POSSIBILITIES OF SHELTERBELT PLANTING IN THE PLAINS REGION

CONTENTS

Establishment of tenure
Valuation
    Crop land
    Noncultivable pasture land
    Woodland and farmstead areas
    Rental values

The lands of the shelterbelt zone, approximately 115,000 square miles in extent, may be classified, broadly, as follows:

1. Sandy, "light" soils, and fine-textured soils in areas of adequate rainfall, favorable for tree growth, 48 percent, or 54,800 square miles. The character and use of these soils is such as to justify the planting of typical field shelterbelts.

2. Fine-textured, "hard" soils, relatively unfavorable for tree growth, with only a limited supply of available moisture, 32 percent, or 36,700 square miles. The planting of field shelterbelts on such lands would be more expensive, the hazard greater, and the possible benefits less than on coarser, lighter soils.

3. Coarse-textured soils, relatively unfavorable for tree growth, with only a limited capacity for holding moisture, less than 1 percent, or 800 square miles.

4. Rough land, 11 percent, or 13,000 square miles. A very considerable proportion of these lands are suitable for planting in solid bodies, principally in gullies and along the breaks of stream valleys.

5. Sand hills, 4 percent, or 4,600 square miles. These areas, which include the sand hills of Nebraska, lend themselves generally to forest planting in solid bodies. They are not suitable for cultivation and in their present condition are more valuable for grazing. The total acreage which ultimately should be planted will depend upon the extent to which the work may be accomplished with labor employed primarily for relief purposes over a period of years, and upon the demonstrated value of existing plantations.

6. Alkali lands, "buffalo wallows," and other lands not suited to forest planting, 4 percent, or 4,800 square miles.

Lands in class 2, the hardsoil group, present certain variations in degree of difficulty. On such lands the planting policy may be modified in accordance with the conditions found. In many instances planting will be practical only if confined to the margins of farmsteads, where the trees may be given the intensive care essential to their successful establishment, and where their value will be largely social in character. Interspersed among the soils making up this group, however, are many small areas—too small to be mapped separately—on which very favorable soil conditions exist. Where such areas are found, typical field shelterbelts can be planted.

Lands in class 6 should be wholly excluded from consideration because of the insuperable obstacles to successful planting.

Lands in classes 1, 3, and 4 are those to which a Federal policy of management and control will be directly applicable, and to which the following discussion is specifically related.

ESTABLISHMENT OF TENURE

An extensive and expensive program of afforestation by the Federal Government can be justified only by a reasonable presumption of permanency and long-enduring public benefit. Certainty and stability of land tenure and use throughout the full period required for the realization of the benefits and objectives of the forest-planting work consequently is an indispensable requirement. A project which requires a half century for the full realization of its public benefits cannot be predicated upon rights of land occupancy subject to termination or drastic modification at the end of a decade.

Subject possibly to the procurement of additional legal authority, four general methods of establishing certain and stable land tenure are available, viz:

(1) Leases for reasonable minimum periods, containing a specific contractual stipulation for extensions of the lease upon request of the United States Government and payment of the stipulated rentals, and also a specific contractual stipulation that at any time within the lease period or extension thereof the Government shall have the right to purchase the described lands or specified rights therein at a certain stipulated price per acre or other unit of area.

(2) Purchases of easements, under which the right of the Government to occupy the described lands for forest purposes shall be dominant over any and all other rights of occupancy, but with a provision for reversion or termination of easement if the lands are not so occupied by the Government during a certain prescribed minimum period, and for continued use by the holder of the fee or his grantees until such time as the Government initiates active occupancy of the lands.

(3) Donations of lands in fee by the owners thereof for certain specifically defined forms of Federal use and management.

(4) Purchases of lands in fee simple for permanent Federal ownership and management.

In the case of leased lands the Government may at any time during the lease period or extension thereof determine whether the success of the plantation and the interest of the owner of the fee in its perpetuation and the probability of continued interest by successors of the current owner offer adequate promise that the established forest will be permanently maintained and properly managed. In such event, should it then appear to be in the public interest, upon execution by the landowner of a cooperative agreement for such maintenance and management of the forest, the Government may waive its rights of extension or purchase of the lands, thus releasing them to the owner thereof.

In the case of lands subject to an easement or right of use acquired by purchase, the Government upon determination that the interest of the owner of the fee, or his successors, in the perpetuation of the forest offers adequate promise that the established forest will be permanently maintained and properly managed, and upon the execution of a cooperative agreement to that effect by the owner of the fee, may relinquish its easement or right of use in the lands, should such action appear to be in the public interest.

