Has Development Occurred at the Expense of Indiana’s Prime Farmland?

Tanya J. Hall: Economic Research Analyst, Indiana Business Research Center, Kelley School of Business, Indiana University

rom 1950 to 2007, the in 2008. For an industry that only and moisture supply needed to proportion of Indiana acreage employs 4.5 percent of Hoosiers, the economically produce a sustained Fdevoted to farmland has output is quite impressive.4 high yield of crops. Therefore, decreased 24 percent (from 84.8 To give perspective on which prime farmland produces the percent to 64.4 percent); meanwhile counties are the leading producers highest yields with minimal inputs the population grew by 2.4 million, of various commodities, Figure of energy and economic resources, or 61 percent (see Figure 1).1 As 2 shows the top ten counties for resulting in the least damage to a large percentage of the loss of producing field corn, soybeans, the environment. The loss of prime farmland tends to occur at the wheat, hay, popcorn, vegetables, farmland to other uses (i.e., urban periphery of urban areas, intense , cut Christmas trees, cattle development) forces the producer to debates have occurred about the (beef and dairy), hogs, sheep, poultry use marginal lands, which typically effects of on Indiana’s (chickens and turkeys), and goats. As are more erodible, more prone to natural resources. For clarification, expected, some counties are “super- drought, less productive, and not urban sprawl is the inefficient land producers” and are ranked in the as easily cultivated for field use.5 In use pattern associated with urban top ten for numerous commodities. order to make marginal lands more growth and development,2 and is These include Elkhart County (a top productive, operators would need often characterized by low density ten producer for seven commodities), to apply more inputs such as water, development occurring outside Washington County (seven chemicals and fertilizers, tile (for of urban areas. Developers argue commodities), LaGrange County (six drainage), and other technologies, that they build what people want commodities), and Adams County which affects the operator’s according to market demands. (five commodities). bottom line and could impact the Indeed, development is spurred environment.6 by positive economic growth, Prime Farmland in Indiana In 1997, the United States had a which is desired in Indiana, but is The U.S. Department of Agriculture total of 331.9 million acres in prime this development occurring at the (USDA) defines prime farmland farmland, a decline of 13.6 percent expense of Indiana’s prime farmland? (Capability Class I and II) as land from 1977.7 In Indiana, 56.4 percent Additionally, what farmland best suited to , feed, forage, of our farmland, or 12.9 million acres, preservation policies does the state fiber, and oilseed crops. This land has was defined as prime farmland, have in place to protect our best the qualities, growing season, making Indiana one of the three farmland? This article will look at the state’s agricultural trends, the distribution of prime farmland in n Figure 1: Percentage of Indiana’s Acreage in Farms and Population, 1950 to 2007 Indiana, and projected urban growth 90% patterns to address these important 8 issues. 85% 7 Population (Millions) Importance of Agriculture 6 80% to Indiana 5 The Indiana agriculture industry 75% 4 is a large contributor to our state’s 3 economy at an estimated $25 billion 70% a year.3 Not only is Indiana ranked 2

Percent Acreage in Farms Acreage in Farms Percent Percent Acreage (Left Axis) in the top ten in sales volume for 65% corn, soybeans, poultry, hogs, as well Population (Right Axis) 1 as milk and other dairy products, 60% 0 the agriculture industry comprised 1950 1954 1959 1964 1969 1974 1978 1982 1987 1992 1997 2002 2007 roughly 17.6 percent of the state’s Notes: Differences in time intervals are due to the Census of Agriculture being taken every ten years prior to 1950. After that, the Census was taken every four or five years until 1982 where it now occurs every five years. exports with a value of $5.3 billion Source: IBRC, using USDA Census of Agriculture and U.S. Census Bureau data

Indiana Business Review, Spring 2010  1 n Figure 2: Top Ten Producing Counties of Agriculture Commodities Corn (bushels) Hay* (tons) Soybeans (bushels) Wheat (bushels) Beef Cows (head) 2009 2008 2009 2008 2010

Milk Cows* (head) Hogs (head) Chickens (layers, Lambs (head) Goats (head) 2010 2007 broilers, and pullets) 2007 2007 2007

Turkeys (head) Popcorn (pounds) Vegetables (acres) (farms) Christmas Trees* (farms) 2007 2007 2007 2007 2007

For detailed maps of where commodities are produced in Indiana, see the interactive version of this figure online at www.ibrc.indiana.edu/ibr

*Eleven counties are shaded due to a tie in production of the counties ranking tenth.

