A farmland owners' guide to conservation easements
Want to protect a special feature or natural characteristic of your farmland but don’t want to give up ownership?
That’s exactly what a conservation easement is for – and it is an option more rural landowners and farmers are exploring. As of 2021, the USDA’s Natural Resources Conservation Service (NRCS) stated that 5 million acres had been enrolled in one of its conservation easement programs over the last 28 years.
Why? Because the farmers and landowners wish to make sure that they continue to provide protection for sensitive lands, protect wildlife and habitat and mitigate any potential effects caused by climate change.
Plus, there are often financial incentives involved, many times in the form of meaningful tax credits on the federal level and sometimes at the state level. Under the right circumstances, it can be a win-win for all.
With that in mind, we’ve put together a guide with the basics of what you, as a farmer or landowner, need to know about conservation easements and any benefits that may be available to you.
What is an agricultural conservation easement?
With an agricultural land easement (ALE), the NRCS works to assist anyone from private landowners, to governments and nongovernmental organizations “protect working agricultural lands and limit nonagricultural uses of the land,” according to the NRCS’s website. There is also a specific program for wetlands that may be part of the agricultural land an owner is seeking to protect.
These programs all work in a similar way. Owners keep their ownership and many rights, but must follow certain requirements for how they can use the land while under the easement agreement. This can include limiting nonagricultural use to agreeing not to use the land for any agricultural activity entirely. Wetland protection would be an example of the latter scenario.
Why participate in an easement program?
There are a number of benefits to a landowner participating in an ALE program. Those include:
- A method of retaining ownership of land, especially when it’s important to keep the land in a family
- Can remove underperforming cropland from production, reducing strains on resources
- Provides a source of income
- Protects high-quality soils and grasslands
- Keeps wildlife habitat intact, encourages continued biodiversity
- Protects and restores wetlands, which can improve water quality for all users, agricultural and non-agricultural
- Keeps carbon sequestered and lowers greenhouse gas emissions
Of course, there are also the financial benefits. Again, those can include tax credits or tax deductions of different types – and sometimes cash payments.
What types of land are eligible for easements?
Many different types of land can qualify for an agricultural land easement. While the landowners must meet certain criteria to be eligible, the land must be private or tribal land used as agricultural land, cropland, rangeland, grassland, pastureland and nonindustrial private forest land.
Agricultural Conservation Easement Program (ACEP)
For the Agricultural Conservation Easement Program (ACEP), the parcels must meet one of the following:
- Enrolled in order to project Prime, Unique or Other productive soil
- Enrolled to provide protection of grazing or related conservation values
- Feature historical or archaeological resources on the land
- Furthers a policy of the state or local body that is consistent with ACEP-ALE purchases
Wetland Reserve Enhancement Partnership (WREP)
Under the Wetland Reserve Enhancement Partnership (WREP), eligible partners and the NRCS sign an agreement to undertake the protection, restoration and enhancement of wetlands on a parcel of land.
Some of the specific benefits of this program include:
- Restoration and protection of wetlands in critical areas
- Cost-sharing opportunities for the restoration and enhancement of wetlands that go beyond the NRCS requirements
- A chance to participate in management or monitoring of specific projects
- Opportunities to use some of the more innovative restoration techniques
WREPs have a few different options, though there are restrictions based on location for Iowa (detailed below). There can be permanent easements, 30-year easements or 30-year contracts. Each type of easement offers different financial benefits and terms.
What are my options as an Iowa landowner?
In Iowa, your land may be eligible for an agricultural easement if you can answer “yes” to any of the following questions, as stated by the NRSC website:
- Do you own agricultural land and you want to make sure its value as agricultural land is secured permanently?
- Do you own property with wetlands on it that were altered for agricultural purposes but now want to learn more about ceasing that production and restoring the land to its wetland state for at least 30 years or permanently?
- Are you already participating in conservation efforts but want to take your environmental stewardship to the next level?
It should be noted that, in Iowa, almost all conservation easements are donated – although this is not the case in every state. According to iowalandoptions.org, a landowner may be able to receive a partial payment from federal programs, but these programs can require several years to complete and the landowner will have to make land value contributions.
But in Iowa, easement donors who enter into an agreement do receive income tax benefits.
Iowa landowners must also select a conservation agency or a nonprofit, preferably one whose vision for your property aligns with your own, to be the manager of the conservation easement.
As for wetland easement in Iowa, your land must not only provide value to waterfowl, but it also must be within a county that is in the Prairie Pothole Region of Iowa, which encompasses northwest Iowa counties.
How does Midwest Land Management incorporate sustainability and conservation?
Conservation efforts and responsible soil stewardship are always priorities for Midwest Land Management and how we serve our clients.
Our team works closely with clients to ensure that best management practices are used to protect against erosion, preserve fresh water and retain soil health so that a piece of land can remain profitable and sustainable for future generations of farmers.
That’s just one aspect of the farm management services Midwest Land Management provides. If you are interested in learning more about these services, please reach out to our team at (712) 262-3110 or send our office an email to discuss your farm’s plan and future goals.