In the case of donated lands, the reasonable presumption is that the donor was motivated by the expectation and desire that the lands should remain in the permanent ownership of the United States and that the Government would maintain upon them certain conditions of forest growth and management. Where that is the case, permanent Federal ownership would be dictated. When the donor so desires, however, deeds of donation properly may include a clause providing for the reversion of the lands to the donor or his successors, if they are not used by the Government for forest purposes within a certain minimum period of time, as, for example, 10 years, or 20 years.

Certain landowners, while perhaps willing to sell marginal strips of their properties to the Government for forest purposes, may be deterred from so doing by the fear that if the shelterbelt program were modified or abandoned the Government might dispose of the land to persons who would use it for purposes incompatible with the best use of the vendor's remaining lands. Such a situation might be met by a provision that if the Government decided to restore the land to private ownership the vendor or his successors in interest would have a preference or prior right to purchase or enter the lands, subject to the conditions then prescribed by the Government; but existing law provides no authority for future commitments of such character, and it is improbable that deed of conveyance containing such a stipulation would be acceptable.

VALUATION

Land valuation is required as a basis for acquisition of lands for the Plains shelterbelt project. For field and farmstead shelterbelts it will be necessary to acquire varying degrees of control over a large number of small parcels. For other purposes included in the program land will be acquired in relatively large units. Each parcel will require individual bargaining, and negotiators must be prepared to bargain for the land with a definite knowledge of its worth and without the necessity of making a detailed and costly individual appraisal of each small tract.

CROP LAND

Various methods of evaluation for crop land have been considered and weighed in relation to conditions obtaining in the shelterbelt zone and the objectives of the shelterbelt project. If the true capital value of such land is to be obtained, the net income must be determined; and satisfactory cost data from which net income can be calculated are seldom available for small-farm operations. Evaluation on the basis of prices paid for land in the past is also unsatisfactory, because relatively few sales contracts show the prices actually paid; moreover, such contracts may be based on speculative prices that reflect conditions existent only at the time of the sale. The price paid in many such transactions is based on physical and economic relationships between individual tracts of land, or personal relationships between the parties at interest.

In short, the intrinsic worth of agricultural land, as distinguished from ordinary appraisal, must be measured by its productivity, and a method is required that will develop bargaining estimates that are related to productivity. If high values of land are closely associated with high productivity and low values with low productivity, it may be concluded that definitely appraised values are accurate in proportion as they reflect that relationship. It is realized, however, that no scheme of valuation will permit of a definite knowledge at any given time of all the factors affecting the value of the land. The private investor can only pay a price per acre for land, the average income from which may be expected, in a given period of years, to protect his investment and provide for a reasonable standard of living. The Federal Government should use a comparable basis in valuing land for the Plains shelterbelt project.

Average cash rent would appear to be the best measure of the productivity value of land. Data as to cash rentals are, however, extremely meager, since the common practice is to rent on a crop-share basis. Since cash rents cannot in most cases be correlated with values, the problem is one of correlation of the factors that produce rents, viz, value-productivity factors.

Although it is impossible to determine all productivity factors for land valuation on this project, the productivity method has been adopted since it correlates the average appraised value per acre with selected productivity factors which are both significant and determinable.

ALLOTMENT CONTROL CONTRACTS

As a result of the allotment control program of the Agricultural Adjustment Administration for corn-hog, wheat, and cotton production, detailed information as to the classification and productivity of land is obtainable for a large majority of the farms in the shelterbelt zone. These data are checked by local committees familiar with the agricultural economy of the locality. Comprehensive abstracts of this information for use in the shelterbelt project have been compiled on special forums.

The Federal farm-loan banks have appraised a vast number of farms for the purpose of granting loans. They determine the general level of land values in a community as a starting point, and by comparing each tract to be appraised with this basic determination of value arrive at the appraised worth of each farm.

In addition they determine the probable future in come, based upon productivity and other factors, so as to assure themselves that the borrower will be able to retire the loan in the period for which it is granted. Basically, productivity and value are related to the so-called "100-percent index" parity for the period 1909-14. The final appraisal therefore is a fair value based upon reasonable expectation that the loan will be repaid. Abstracts of Federal farm-loan bank loan data, referring so far as possible to farms upon which classification and productivity data are also available, are used in determining the true indicative worth of the individual farms and in establishing a normal per-acre value (hereafter called "appraised value") for comparable groups of farm lands. (The above relates entirely to the Federal farm-loan bank loan and not to the so-called "Commissioner loan" which is the result of specific legislation to relieve farm distress.)

DEVELOPMENT OF METHOD

Before correlating value-productivity factors with the appraised values, it was necessary to segregate the land areas into zones within which the majority of land areas reflected a similarity of conditions. For this purpose, as well as to secure a more complete evaluation of productivity factors, vast amounts of miscellaneous data were obtained from the 1930 census reports, agricultural statisticians' reports over a period of years, State publications of specific studies, soil classifications by the Bureau of Chemistry and Soils and cooperating agencies, and other authoritative sources. These provided dependable information on noncultivable land, average yields of crops over any desired period of years, soils and agricultural economy throughout the region, including small-grain farming, corn growing, livestock and range activity, and other forms of management all of which information affected the establishment both of zones of value and of the value-productivity factors within zones as considered in final correlation.