Sources: IBRC; Most data came from the Indiana Agricultural Statistics 2008-2009 and reflect 2008 data, except corn, soybeans and wheat which reflect 2009 data from the National Agricultural Statistics Service (NASS). Beef and milk cows as of inventory in January 2009 data also came from the Indiana Agricultural Statistics Office (NASS). Data for vegetables, fruits, and Christmas trees came from the 2007 Census of Agriculture and are provided in acres and number of farms due to the amount of non-disclosable data. All other animal data came from the 2007 Census of Agriculture Report.

2  Indiana University Kelley School of Business, Indiana Business Research Center states to have over 50 percent of its growth was Hamilton (880 percent) County lead the way, increasing farmland area classified as prime followed by Hendricks and Johnson its population density from 206.1 farmland, behind Iowa (66.3 percent) counties (472 percent and 440 percent, people per square mile in 1980 to and Illinois (58.7 percent).8 Figure respectively), as shown in Figure 5. 701.8 people per square mile in 2009. 3 shows that the counties with total Due to the surge in population, In conjunction with the population land area classified as over 80 percent the population density has also growth, counties also saw an increase prime farmland are mostly clustered increased dramatically (see Table 1). in housing units and other developed in north-central Indiana up to the Within the forty-four county region, parcels of land devoted to businesses northeastern corridor of the state. those counties in regions 5, 8, and 9 and public infrastructure. The state’s Unfortunately, as noted by have grown between 16 to 38 percent official population estimates for the researcher Arthur Nelson, most of from 1980 to 2009, yet doubled or years 2005 to 2040 produced by the the United States’ prime farmland nearly doubled their population Indiana Business Research Center is located within the suburban and density since 1950. Again, Hamilton show that Region 5 will continue to exurban counties of metropolitan 9 areas. Therefore, the land that n Figure 3: Percentage of County Land Area Classified as Prime Farmland is most suitable for agricultural production tends to be equally St. Joseph 90% or more LaGrange Steuben desirable for development.10 This was Elkhart LaPorte 70% to 89.9% seen between 1992 and 1997 when Porter Indiana saw 144,000 acres—86.3 Lake Noble DeKalb 50% to 69.9% Marshall percent of that classified as prime Starke 30.1% to 49.9% farmland—converted to developed Whitley Kosciusko 30% or less 11 Allen uses. Regrettably, these lands that Jasper Pulaski Fulton are developed are likely to never be

12 Newton reconverted to agricultural uses. White

Cass Wabash Wells Huntington Adams Past, Current, and Projected Benton Carroll Grant Growth in Central Indiana Howard Black- ford Jay For the remainder of the article, focus Warren Clinton Tipton will be directed to the central Indiana Tippecanoe region of forty-four counties (see Delaware Randolph

Figure 4) that are dispersed within Boone Hamilton Madison Fountain six Economic Growth Regions (EGRs) Henry Montgomery Wayne as defined by the Department of Hancock Parke Hendricks Marion Workforce Development (DWD). Of Fayette

Vermillion Putnam these counties, 23 (52.3 percent) have Rush Union Shelby 80 percent or more of their land area Morgan Johnson Vigo Franklin classified as prime farmland. Twelve Clay Decatur counties have between 60 and 79.9 Owen percent of their land area as prime Monroe Brown Sullivan Ripley farmland, with the remaining nine Bartholomew Dearborn Greene Jennings Ohio counties at less than 60 percent. Jackson Lawrence Between 1950 and 2009, it is Jefferson Switzerland estimated that Indiana’s total Scott Martin population grew 63 percent and the Knox Daviess Orange forty-four county region’s growth Washington Clark Pike rate was 72 percent. However, the Dubois Floyd counties surrounding Indianapolis Gibson Crawford (Boone, Hendricks, Morgan, Marion, Warrick Vander- Perry Harrison Johnson, Shelby, Hancock, and Posey burgh Madison) led the regions with a Spencer growth rate of 108 percent. The county with the most explosive Note: These percentages are based on total land area. Source: IBRC, using STATSGO data (1994 National Cooperative Soil Survey, USDA)

