Local governments in the Central Valley are starting to adopt policies that require developers to mitigate the conversion of farmland to urban uses, primarily by acquiring agricultural easements or paying in-lieu fees. San Joaquin County has become a hotbed for the new policies, and farmland advocates are hoping to export those policies to other places.

The City of Stockton — which has plans to expand into more than 5,000 acres of outlying cropland and pastureland — adopted one of the most aggressive mitigation ordinances in the state in February. The new ordinance requires developers of projects of at least 40 acres (which is nearly all projects in Stockton) to offset their impacts by acquiring agricultural easements elsewhere in San Joaquin County. Developers must purchase one acre of easement for every acre of farmland they develop, and the protected land must have comparable soil quality to the land being developed. Developers of smaller projects may pay a mitigation fee of $9,600 per acre. For the program's first year, developers of larger projects may also pay the fee; after that, they must locate and buy easements themselves.

Stockton adopted its agricultural land mitigation program only three months after San Joaquin County adopted a similar one. Other cities in the county — including Tracy, Lathrop and Manteca — recently started charging mitigation fees for development of farmland.

"It's undisputed in my mind that farmland protection policy has picked up serious profile," said Bill Martin, executive director of the Central Valley Farmland Trust, which is administering Stockton's new program.

For differing reasons, local government officials, farm advocates and developers are closely studying the new city and county policies in San Joaquin County. The policy discussion definitely has reached beyond San Joaquin County:

• Stanislaus County planners are working on an update of the general plan's agricultural element, and they see the San Joaquin County program as sort of a model, said Ron Freitas, Stanislaus County planning director.

• In Fresno County, the Fresno Council of Governments has received a $200,000 grant from the California Partnership for the San Joaquin Valley to create and implement a model farmland conservation program.

• In Merced County, the local farm bureau and others are pressing for inclusion of agricultural mitigation policies in a general plan update.

• Gov. Schwarzenegger's proposed budget contains $10 million from Proposition 84 for the creation and implementation of mitigation programs, according to the Department of Conservation.

Under an agricultural conservation easement, which can last anywhere from 20 years to perpetuity, a landowner essentially sells his right to develop, typically for one-third to two-thirds of the existing value of the land. For years, environmental impact reports have specified the loss of farmland as a significant impact of a development or plan. However, unlike mitigation for impacts to animal and plant habitat, mitigation for agricultural impacts has been ad-hoc at best. A few jurisdictions have required developers to buy agricultural easements or set aside farmland, but most mitigation is not based on any definitive policy.

A 2003 court ruling threw into doubt whether the California Environmental Quality Act (CEQA) can be used to require mitigation. In Friends of the Kangaroo Rat v. California Dept. of Corrections, No. F040956, the Fifth District Court of Appeal ruled that it was not possible to mitigate the conversion of farmland with an agricultural easement (see CP&DR Legal Digest, January 2004). The state Supreme Court depublished the decision so it did not establish a precedent, but the ruling still stands.

However, other legal activity is at the root of the policy shift in San Joaquin County. The local chapter of the Sierra Club filed and settled three lawsuits — one over Lathrop's approval of the 11,000-unit River Islands project in Lathrop, one over the South San Joaquin Irrigation District's extension of new water service to Tracy, Lathrop and Manteca, and one over Stockton's adoption of a larger sphere of influence.

"The ball really started rolling on farmland mitigation when the Sierra Club started suing local governments in the San Joaquin Valley," observed Ed Thompson, California director of the American Farmland Trust.

The Sierra Club settled the River Islands lawsuit during late 2003 when developer Cambay Group agreed to provide $200,000 to help establish a farmland trust and pay $2,200 an acre (adjusted for inflation) for every acre it develops in the 4,800-acre project. That deal provided the template for the environmental group's settlement with the irrigation district in which the three cities involved agreed to establish a farmland mitigation program and charge $2,000-per-acre development fees. In 2005, the club dropped its suit against Stockton when the city agreed to adopt a mitigation program.

Erik Parfrey, a leader of the Sierra Club's Mother Lode chapter who helped spearhead the lawsuits, gives a great deal of credit to Cambay Group and the local governments for agreeing to fund and implement "real programs." Stockton originally agreed to a mitigation fee of only $3,200 an acre, Parfrey said. However, a study prepared last year by Economic & Planning Systems and ESA Associates found that a fee of $9,000 an acre was needed to acquire easements. Although developers and the local chapter of the Building Industry Association protested, the City Council accepted the study and eventually voted 6-0 to charge a $9,600-per-acre fee.

"The legal authority is there, it just takes the political will of these city councils and boards of supervisors to do the right thing," Parfrey said.

None of these ideas is new. Since 1995, the City of Davis has had a farmland preservation policy. In 2001, Davis strengthened the policy and now requires developers to preserve in perpetuity two acres of farmland for every acre developed. In addition, the preserved land must be adjacent to the development site. Since 1995, Davis has secured agricultural conservation easements on more than 2,000 acres surrounding the town.

But Davis's anti-growth politics are the antithesis of attitudes in most of the Central Valley, where property rights have stood supreme. Attitudes may be changing at least a bit, partly because some well-known property rights defenders — including local farm bureaus — have become advocates for farmland mitigation and partly because recent trends in farmland conversion have people worried about the future of the Valley's $25 billion-a-year agricultural industry.

