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Farmland ownership might have different look in 15 years

May 18, 2010|By JEFF SEMLER

We are blessed to live in such a beautiful corner of this blue planet. When many of the privileged look out their windows, they get to see farms and fields, but that view could very well change and sooner than many think.

No, I am not necessarily worried about resurgence in the building boom. The fact is 70 percent of America's farmland will change hands in the next 15 years.

Again, it does not necessarily mean the land will go out of production, but it is a concern. Our aging farmers will be leaving the work force and thus the transferring of businesses and assets will take place. Maryland, and by association, Washington County, is cursed by inflated land values that make it difficult if not impossible to afford land to put under the plow.

When transferring assets, many farmers are forced to mortgage their future to finance the previous generation's retirement. In some cases, there are siblings that feel entitled to share the value of the parents' farm even though they chose years ago to walk away from farm life.

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Where families and emotions are concerned, things get very complicated. If you are involved in agriculture, regardless of your age, please start to make retirement investments that do not involve your real estate assets. I do not know any producer that does not aspire to transfer their passion to their offspring, but they often times torpedo those possibilities because their assets are unaffordable for the next generation to purchase.

This brings us to our next threat, farm profitability. All agree that 2009 was a year of staggering losses in the dairy industry. Farms were hit with very low prices in a year of high expenses. Many lenders reported producers burned through years of hard-earned equity and needed more loans and restructured payments from banks to survive.

It is projected this year we will see about break-even prices. That may not be enough for many farms to pay down the debt they rang up last year. At least we can be relieved the worst appears to be over.

Lastly, there is a great indifference toward agriculture by the general public. Oh yes, if you ask the man on the street if he appreciates agriculture they will always say they do. However, their actions speak louder than words. When buying food, the vast majority take little or no time to determine where their food originated. I am not implying malice here, just busyness. Most everyone I meet is rushing somewhere. And I must admit that sometimes I too succumb to the rat race.

I have said many times in this very space if you want to keep farmers on the land and the land open you only need to make farming profitable. How can you help? First, buy local whenever and wherever possible. Additionally when shopping look at source codes and country of origin labels.

Soon you will get your chance. Strawberries, peas and greens will be the first to be available, but don't stop there. Tomatoes, sweet corn, peaches, potatoes, apples and the list go on. Buy it, eat it and lay some by as the old-timers would say.

Jeff Semler is an Extension educator, specializing in agriculture and natural resources, for the University of Maryland Extension. He is based in Washington County. He can be reached weekdays by telephone at 301-791-1404, ext. 25, or by e-mail at jsemler@umd.edu">jsemler@umd.edu

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