Indiana Business Review, Spring 2010  3 grow at a fast clip of 31.3 percent (see percent and 54 percent growth Center for Urban Policy and the Figure 6). Hamilton and Hendricks between 2005 and 2040. Environment at Indiana University– counties will continue to dominate The maps in Figure 7 display Purdue University Indianapolis the population growth with 84 today’s and projected created the luci2 Urban Simulation land use change through 2040. The Model that projects development

n Figure 4: Central Indiana Region* n Table 1: Population Density, 1980 and 2009

White Area 1980 2009 Cass Miami Breakdown of 44-County Region Carroll Benton Average 155.8 189.5 Howard Region 4 Region 5 383.5 528.0 Warren Tipton Region 6 134.2 119.5 Tippecanoe Clinton Region 8 88.1 107.9 Delaware Randolph

Madison Region 9 89.1 102.9 Boone Hamilton Fountain Region 6 Region 4 96.3 101.4 Montgomery Marion Hancock Henry Hendricks Wayne Region 7 94.0 93.6 Parke Putnam Fayette Vermillion Region 5 Breakdown of Region 5 Rush Union Region 7 Marion 1,931.2 2,248.3 Shelby Johnson Morgan Hamilton 206.1 701.8 Clay Vigo Decatur Johnson 241.2 441.9 Owen Monroe Brown Hendricks 170.9 344.3

Sullivan Region 8 BartholomewJennings Madison 308.2 290.7 Greene Region 9 Hancock 143.5 223.2 *This region consists of forty-four Lawrence Jackson counties dispersed among six Morgan 127.9 174.4 Economic Growth Regions (EGRs). Note that EGRs 6, 8, and 9 contain Boone 83.8 133.1 counties that are not included in this forty-four county region. All analysis Shelby 96.7 107.8 Orange is limited to the counties shown. Source: IBRC Source: IBRC, using U.S. Census Bureau data

n Figure 5: Population Growth Trends, 1950 to 2009

Breakdown Within 44-County Region Breakdown Within Region 5

Region 7 Madison Shelby Region 6 Marion Region 4 Boone Region 9 Morgan

Region 8 Hancock Johnson Region 5 Hendricks Total Hamilton 0% 20% 40% 60% 80% 100% 120% 0% 200% 400% 600% 800% 1000% Source: IBRC, using U.S. Census Bureau data

4  Indiana University Kelley School of Business, Indiana Business Research Center scenarios in the central Indiana development will also continue to 2007 average farm size of 242 acres), region, using 2000 data as the base grow and expand. This expansion for a total loss of 1,116 farms or more. model.13 The maps for 2010 and of urban areas equates to nearly Unfortunately, roughly 68 percent 2040 utilize the IBRC population 500,000 acres being converted to of this farmland loss will be in areas projection data to project the urban urban lands between 2000 and 2040. with high amounts of prime farmland growth areas. Comparing these maps, Of this figure, slightly more than (greater than 80 percent), which one can see that the Indianapolis 270,000 agricultural land acres would makes the loss of farmland even more metropolitan area is projected to be converted (54.1 percent), which significant. spread further into the counties means an average loss of 6,752 acres surrounding Marion County. per year. This would equate to a loss Outlying areas with prior urban of at least 28 farms a year (using the n Figure 6: Projected Population Growth, 2005 to 2040

Breakdown Within 44-County Region Breakdown Within Region 5

Region 6 Madison Shelby Region 7 Morgan Region 4 Marion Region 8 Johnson

Region 9 Hancock Boone Region 5 Hendricks Total Hamilton -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% -5% 5% 15% 25% 35% 45% 55% 65% 75% Source: IBRC n Figure 7: Land Classified as Urban in Central Indiana under Current Trends, 2010 and 2040

