Overview of the Massachusetts Department of Agricultural Resources

This section describes the makeup and responsibilities of the Massachusetts Department of Agricultural Resources.

Table of Contents

Overview

The Massachusetts Department of Agricultural Resources (MDAR), an agency within the Executive Office of Energy and Environmental Affairs (EOEEA), was established under Section 1 of Chapter 20 of the Massachusetts General Laws. Chapter 20 also established a Board of Agriculture to oversee MDAR’s operations that consists of 13 members, appointed by the Governor, who represent diverse agricultural operations within the Commonwealth. At least nine of the board’s members must be farmers. According to MDAR’s website, “The Department’s mission is to help keep the Massachusetts food supply safe and secure, and work to keep Massachusetts agriculture economically and environmentally sound.” MDAR’s day-to-day operations are administered by a commissioner who is appointed by the Secretary of EOEEA. MDAR had annual appropriations of $32,448,025 and $32,622,854 for fiscal years 2015 and 2016, respectively, and approximately 82 employees. MDAR is headquartered at 251 Causeway Street in Boston.

During our audit period, MDAR had six operating divisions: Administration, Agricultural Markets, Animal Health, Crop and Pest Services, Legal Services, and Agricultural Conservation and Technical Assistance (ACTA). Under its ACTA Division, MDAR operates its Agricultural Preservation Restriction (APR) Program, which was the subject of our audit.

APR Program

MDAR’s APR Program was established by the state Legislature in 1977 and is a key component of the Commonwealth’s farmland protection efforts. This program is designed to protect the most productive agricultural lands in the Commonwealth and establishes permanent deed restrictions on agricultural lands, protecting them from any use that might diminish the area’s agricultural potential. Under this voluntary program, in accordance with Chapter 780 of the Acts of 1977, the Commonwealth and a farmer whose application to participate in the program has been approved enter into a contract under which the Commonwealth agrees to pay the farmer the non-agricultural value1 of the farmland in exchange for a permanent deed restriction that prevents uses of, and activities on, the property that might affect its present or future agricultural use and viability. In return for this payment, the farmer agrees to abide by an APR Program contract provision in perpetuity on the designated farmland. The provision states that the farmer must obtain approval from MDAR for any future construction of buildings or other structures, excavation of farm soils, or non-agricultural events to be held on the APR Program farmland. Additionally, the provision spells out the process a farmer must follow when s/he wants to sell APR Program farmland.

Since the inception of the APR Program, MDAR has modified its standard APR Program contract twice. In 1987, MDAR included a “Right of First Refusal” (ROFR) clause, which gave the Commonwealth the option to purchase farmland at the same price offered by an independent buyer. Subsequently, in early 1994, MDAR amended the standard contract by replacing the ROFR clause with an “Option to Purchase at Agricultural Value” clause, which established the Commonwealth’s right to purchase a property if a participating farmer receives a purchase offer for the land at its agricultural value as opposed to its fair market value or the purchase price offered by an independent buyer. The sale price is determined through appraisal or by adjusting the original purchase price based on the interim change in the Consumer Price Index.2 In these cases, MDAR, as an agent for the Commonwealth, may approve the farmer’s selection of an independent buyer and waive its option to buy the APR Program farmland; exercise its option to buy the farmland at fair market value or the price offered by the farmer’s selected buyer; or send the property out to bid, if MDAR determines that the original potential buyer does not meet the qualifications for purchasing APR Program farmland, such as demonstrating an ability to pay or having a résumé that indicates agricultural experience. For cases in which multiple qualified bids are received, MDAR has developed, and made available to all APR Program parcel sellers and bidders, a scoring form titled Internal Evaluation—Statement of Interest that MDAR uses to assign points based on the bidders’ farming histories and their proximity to the APR Program parcel being sold. MDAR subsequently informs the bidders of the evaluation outcome and gives them copies of their evaluations, detailing the points assigned to their bids. The winning bidder then completes the property transfer and owns the APR Program farmland, subject to the APR Program contract signed with the original holder of the APR Program farmland. In cases where multiple qualified bids are not received, MDAR can either purchase the land or allow the property to be sold to the original bidder.

Since 1995, MDAR has partnered with the United States Department of Agriculture’s (USDA’s) Natural Resources Conservation Service (NRCS) to help fund the purchase of farmlands such as those in its APR Program. The Agricultural Land Easements (ALE) Program administered by NRCS provides financial assistance to state and local governments and nongovernmental organizations that have farmland protection programs. The main goal of this program is to protect the long-term sustainability of the nation’s food supply by preventing farmland from being used for non-agricultural purposes. Farmers who want to preserve a parcel of farmland work with both MDAR and NRCS to complete applications to be accepted into the APR and ALE Programs. Once NRCS approves an application, MDAR funds the farmland purchase fully. MDAR then seeks reimbursement from NRCS. NRCS may contribute up to 50% of the fair market value of the cost of the farmland.