Merced County may have more acreage (nearly 10,000 acres) covered by agricultural easements than any county in the state because of the establishment of a farmland trust in 1991. The trust has since merged with others into the professionally staffed Central Valley Farmland Trust. Local politics in Merced County, however, have been staunchly pro-growth, and the county did not sign up for the Williamson Act (see sidebar) until 2000, said Diana Westmoreland Pedrozo, executive director of the Merced County Farm Bureau. The farm bureau regularly requests four-to-one mitigation of urban development, she said. Most development has been approved with no mitigation at all for the loss of farmland, although the county did require one-to-one mitigation for the new University of California campus and a few other projects.

"Mitigation is a way to keep track of our land," Westmoreland Pedrozo said. "It's really hard for the people in ag to compete with the speculative development. What we've become here in the north San Joaquin Valley is the housing market for the Bay Area."

Indeed, development — much of it low-density housing tracts — has been swallowing up about 20,000 to 25,000 acres of Central Valley farmland every year since at least 1990. The rate at which landowners are canceling Williamson Act contracts, a precursor to development, has never been higher, according to Brian Leahy, head of the Department of Conservation's Division of Land Resource Protection. And at the current rate and density of development, the Valley will lose about one-seventh of its irrigated farmland by 2040. Organizations such as the Great Valley Center have been shouting about these conversion numbers for years, and it appears that people are starting to listen. During recent public workshops for the San Joaquin Valley Blueprint Process (see CP&DR Insight, May 2007), preservation of farmland often emerged as the top priority.

"There is an undercurrent," said Stanislaus County's Freitas, "that we have a finite resource here, and we have a strong agricultural base."

Whether the policies being adopted are adequate is a question still being debated. One-to-one mitigation still means that 50% of the farmland is lost to development, Westmoreland Pedrozo pointed out. Martin, of the Central Valley Farmland Trust, called the $2,000-an-acre fee imposed by some cities "woefully low" because agricultural easements often run $5,000 to $10,000 an acre. Thompson, of the American Farmland Trust, argues that mitigation should reflect the use of the converted land. Low-density development, especially the 1.5- to 20-acre ranchettes that sprawl across the Valley, waste land and should provide substantially more mitigation acre-per-acre than a dense subdivision, he said. Parfrey, of the Sierra Club, raised the issue of CEQA and suggested the law be amended to specify that acquisition of an agricultural easement is acceptable mitigation for the conversion of farmland.

Those questions aside, the nature of the conversation appears to be changing as farmland mitigation policies start to take root.

Bill Martin, Central Valley Farmland Trust, (916) 687-3178.
Ed Thompson, American Farmland Trust, (530) 753-1073.
Ron Freitas, Stanislaus County, (209) 525-6330.
Diana Westmoreland Pedrozo, Merced County Farm Bureau, (209) 723-3001.
City of Stockton agricultural land mitigation program: www.ci.stockton.ca.us/CD/PlanningDivision.cfm
Department of Conservation Williamson Act status report 2006: www.consrv.ca.gov/DLRP/lca/stats_reports/2006%20Williamson%20Act%20Status%20Report.htm

Agricultural Land Protection Grows

Although some local governments are adopting policies intended to protect farmland, Gov. Schwarzenegger's revised budget proposal released in May eliminates state funding for the Williamson Act, the state's largest farmland preservation program.

Under the Williamson Act, landowners who agree not to develop their property for 10 years receive property tax reductions of 20% to 75%. About 16.6 million acres of farmland and ranchland — roughly one-third of all privately owned land in California — are protected by the Williamson Act, according to a Department of Conservation's status report released in May. About 820,000 acres were enrolled in the Farmland Security Zone (or "Super Williamson Act"), which provides even greater tax breaks for 20 years of protection from development.

The state backfills property tax revenue lost by counties because of the Williamson Act. However, Gov. Schwarzenegger has proposed eliminating the subvention, saving the state about $39 million during the 2007-08 fiscal year. Gray Davis proposed a similar cut when he introduced the 2002-03 and 2003-04 budgets, but both times he added the money back. Schwarzenegger waited for the "May revise" to cut the Williamson Act subvention. Because Schwarzenegger proposed the cut later in the process, many people are taking it very seriously.

During a news conference, the governor said of the cut: "We thought we can use that money for better use."

The Sacramento Bee, which opposes the cut, blamed Susan Kennedy, who was Davis's cabinet secretary and is now Schwarzenegger's chief of staff. Others noted that the governor's office released the May revise shortly after Assembly Minority Leader Mike Villines (R-Clovis) had called Schwarzenegger a RINO — Republican in name only. Villines represents Fresno County, which is the largest recipient of Williamson Act subventions.

Assemblyman Tom Berryhill (R-Modesto), whose district includes all or portions of six Central Valley and Sierra counties, announced he is "adamantly opposed to his [Schwarzenegger's] attempt to balance a budget on the backs of rural counties I represent."

Local government officials say they may drop out of the Williamson Act program without the subventions. The California Association of Counties, the Regional Council of Rural Counties, the League of California Cities and the California Chapter of the American Planning Association have submitted a joint letter opposing the governor's proposal. "Eliminating the subvention payments is the first step towards a total unraveling of the broadest based agricultural program in the state," the letter states.

Top 5 recipients of Williamson Act subventions in 2005:

• Fresno County, $5.6 million
• Kern County, $4.8 million
• Tulare County, $3.5 million
• Kings County, $2.7 million
• San Joaquin County, $1.9 million