Key takeaways
- A partial taking of farmland includes damages to the remainder, not just the acreage acquired.
- Fair market value is measured at the highest and best use of the land, which is not always its current agricultural use.
- A displaced farm operation may take a fixed payment equal to average annual net earnings, not less than $1,000 and not more than $53,200, in lieu of actual moving and reestablishment costs.
- Where only part of the land is acquired, that fixed payment is available only if the partial acquisition displaced the operator or substantially changed the nature of the farm operation.
- A farm may also claim up to $33,200 in reestablishment expenses at a replacement site.
Why a narrow strip can be an expensive taking
Pipeline easements, transmission corridors, road widenings, and drainage projects usually take a band across a property rather than the whole of it. The acreage number looks small. The effect on the operation often is not.
United States v. Miller established that where a parcel is used and treated as an entity, compensation for a partial taking includes value arising from the relation of the part taken to the whole. That principle is the foundation for severance damages, and on farm ground it does most of the work.
What severance damages cover on agricultural land
Severance damages compensate the loss in value to the land that remains. On a farm the common drivers are practical rather than legal.
A corridor that cuts a field diagonally leaves point rows and short passes, which lowers efficiency on every pass for the life of the field. A taking that severs a tract from its access point can strand acreage behind it. Irrigation systems designed around a full circle or a full run may no longer fit. Drainage patterns change. Fencing, gates, and livestock movement between pastures may need rebuilding.
Each of these is a real reduction in what a willing buyer would pay for the remainder, and each should be identified and valued rather than folded into a round number.
Highest and best use is not always farming
Fair market value in condemnation assumes valuation at the highest and best use of the property as of the date of taking, not merely its current use. The claimed use must be legally permissible, physically possible, financially feasible, and maximally productive, and there must be a reasonable probability the land could be put to that use in the near future. Speculative uses are excluded.
This matters most where farmland sits in the path of development. Land at the edge of a growing town may be worth considerably more than its agricultural income supports. Owners commonly argue development potential and condemning agencies argue current use, and the gap between those positions is frequently the largest dollar dispute in the case.
Is a project crossing your farm or ranch?
Have the alignment, the appraisal, and the effect on your operation reviewed before you sign. Free and no obligation.
Get Your Free Case ReviewWhen the farm operation itself is displaced
Where a federal or federally assisted project displaces a farm operation, the relocation rules in 49 CFR Part 24 apply alongside the compensation for the land.
Under 49 CFR 24.305, a displaced farm operation may choose a fixed payment in lieu of both actual moving and related expenses and actual reasonable reestablishment expenses, in an amount equal to its average annual net earnings, subject to a floor of $1,000 and a ceiling of $53,200. Average annual net earnings is one half of net earnings before federal, state, and local income taxes during the two taxable years immediately before the year of displacement.
Partial acquisitions carry an extra condition. Where only part of the land is acquired from what was a farm operation before the acquisition, the fixed payment is made only if the agency determines that the acquisition of part of the land caused the operator to be displaced from the operation on the remaining land, or that the partial acquisition caused a substantial change in the nature of the farm operation.
A farm is also within the reach of 49 CFR 24.304, which allows a payment not to exceed $33,200 for reasonable and necessary expenses actually incurred in relocating and reestablishing at a replacement site.
Easements are not sales, and the terms matter
Many agricultural takings are easements rather than fee acquisitions. The pipeline or utility acquires the right to use a strip; you keep title and continue farming over it subject to the restrictions.
The value of what is taken therefore depends on what the easement document permits and forbids. Width of the permanent versus temporary workspace, depth of cover, restrictions on structures and deep rooted crops, access rights across the balance of the property, repair of drain tile, topsoil handling and restoration, and responsibility for weeds and ruts are all terms, and terms are negotiable in a way that a court awarded number is not.
What to do when the surveyors arrive
Get the proposed alignment on a map you can read, and walk it against how you actually farm the ground.
Document the operation before anything changes. Yield history, irrigation layout, tile maps, field boundaries, and photographs of access points are far easier to gather now than to reconstruct later.
Ask for the appraisal and check whether it values the remainder at all, and whether it treats the land at its highest and best use. Then get your own appraisal from someone who has valued agricultural property in partial takings.