Market-Oriented Approach to Farmland Preservation Best Bet for Michigan

Preservation should be addressed through voluntary, market-based approaches

According to what is rapidly becoming conventional wisdom, Michigan's agricultural industry is in crisis: From 1982 to 1992, Michigan lost 854,000 acres of farmland, a loss equivalent to the size of Rhode Island. Today, Michigan is supposedly losing its farmland at the rate of "10 acres an hour."

These figures from the 1994 Farmland and Agriculture Development Task Force paint a dire picture of Michigan's agricultural industry and are fueling attempts to stop land development. Last March, a group of fifteen statewide organizations consisting of urban experts, environmentalists, and farmers came together in Lansing to pledge to protect areas "valuable to tourism, farming and wildlife."

These efforts are directly aimed at stopping so-called "urban sprawl." In Michigan, urban sprawl is virtually synonymous with suburbanization: the process of citizens choosing higher quality housing in smaller communities outside of big cities. But before state and local policymakers jump on the "stop development" bandwagon, they should consider a few important facts about Michigan farmland loss.

First, farmland loss does not occur in a vacuum. If land is not farmed, it must be used for some other purpose, whether as homes for young families, businesses that bring jobs and services closer to residents, or even parkland. Overall, urbanization may account for less than one third of Michigan's farmland loss.

Second, Michigan has a lot more open and rural space than many may think. According to the U. S. Department of Agriculture, Michigan is one of the most urbanized states in the nation—ranking 11th overall—with more than 90 percent of its land still rural. Thus, even if Michigan doubled the amount of land in urban areas, more than 80 percent of its land would remain rural.

Third, farmland loss has moderated significantly in recent years. While the past four or five years have seen the most vocal outbursts of anti-sprawl rhetoric, farmland loss was fastest in the 1960s. During this decade, land in farms declined by 17.5 percent. Farmland loss moderated to 10.2 percent in the 1970s, and the loss rate was cut almost in half in the 1980s to just 5.3 percent. During the 1990s, the rate was cut almost in half again, falling to 2.8 percent. These moderations occurred without comprehensive land-use planning or state directed mandates to limit housing production. Meanwhile, agricultural production has remained steady in the 1990s, hovering around 24 million tons since 1992 despite continued urbanization.

Fourth, farmland conversion is a voluntary act. Farmers are not forced to sell their property. Developers are not forced to buy farm property. Michigan citizens are not forced to buy houses on the urban fringe.

Developers are willing to pay top dollar for agricultural land because they think people will buy houses and cater to local businesses in locations superior to the ones they live in now. Farmers are some of the unintended beneficiaries of a growing economy with rising incomes that allows families to choose housing that better meets their needs, communities that more fully reflect their own values, and school districts that do a better job educating their children.

Despite these important facts, farmland preservation is not a "non-issue." After all, land is a finite resource. But policymakers must also recognize that the potential uses for land are not finite. Farming is not inherently superior economically or socially to housing, shopping, businesses, or parks.

The issue of farmland preservation should be addressed through voluntary, market-based approaches. Subsidizing farms and other agricultural industries or putting land under government control by purchasing future development rights will cause even more problems in the long run.

Moreover, attempts to directly control and regulate land use through specialized agricultural zoning or comprehensive planning is likely to harm farmers. Preventing future development through public policy runs the risk of reducing the market value of farmland and thus eroding the value of a farmer's chief asset.

An alternative approach would strengthen the market process while ensuring that the full costs and benefits of land development are included in the decision to develop property. This can be achieved by

  • Charging beneficiaries the full costs of extending roads, sewers, water lines and other infrastructure for new development;

  • Making cities more competitive by deregulating land use, cutting spending and taxes, diversifying middle and moderate income housing opportunities, and improving public education through competition and choice;

  • Limiting the ability of state and local governments to distort real estate markets and diminish private property rights through mandates such as minimum lot sizes, minimum floor area requirements, open space requirements, and moratoria on building permits.

Michigan's quality of life and standard of living can be sustained in the long run only by providing a climate that facilitates market-driven land development and protects private property rights. Anti-development activists' attempts to restrict land development merely limits choice and reduces access to quality housing for the vast majority of Michigan residents, and ultimately harms the farmers they say they are trying to protect.

Samuel Staley is director of urban and land use policy at Reason Foundation and co-editor of the book "Smarter Growth: Market-Based Strategies for Land-Use Planning in the 21st Century."

Samuel Staley is Research Fellow





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