909 The number of APR Program contracts that MDAR had entered into as of the end of the audit period.

 

As of the end of our audit period, MDAR and had entered into 909 APR Program contracts, each representing a specific parcel of land, in 13 of the 14 Massachusetts counties. Of the 909 farmlands, 298 (33%) were funded with NRCS resources. NRCS requires MDAR to monitor farmland that the ALE Program has helped subsidize to ensure that the APR Program farmland owner complies with the APR/ALE Program agreement and that the farmland is still suitable for agriculture.

The Agricultural Lands Preservation Committee (ALPC) within MDAR is responsible for evaluating APR Program applications and deciding whether to approve them. State officials on the committee include the commissioner of MDAR, who is its chair; EOEEA’s Secretary or a designee from that agency; representatives from the Department of Housing and Community Development and from the Center for Agriculture at the University of Massachusetts Amherst; and the chair of the Massachusetts Board of Agriculture. Four other members are appointed by the Governor; two of these must be farmers. The committee makes its decisions based on MDAR’s recommendation regarding each parcel’s suitability for agricultural use. ALPC also reviews both a parcel’s fair market value in an open, competitive sale and the value of the land when used for agricultural purposes only, as determined by independent appraisals. Additionally, ALPC has the authority to hold adjudicatory hearings to hear grievances from farmers who have been denied approval from MDAR for conducting certain agricultural activities, building structures, or conducting non-farming activities on APR Program farmland. (Such approval is required before an APR Program farmland owner can construct buildings or hold non-agricultural events on APR Program farmland.) ALPC has the final authority to grant APR Program participants certificates of approval for such activities if they have been denied. Finally, ALPC may advise MDAR and make policy recommendations or changes to the agency. ALPC does not hold regularly scheduled meetings but rather meets at the request of the chair, who is also required to schedule a meeting upon the request of any five owners of APR Program parcels.

Since the APR Program’s inception, the Commonwealth has spent approximately $353 million to purchase 73,000 acres of farmland. However, the program has seen a decline in funding from both the Commonwealth and NRCS (see Other Matters). For example, in fiscal year 2011, MDAR spent $14,330,360 securing APR Program restrictions on 27 farms, consisting of 1,496 acres, but in fiscal year 2017, it spent only $5,044,372 for 14 farms with 532 acres. The table below shows the number of APR Program applications that were approved during our audit period.

Period

APR Program Farmland Contracts Approved

July–December 2015

4

January–June 2016

5

July–December 2016

6

January–June 2017

8

 

14% of Massachusetts farmland is involved in the APR program

During our audit period, there were 7,755 farms in Massachusetts covering more than 523,000 acres. Approximately 14% of this farmland was involved in the APR Program. The number of farms and what they produce have dramatically changed since the inception of the APR Program. For example, the number of farms producing dairy and milk products in Massachusetts has decreased, from a high of more than 900 in 1978 to just 147 during our audit period. The table below compares the types of farms operating in the Commonwealth around the time the APR Program was established with those operating in calendar year 2012, the most recent year for which USDA has published data.

 

Type of Farming

Number of Farms in 1978

Number of Farms in 2012

Percentage Change

Vegetables and Melons

968

923

(5%)

Fruits, Nuts, and Berries

907

779

(14%)

Nursery and Greenhouse

749

968

29%

Tobacco

44

11

(75%)

Hay, Silage, and Feed

1,090

1,097

0%

Cattle and Calves

1,803

628

(65%)

Dairy and Milk Products

902

147

(84%)

Poultry and Eggs

458

380

(17%)

Hogs and Pigs

435

135

(69%)

Sheep, Lambs, and Wool

280

365

30%

1.    Non-agricultural value is the difference between fair market value and fair market agricultural value. Section 22.02 of Title 330 of the Code of Massachusetts Regulations defines “fair market value” as “the most probable price that a parcel would bring in a competitive and open market under all conditions requisite to a fair sale,” including selling the farm to commercial interests. It describes “fair market agricultural value” as the combined total value of the agricultural land; the agricultural business, including buildings, infrastructure, and other elements; and any residences on the APR Program farmland.

2.    According to the US Bureau of Labor Statistics, the Consumer Price Index is “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas.”

Date published: August 22, 2018
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