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Farm Values

Montana is fortunate to have so many small farmers statewide

By Mike Jopek

The robins woke me up, again. The songbirds have been fluting outside our open window at 5 a.m. each morning.

Apparently it was time to make a fresh bistro of air-roasted Sumatran dark from Coffee Traders. The earthy tone is one of our favorites and dark roasting draws out the oils in the bean.

I’m occasionally reminded that expert tasters favor under roasted coffees, ones that taste grassy. But I’m no expert. I like what I like.

Last week, we drove to Plains to source some weed fabric from a Craigslist ad. It seemed a good value but a drive gave us a chance to relax a bit from our chaotic pre-summertime farm schedule. This time of year is full-bore work.

The landscape was springtime fresh along Highway 28. The price of diesel fluctuated from over $3 a gallon in the Flathead to $3.50 a gallon in Hot Springs. That’s not great. Farmers are paying way too much for fuel. This energy independence thing sure is expensive.

Turns out the couple in Plains, who owned the fabric remnants, recently sold their blueberry and nursery farm. They were looking to retire. But judging by the amount of peach trees that had recently been planted on their homestead, retirement looked like work.

It’s exciting to see so many small farms across Montana. The state says some 35,000 landowners enjoy over 50 million acres of farmland. That’s a productive property tax valuation of over $6 billion.

Montana forestland is also appraised at a productive value. We enjoy over 4 million acres of timberland, owned by 14,000 private landowners with a combined productive tax valuation of $690 million.

The Montana Department of Revenue sent out postcards to small farmers in our region. It seeks to assure that farmers are farming and meet the state classification for farmland, which is appraised with a productive land value versus the speculative free market value of residences.

State law says that owners of farmland less than 160 acres must apply for agricultural classification. Qualifying farmers must be able to produce at least $1,500 in gross annual income from the land. The feds say that a farm must be able to produce $1,000 annually.

Montana law says that “… horticultural crops that are raised, grown, or produced for commercial purposes” qualify as agricultural products.

More than two-thirds of the 50 million acres of farmland in Montana is classified as grazing land, which enjoyed the lowest productive value at $46 per acre in 2017. Specialty croplands, like the retiring blueberry farmer in Plains, would be appraised at 34 times the value of grazing land.

Specialty crops include fruit tree orchards, vineyards, cultivated Christmas trees, sod farms, nurseries, gardens, apiaries and poultry. It’s the highest productive level of continually cropped Montana farmland.

Small producers in northwest Montana who didn’t renew an AB-3 agriculture form may have had their farms reclassified as tract land by the state. That represents a big tax increase to legitimate small producers.

Luckily the state has an informal review process for farmers who call or fill out an AB-26 form in a timely manner. It’s a simple form that can quickly put a small producer back into the appropriate property tax classification. Hobbyist will not qualify.

In 2017 there were 654 informal reviews requested by farmers. All but seven were resolved with appeals possible to a county and state board.

Montana is fortunate to have so many small farmers statewide. We grow everything from apples to zucchini for local Montana eaters.

Every state in the union has some sort of productive valuation tax appraisal for farmland or timberland. Society values farmers and loggers and it is the policy of the people of Montana to keep them productive.