Who owns America – What’s it worth?
Last month’s Corner was about sustainable land use, based upon economic principles. I must admit that economic theory is not my strong point, but understanding the basics is important since our entire society seems to be controlled by economics. After reading through John Ikerd’s article “Who Owns America – Land Use Planning for Sustainability” several times, I think that I can relay the basics to you in a few paragraphs.
The three cornerstones of sustainability are ecological soundness, economic viability and social justice.
Because we live in a capitalist system, economic viability pretty much determines the land use choices that we make. The easiest way for me to understand economic theory as it relates to land use is to use the example of a small parcel of land. Let’s pretend that we’re taking about a small farm. In order for a farm to pay for itself, to “make a living” for the farmer or landowner, it must make a profit.
For the past 75+ years, fertilizers and additives have been used to increase yields. Farm laborers get paid very little, so smart farmers have been able to make a profit and survive. There is a problem with this, however: commercial fertilizers, fossil fuels, pesticides, and machinery are all finite, non-renewable resources. Therefore, this form of farming is not sustainable, either for a small farm or huge mega-farms. If we can no longer count on fertilizers, etc. to sustain our farms, and we can no longer pay our farm workers a living wage, we’ll need to cultivate more land.
Back in the 1700’s, the production problem was solved by using slave labor on huge plantations to harvest cotton. South Carolina at the time was the richest state in the Union. But, slavery conflicted with the sense of social justice, so it was not sustainable. Now we use fertilizers and fossil fuels, yet they violate the 1st requirement for sustainability: ecological soundness. We’ve got problems for sure, and they are not easily solved.
Organic farming has made a big impact recently because it is environmentally sustainable, if we can figure out how to make if economically viable. Currently, the average Polk County farm owner is over 55 years old, so the transition to organic farming will depend upon the feasibility of a younger generation taking over at the helm.
As you can guess, there are problems making this transition difficult, the first hurtle being the high cost of land. That gets us right back to the problem of economic viability. Our local land values are skyrocketing through the roof nowadays, making it virtually impossible for young farmers to even begin to try to make a living if they do not already own the land. Organic farming is labor intensive, so the farms tend to be smaller than farms using traditional, mechanical farming techniques. And, if the organic farm is less than 10 tillable acres, that farmland is not eligible for a North Carolina’s Present Use Value (PUV) agricultural property tax deferment, so the young farmer may not be able to pay the Polk County land taxes each year.
Please take time to look back at Wed., July 29th edition of the Tryon Daily Bulletin, at the article on page 4 “Polk in top 5, Polk ranks 5th in state for the most value for their property”. Note that all the other counties in the Top 10 are mountain counties. All of these counties have lots of land and low populations. What pays for most of our county services? Property taxes. How does that work? Property values are assessed according to “highest and best use”, and that is based solely on economic viability. The higher land prices get, the more tax dollars are brought in to pay for community services.
Let me give you an example of how sometimes works. A seven acre parcel of farmland that is eligible for a PUV agricultural tax deferment has a taxable value of approx. $6,055. If that same seven acre piece of land is not eligible for an agricultural deferment, the property tax value is $115,000. That equals a 95% difference for the property tax bill. Even though the abovementioned seven acres has been used to raise cattle for the past 90+ years, it is not eligible for a PUV deferment because it is less than 10 acres, the state minimum for eligible farmland. The owner of this seven acres was smart enough to encumber his farm with an agricultural conservation easement, which lawfully restricts its use to agriculture only and thus legally restricts the property’s ‘highest and best use” value.
Yes, by taxing so much of our rural land according to potential development value we have great schools. That’s because we have so much open land to tax and so few people to serve. This is not sustainable. Think of sustainability (visually) as a box, with ecological soundness, economic viability, and social justice just being the three dimensions of a box: height, width, and length.
Our box is collapsing, slowly but surely, unless we work together to make some changes.