2010 Scenario 2040 Current Trends Scenario (No Restrictions)

Percent Urban 0% to 10% 10% to 20% 20% to 30% 30% to 50% 50% to 70% 70% to 90% 90% to 100%

Source: IBRC, using Center for Urban Policy and the Environment data

Indiana Business Review, Spring 2010  5 Smart Growth and Indiana growth and the ineffectiveness of seventy-nine of the state’s ninety- Farmland Preservation Policies local planning to protect important two counties have different planning Since the mid-1990s, “smart growth” landscapes and natural resources.15 and ordinances, several of has become a popular term for how Indiana currently has a Nature which may be dated. The remaining to combat urban sprawl and compact Conservatory and twenty-five thirteen counties have no traditional development while preserving rural different land trusts that purchase regulations in place. The ILRC lands. Unfortunately, smart growth land and conservation easements looks at agricultural zoning from is difficult to define due to its various to buffer habitats they don’t want an economic and fiscal standpoint potential elements, which can include developed, including some farmland. that shows that it is optimal to keep adoption of fiscal resource sharing While helpful, these programs still farmland (especially prime farmland) amongst localities; promotion of do not entirely address the issue in agricultural production and why compact, mixed-used development; regarding the loss of prime farmland it’s important to keep agriculture and preservation of open space. The near metropolitan areas. in the community development opposite of smart growth can be Presently, Indiana does not have plan. While this approach may be more broadly defined as sprawling, statewide farmland preservation considered non-traditional compared haphazard, and poorly planned policies in place to address the rapid to other states’ farmland preservation development in the outer suburbs growth of urban and low density policies, planning and zoning are and exurbs that also dilute the development onto prime farmland. critical cornerstones that need to be economic and social vitality of cities However, Indiana does have the in place before the state (or county) and older suburbs.14 Indiana Land Resources Council pursues conservation policies.16 The movement to preserve (ILRC) that provides assistance to Critics of land preservation policies privately held land began in the 1980s counties regarding planning and argue that the land market should after the federal government’s relaxed zoning ordinances. A recent initiative dictate the rate of development; environmental laws and reduced that the ILRC has been working on however, the land market has federal land acquisition programs, is agricultural zoning that assists repeatedly failed to create satisfactory spurring the increase in private communities with implementing land use patterns. Instead, since nonprofit land trusts. The rise in land regulations that help strike a land markets are influenced by trusts also grew due to frustrations balance between competing land public infrastructure investments with communities’ rapid pace of uses. This is a critical initiative as in roads, schools, and sewer

n Figure 8: Impact of Development Restrictions on Land Classified as Urban, 2040

2040 Current Trends Scenario (No Restrictions) 2040 Land Preservation Scenario (With Restrictions)

Percent Urban 0% to 10% 10% to 20% 20% to 30% 30% to 50% 50% to 70% 70% to 90% 90% to 100%

