caught fire, resulting in 1973's Senate Bill 100, which requires counties to zone lands and protect the best farm and forest acreage.

Macpherson, who is widely considered one of the pioneers of Oregon's land-use legislation, had been elected to the state senate and was among those who signed the landmark Senate Bill 100 into law.

Sidor was able to see most of Oregon's counties implement farmland protection zones before he died in 1983 at age 62.

Emory Castle, the retired former head of OSU's Department of Agriculture and Resource Economics, said OSU research has been involved since the start in providing soil information and other scientific data to help land-use planners make tough annexation decisions.

However, despite at least two major efforts in the past 15 years to identify lesser farmlands suitable for development, no effort to carve up the original Exclusive Farm Use zones has survived politically.

"The major problem (remains) that it is very hard to make distinctions among different classes of agricultural land," Castle said. "The tendency is to lump all rural lands together and treat them all the same way. I am not sure that a planning process such as the one we have makes those distinctions well, but it's important to make those distinctions. It's very different if you are talking about foothill land with low agricultural productivity versus something that is very productive."

Yet if history is any judge, employing pure science as a basis for land-use decisions is not an idea that has been able to survive the political divisions between farmland conservation advocates and those who favor more development.

Growing city next to farmlands.

Urban growth is exerting increasing pressure on farmland throughout the United States. Nearly 50,000 residents a year move into Oregon, creating demand for new housing. Photo: Bob Rost

In the 1980s, for example, OSU Extension crop and soil scientist Herb Huddleston and geographer James Pease developed a system for identifying and ranking Oregon farmland based on soil type.

The project drew interest from land-use planners such as Kent Howe of Lane County, who was concerned about the dwindling supply of land suitable for development within the county's urban growth boundary.

Despite widespread interest in the research, the Huddleston-Pease model ultimately proved too politically unpopular. Many feared that ranking farmland by soil type would open up too much land to development, which would have the effect of "checker-boarding" farmland.

In the meantime, Howe said, the problem of disappearing buildable land within the urban growth boundary remains.

"We're 98 percent built up (in Lane County)," Howe said. He estimated there was a three- to five-year supply of land suitable for development remaining in the county.

Wu said it may be time to take a new approach to land-use planning that doesn't rely solely on need and profit motive to decide where and when farmland is annexed.

For the second phase of Wu's research, he and Cho borrowed an idea from Wall Street for analyzing which annexation proposals are likely to result in the most productive use of the land in the long run. Known as an "option value approach," the process treats land-use matters as if they were investment proposals.

Greatly simplified, this economic principle assigns a value to each of the possible use options for a parcel of land. The possible outcomes are identified and assigned a priority. The concept is a staple among stock investors who use it to gauge the long-term potential of an investment.

Wu said the virtue of the option value approach in land-use planning is that it factors into account the irreversibility of a decision to convert farmland to urban use.

"If you develop it now, you may later find out that you made a wrong decision and you can't reverse it," he said.

Although the option value approach would "raise the bar" on making decisions to convert farmland, those decisions could be made with greater confidence, Wu said.

Kenagy said he would welcome the option value approach or any other approach that offered a clue about the future of his land. He already can attest to the problems of farming near an urban center.

The back yards of 10 ranch-style houses face the opposite side of his fence. That simple reality has cost Kenagy money and time, and caused aggravation.

His neighbors complained that his irrigation sprinkler system was spraying their back yards, so Kenagy installed a one-way system that sprayed only in the direction of the field. "It works pretty good-unless the wind shifts," Kenagy said.

What needs to shift now, he said, is our control over a system that continues to close in on farmland.

"Our system now can't preserve farmland, it can only slow the process of development," Kenagy said. "If we're going to keep the land, somewhere, somehow, we need to draw a line in the sand."

OREGON DAIRY FARMS MIGRATING EASTWARD

The farmers who pressed for enactment of Oregon's land-use laws 27 years ago just wanted a little peaceful coexistence with their neighbors. They hoped that laws keeping a distance between western Oregon dairy farms and subdivisions would serve the best interests of both.

Cows feeding.

Some of western Oregon's dairy farming operations are moving to the eastern part of the state. A new cheese plant is scheduled to open near Boardman in June 2001. Photo: Bob Rost

Now after almost three decades of expansive growth, dairies are moving out of western Oregon, seeking more open land and fewer neighbors nearby.

"It's happening all over the country," said Lisbeth Meunier-Goddik. An Oregon State University Extension Service dairy specialist, Meunier-Goddik works directly with dairy farmers and producers on product development and problem solving.

eunier-Goddik said dairy operations both large and small are moving to more isolated, drier locales to be closer to cattle feed and farther away from objections to the smells, noise and other by-products of dairy farming.

"I can't blame them if they want to move where they have more open space," she said of dairy operations. "Manure moves from pollutant to fertilizer-if you have enough land."

Mike Gamroth, an OSU Oregon State University Extension dairy specialist, said Oregon dairy owners are simply seeking a more favorable business climate. "The dairy industry is looking to places that want them as opposed to ones that simply tolerate them," he said.

Historically, Oregon dairies have thrived on the lush green pasturelands in western Oregon. The largest dairy organization in the state, the 157-member Tillamook County Creamery Association (TCCA), was formed in 1909.

Gamroth said that when he started his career with OSU Extension 25 years ago, Tillamook dairies were among more than 1,300 dairies that were licensed in Oregon-primarily in western Oregon. Since then, the number has dwindled to fewer than 400.

In response to growing population pressure and increasing dairy waste management concerns, the TCCA headed east. On Dec. 7, 1999, the association broke ground on its new $50 million satellite cheese plant near Boardman in Morrow County, 164 miles east of Portland.

Called Columbia River Processing, the plant is expected to open in June 2001. When fully operational, the plant will employ more than 50 people to produce about 600 million pounds of cheese annually from 30,000 dairy cows to be located there, said Michelle Ruby, a spokeswoman for the TCCA. The association intends to continue operation of its primary plant just outside Tillamook.

Other dairies are relocating to Malheur, Klamath, Baker, Lake and Harney counties, Gamroth said, where support industries such a feed plants, transportation outfits and smaller dairy operations are forging a network of interdependent businesses.

Published in: Economics