Purchasing farmland is a bit different than your ordinary home buying experience. There are more factors to consider; between local zoning regulations, USDA requirements, and locational considerations for optimal farming, you could be left with a cow-sized question mark over your head when figuring out where to even start in the process.
We’re here to help. Here are five key considerations to keep in the forefront of your mind as you glide through the process of purchasing Alabama farmland.
It takes a lot more than seeds and water to get started on a farm. Like any business, there is significant overhead, but it is quite substantial at the outset.
Make sure you have done your research so you can adequately account for all your upcoming expenses in a healthy and pre planned way as possible, so you don't end up bankrupt before the end of the first year. And just for reference, pasture land average value per acre was $2,300 in Alabama in 2018.
Agricultural operations can span many acres, which would make property taxes on farmland quite costly if it were taxed at its “highest and best use.” If left unchecked, property taxes on farmland could be far too high for farms to be economically viable.
To address this problem and make owning farmland more affordable, governments have policies to lower the property taxes of farmland and other open spaces. Differential assessment and current use programs are intended to help farmers stay in business by reducing their property taxes.
This in turn protects farmland by easing the financial pressures that force some farmers to sell their land for development.
Financial Assistance Options for Alabama Farmers
The primary mission at Alabama Farm Service Agency (FSA) is to assist Alabama’s farmers and ranchers to secure the greatest possible benefit from programs administered by FSA, such as farm loans, commodity price support, disaster relief, conservation, and other available resources.
2. Where to Purchase Farm Land
As with any property purchase, it’s important to buy a property that has a good location. When people are looking for farms, they are often looking for peace and quiet. You may want to avoid farms near busy towns or highways for resale purposes. On the other hand, farms close to busy highways and cities could resell as commercial property down the line, which would actually increase the value.
Alabama farmers looking to purchase new land should start by reviewing applicable zoning laws in the area, and investigating whether any environmental permits will be required under Alabama and federal environmental laws.
An additional zoning/siting concern arises when farmland intersects urban areas — a common
situation for many direct farm operations due to the proximity to potential customers. As towns
or other urban areas expand, counties or cities may change the land’s zoning classifications.
3. Consider a Water Source
Another ideal feature of any farm is a water source, from either a running stream or a large pond or lake. The water source can help you with farm animals, or in case your well water is unavailable.
Irrigation in Alabama is relatively light; Alabama state law restricts landowners’ access to water to include only the water that is either under or adjacent to their land, a mandate also known as the common-law riparian doctrine.
The Clean Water Act requires Alabama landowners to obtain permits from the Army Corp of
Engineers (the Corps) to discharge dredge or fill material into waters of the United States. This means a farm may need a permit to do construction or bulldozing in wetlands.
These permits, known as Section 404 permits, are only an issue for new farms. The law has an exception for normal farming and ranching activities that are part of an established, ongoing operation.
4. Identify Your Main Purpose of Owning Land
It’s important to think about your purposes for moving to a farm so you can narrow down your real estate search beforehand. If you know what you’re doing, there’s decent money to be made in farming provided you pick the right income source.
If you’re looking to raise cattle, there are a few regulations you should be aware of. The USDA's Food Safety and Inspection Service (FSIS) oversees meat and poultry processing facilities in Alabama. The Alabama Department of Agriculture and Industries (ADAI) has authority to provide state inspections in accordance with federal standards.
There are some facilities in Alabama that are only state-inspected, so it is important to determine whether the product will be shipped across state lines at any point. If it will be, the slaughter facility must be federally inspected.
All animals at USDA slaughterhouses must undergo pre- and post-slaughter inspections for
health and soundness. If the animal is fit for human consumption, the inspector places an “inspected and passed” stamp on the meat, using food grade ink. Mandatory USDA inspections are free of charge, but producers must pay for grading services.
5. Be Ready to Work Hard
The part that is often overlooked though is the 70- to 90-hour work week that constitutes lots of physical labor and persistence in the face of unforeseen challenges, such as the ever-present reminder that nature and the weather do not bend to your will.
If you are considering purchasing an established farm, you should work with an experienced, local real estate agent for assistance and support throughout the process. Clever can help pair you with an expert who understands all there is to know about buying a farm in Alabama.