Catalyse

Use fiscal and financial incentives to foster land stewardship

Fund and incentivise support to the new generations

Organise other support policies to help agriculture deliver public goods

Complementarily to direct intervention in land markets, local authorities can leverage financial instruments such as taxation, subsidies, or local budgets to catalyse local agricultural dynamics. Depending on the degree of freedom to set local rules in the matter, these indirect interventions can:

• Incentivise better land use and land stewardship

• Support new generations in accessing land

• Help local agriculture deliver public goods more efficiently

Encouraging better land use and land stewardship through tax and incentives

Curtailing bad land uses through fiscal instruments can entail, among other possibilities:

• taxing land development;

• taxing more heavily land transfers that are above market prices;

• increasing property taxes for abandoned farmland.

While incentivising better uses may be done through:

• Tax rebates for small farms (e.g. in Spain, the municipality and Spanish government can set tax rebates on the Real Estate Tax for farmland for personal and family farming).

• Real estate tax exemptions for owners who agree to lease their land to farmers. For instance, the town of Claira in France led a programme to fight land abandonment. The municipal council voted to exempt owners from paying the communal share of the property tax on farmland made available to growers for 5 years.

• Payments for the delivery of public services. While this is a vast area of action that goes beyond land intervention, payments can be directed to incentivising specific care for the land or applied with surface criteria (increased for small farms).

Supporting generational renewal in agriculture

Supporting land transfer processes to new generations through fiscal and financial tools can entail:

• Exemptions of succession taxes for family farm transfers. For instance, the Catalan government facilitates transfers through succession and donations tax exemptions.

• Subsidising farm partnerships or internships prefigurating succession (paying for internship stipends of new farmers, allocating more investment subsidies to farm partnerships, etc.).

• Financing counselling for retiring farmers and land restructuring related to succession (e.g. diversification of farms, new investments).

While transfers that do not benefit new farmers can be discouraged through:

• taxing operations that lead to land concentration (taxes above a specific area of farmland held);

• applying differentiated support to large farms (e.g. lower investment subsidies).

--> Learn about other ways for local authorities to support farm transfers through intermediation between retiring farmers and new entrants in the “Facilitating local land dynamics” section.

Good idea! Avoid indiscriminate tax measures

A general lowering or exemption of succession or real estate taxes on farmland can be counter-productive. If applied in an indiscriminate way, these measures can incentivise private purchases by non-farmers, who invest in land as capital to transfer to children. If possible, tax arrangements should be tied to the continuation of the farming activity.

Help local agriculture deliver public goods more efficiently

Providing a favourable environment for agroecological farmers and minimising the withdrawal from farming also entails acting on dimensions that precede access to land, such as farmer training, and that follow farm set-up (e.g. developing local markets, life-long training and other measures to ensure small farms remain viable in the long term).

Prior to farm access, local authorities can for instance:

• finance infrastructure and services to restore the land to viable farming (e.g. creating an access path, providing access to water, draining land, paying a contractor to remove bush and scrubs, etc.);

• subsidise agroecological education and training programmes for farmers;

• fund or provide public land for the setting up of farm incubator;

• facilitate access to housing for new entrants.

To help maintain dynamic, locally-oriented, and sustainable agriculture local authorities may:

1. Fund the development of short supply chains including:

• financing infrastructure for food processing (e.g. collective food labs that farmers can rent punctually, post-harvest season);

• funding the creation of local retailing outlets, backing the development of a local brand and other farm-to-fork projects;

• make strategic use of public procurement (procuring food from local farms).

1. Back farm diversification and other strategies to improve the viability of farms in the long term

• fund agrotourism programmes;

• support the maintenance of ecological infrastructures, healthy soils, etc.

• help farmers receive life-long training in diverse areas (business, diversification, etc.).

If we want a multifunctional farming structure to produce local public goods, we will need decentralised processing infrastructure like regional slaughter houses or dairies. Since these are not provided by the free market, which tends to centralisation, they must be supported politically. Therefore, a renaissance of regional and local agriculture policies is a logical consequence. The reallocation of competencies to the local level is a primary issue” - Frieder Thomas, Managing director, AgrarBündnis e.V. Konstanz, Germany

Good idea! Agriculture and nature financial synergies

As agroecological farming contributes to major environmental objectives, local authorities may support it as part of their environmental schemes. In this way, they can draw from environmental regulations and policy instruments – which are often more developed than those for farmland and agriculture – as well as from environmental budgets, which may have more dedicated resources.

Relevant example. Associating land protection and local development in a municipal agricultural programme

The Agricultural Programme of the City of Hannover

The Agricultural Programme of the City of Hannover

The German city of Hanover created its own Agricultural Programme as part of the city’s political action plan. It was originally created to coordinate spatial planning and development with maintaining economically viable farms, supporting the conversion to organic agriculture, establishing regional marketing of food, and fostering nature and landscape conservation. The plan has been successfully implemented and yielding results since its implementation in 1994, having undergone two revisions in 2001 and 2017. A dedicated staff has ensured that the programme was implemented and developed further ever since its initiation. The revision of the plan resulted in an increased scope of the policy, going beyond just agriculture and horticulture to all kinds of food production and land use in the city.

A set of measures with different priority levels have been derived from the plan and its objectives, the ones with more priority being:

1. Reducing the use of agricultural land for construction and preserving it altogether where there are particularly fertile soils.

2. Promotion of “Land care through extensive agricultural use”

3. Publicly owned land is preferentially leased to organic farms.

4. Procurement of regional and organic products for city-run institutions (day-care centres, canteens, recreation centres, etc.) and events

5. Educational programmes at farms and especially “Open farms” that include DIY elements and direct marketing

6. Self-harvesting gardens offered by farms as a service.

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