With the aid of these data a practical zoning system has been set up by which lands are segregated in a numbered series within each State according to the principal elemental or physical factors which affect their value. The smallest subdivision considered in zoning is one county, although it is realized that the exact limits of a zone will not coincide with county lines and will have to be more closely delineated by examination on the ground as land is selected for planting.

With the zonal classification of a given body of land determined, it becomes possible to apply correlation formulas to the three factors that are sufficiently comprehensive and are pertinent to the problem of establishing intrinsic crop-land values for Government-acquisition purposes. These factors are appraised value, percentage of noncultivable land, and average yield.

Careful investigation of several formulas of correlation has led to the adoption of those given in the publication Correlation and Machine Calculation, by George W. Snedecor, of Iowa State College, and Henry A. Wallace, now Secretary of Agriculture. Land values thus determined by correlation of the essential factors have been subjected to comparison with known local data, such as bona fide sales, assessed valuation, census data, and lease-rental values. The results indicate that a satisfactory bargaining basis can be obtained through the use of these methods. The correlation coefficient as developed by zones is highly significant, and the limit of error of the correlation is suitable for the establishment of ranges in bargaining value.

APPLICATION OF METHOD

Land will be acquired through negotiation between the landowner and a representative of the United States Government. The representative will determine for each farm on which land is to be devoted to shelterbelt planting the average productivity in terms of the major crop and the average percentage of the farm in noncultivable land. He will do this by reference to the record of the allotment control contracts in the office of the county agricultural agent and by examination of the farm. To the productivity, in terms of bushels per acre of the major crop, he will apply a certain factor which pertains to the valuation zone in which the farm is situated; to the percentage of noncultivable land he will apply a certain other factor for that zone. The products he will then combine with a constant factor related to the appraised value for lands in that particular zone in order to arrive at a per-acre valuation of the tract in question. Each negotiator will be furnished with the factors, including the bargaining range, adopted for each zone.

The indicated value of the tract will be that determined by the method described above, modified by items of value pertaining specifically to the tract, such as fences, irrigation improvements, erosion damage, noxious weeds, and, on cultivable pasture land the cost of tillage. Values so determined and agreed upon will be used in outright purchases and will be stipulated in options of purchase included in leases.

NONCULTIVABLE PASTURE LAND

The Forest Service has already developed a system of evaluating range lands in the national forests that is applicable to noncultivable pasture land in the shelterbelt area. The unit of evaluation is the forage acre, which represents an ideal acre of pasture land fully stocked with palatable forage. The production value of any given tract can be expressed in terms of forage acres. M. L. Wilson, now Assistant Secretary of Agriculture, developed a similar system in which carrying capacity is expressed in terms of the number of livestock of a given class that a section of land would support for a given period, and the carrying capacity is related to the production of meat at any given price per pound. A correlation of the two systems affords a satisfactory basis for either purchase or lease of the land.

The land of higher value, the so-called "hard-soil" type, which is devoted to grazing, but which is potentially cultivable crop land may be valued as such, with deductions for the cost of cultivation necessary to make it comparable to producing crop lands.

WOODLAND AND FARMSTEAD AREAS

There will be no occasion to acquire woodland or farmstead areas in connection with the Plains shelterbelt project, except as they may be included in larger areas to be purchased as units of land management. In such instances the acreage in woodland and farmstead areas will not be given separate consideration as such, but will be given a value based on its potential productive capacity or related by comparison to the value of the unit to which it belongs.

RENTAL VALUES

Although, as already stated, the general practice with regard to farm rentals in the shelterbelt zone is to lease land on a crop-share basis, somewhat extensive data have been obtained from investigation of cash rentals in each county of the zone. A comparison of these data with the average valuation of farm lands in the counties concerned indicates that the average cash rentals are 9 percent of the average value in North Dakota, 8 percent in South Dakota, 10 percent in Nebraska, 10 percent in Kansas, 8 percent in Oklahoma, and 9 percent in Texas. From this rental income, the owner pays taxes and specified upkeep of improvements. Since however the improvements on land acquired for shelterbelt planting will be maintained by the Government, the cash rentals should be reduced accordingly. It is therefore proposed to reduce the above percentages in each State by 1, so that the percentages of land value used to compute annual rentals for shelter-belt planting areas will be: North Dakota 8, South Dakota 7, Nebraska 9, Kansas 9, Oklahoma 7, and Texas 8.