Source: IBRC, using Center for Urban Policy and the Environment data

6  Indiana University Kelley School of Business, Indiana Business Research Center population data is derived from the 1950 and water facilities, and by local Hendricks, Hancock, Boone, and Census and population estimates for July governments whose primary interest Shelby counties decreases, albeit 1, 2007. National Resources Inventory data is to expand the property tax base, slightly. would have been used if the data were more recent than 1997. It is believed that the NRI the land markets have encouraged analysis is more accurate than Census data; residential and commercial sprawl. Conclusion for more information, see note 12. A local government’s interest in Indiana is fortunate to have 2. R. K. Olson and T. A. Lyson, Under the Blade: The Conversion of Agricultural Landscapes expanding the property tax base slightly more than 56 percent of (Boulder, CO: Westview Press, 1999). over land preservation policies is all its farmland classified as prime 3. See www.in.gov/isda/files/AEDI_Phase_II_ often misguided as numerous cost- farmland, a contributing factor to Exec_Summ.pdf. 4. For more details about agriculture’s of-community-services studies done the state’s abundant agricultural contribution to the state’s economy, please by the American Farmland Trust production. In fact, many individuals see Tanya Hall, “The Importance of Indiana show that residential development have the mindset that there is not Agriculture,” InContext, May-June 2010, www.incontext.indiana.edu/2010/may-june/ demands more in public services a shortage of farmland, thus no article3.asp. than it generates in property taxes, need to be concerned about the 5. Definition obtained from the Indiana whereas farmland generates more loss of farmland to development. Soil Surveys (division of USDA’s Soil Conservation Service), accessed at http:// in property taxes than it demands in This mindset could be reinforced .usda.gov/survey/online_surveys/ services.17 This fall, Indiana voters by data showing that Indiana has indiana/index.html. will have the opportunity to reinforce continued to increase its agricultural 6. A. Altshuler, The Urban Transportation System: Policies and Policy Innovation (Cambridge, this paradigm if property taxes production while losing farmland. MA: Joint Center for Urban Studies, 1979). are capped at 1 percent, 2 percent, Indeed, the agriculture industry 7. Data came from the National Resources and 3 percent for residential, rental has adapted to the loss of farmland Conservation Service (NRCS), Natural Resource Inventory 1997 and D. R. Vining, K. and farmland, and other business through the growth of small (one to Bieri, and A. Strauss, “Urban encroachment establishments, respectively. nine acres) and large (greater than on prime agricultural land in the United The luci2 model allows for policy 2,000 acres) farms between 1987 States,” International Regional Science Review 2, no. 2. changes such as the development and 2007 (78.5 and 80.2 percent, 8. Data came from NRCS, Natural Resource of new interstates and restrictions respectively). However, some of Inventory 1997 and 1990 Census (for land on sensitive lands. To visualize the state’s most desirable land near area). 9. A. Nelson, “Economic Critique of U.S. Prime how development would change metropolitan areas is in a tug of war Farmland Preservation Policies,” Journal of in central Indiana if restrictions between agricultural production and Rural Studies 6, no. 2 (1990): 119-142. were imposed on agricultural and development. The state’s farmland 10. B. Solomon, “Farmland Protection: A Case of Quality Not Quantity,” Land Use Policy sensitive land, another map was is a limited natural resource and, (October 1984): 357–66. created that imposed development once converted to development, 11. Farmland Information Center on Indiana restrictions on agricultural land, is unlikely to be reconverted to Statistics derived from the National Resources Inventory (NRCS). wetlands, and forests (see Figure agricultural use in the future. 12. A. Thompson and L. Prokopy, “Tracking 8). The following conditions were Therefore, it is necessary to carefully Urban Sprawl: Using Spatial Data to Inform applied that restricted development guide the development around Farmland Preservation Policy,” Land Use Policy 26 (2009): 194–202. on: 1) wetlands greater than 20 acres; metropolitan areas to preserve prime 13. The luci2 model can be found at http://luci. 2) forested areas greater than 20 farmland, while recognizing that urbancenter.iupui.edu/default.asp. acres; and 3) areas with at least 50 the agricultural industry is a large 14. T. Daniels and M. Lapping, “Land Preservation: An Essential Ingredient in percent of land devoted to agriculture contributor to our state’s economy. Smart Growth,” Journal of Planning Literature production (would keep 75 percent of How this challenge is addressed 19 (2005): 316–329. that area in agricultural production). does not have a direct solution, 15. See note 14. 16. Information obtained from Executive With this protection, slightly more but the ILRC is approaching this Director Sarah Simpson via interview. More than six million acres are restricted challenge through agricultural information about ILRC and agricultural from development with the majority zoning, which will help communities zoning can be found at www.in.gov/isda/2339.htm. in agricultural land (75.4 percent). better protect and understand the 17. See note 14. As expected, development on value that agricultural land brings to agricultural lands will still occur, just Indiana’s state and local economies not as intensely as in the previous by managing urban development in a current trends scenario. The map smart way. shows that intense development is kept closer to the core of urban Endnotes areas, and the percentage of acres 1. Farmland data reflect the 1950 and 2007 Census of Agriculture reports and the in urbanized areas in Hamilton,

Indiana Business Review, Spring 2010  7