Farmland Policy and Agricultural Support in Orange County

Protection of agricultural resources and support for viable farm enterprises is critical to food production, as well as the health and welfare of the Orange County community. Several Orange County initiatives as well as administration of land use policy combine to provide guidance and support for farm owners and growers in the County.

The 2025-2029 Orange County Strategic Plan is an essential tool achieving the county’s top strategic priorities regarding environmental protection and climate action as well as a sustainable food system. One specific objective in the Environmental Protection and Climate Action goal is to incentivize and promote sustainable agriculture and local food systems development through supportive policy, funding, farmland protection and educational outreach. An additional objective in the Diverse and Vibrant Economy goal is to provide resources to new and expanding, small, creative farms and agri-businesses that add character and quality of life to our community to attract employers, employees, and visitors.

As part of the Orange County Strategic Plan, the Orange County Agricultural Preservation Board is completing the Agricultural Viability and Farmland Stewardship Plan for Orange County, NC, 2025 to 2029 which is developed to update and expand the Agricultural Development and Farmland Protection Plan from November 2009. The new plan is being developed to support the County in incentivizing and promoting sustainable agriculture and local food systems development. The primary goals are planning for agriculture, conserving farmland, and enhancing the economic viability of agriculture. It describes recent trends in agriculture and farmland loss challenges as well as opportunities for enhancing agricultural viability and stewarding the farmland in Orange County.

As part of the development of this plan, a survey of farmers and farmland owners was completed in November of 2023, resulting in approximately 92 responses. A summary of those responses includes:

• 73% of the respondents are 48 years or older with the most common age range being between 60 and 72.
• 30% of respondents said farming is their main source of income.
• 32% of respondents said agritourism contributes to their farm income.
• The top three responses to challenges to making a living farming are; 1) small profit margins, 2) high cost of land, and 3) conversion of farmland to residential use.
• 70% of respondents consider the greatest threat to farming in Orange County to be development.
• 53% of respondents said they plan to transfer their farm to family members for farm use.
• 70% of respondents lack a documented farm transition or estate plan.
• Most respondents are familiar with a conservation easement but few (16%) have their land in a conservation easement.
• Topics of most interest for additional information are; 1) preserving land with conservation easements, 2) ways to diversify the farming operation, and 3) farm planning.
• The most common approach respondents would consider adding to enhance their agricultural business is agritourism.

Comprehensive land use plans guide growth and development in the County by setting goals and objectives. The existing 2030 Comprehensive Land Use Plan considers agriculture, farm enterprises, and rural character as essential land use considerations. The existing Rural Buffer is an example of a zoning category that intends to protect the rural character around the urban area of Chapel Hill. In 2023, Orange County launched a major effort—called the Orange County Land Use Plan 2050 —to establish a cohesive, county-wide land use vision for the future and an actionable strategy to achieve that vision which includes farmland protection as one of its major objectives.

The 2023 Climate Action Plan has, as part of its Green Community strategy, Goal #3 which is to promote sustainable agriculture to expand and support initiatives within the agriculture space.

The Orange County Agricultural Development Grant Program provides grants to Orange County growers of up to $10,000 to develop and increase sources of income from new projects and expansion of existing operations. Since its inception in 2016, the program has funded well over 100 on-farm agricultural projects for a total of over $1,000,000 in grants.

Many other important services are provided through the Orange County Center of North Carolina Cooperative Extension, to include; education and technical support in the areas of Agriculture and Food, Community Development, Health and Nutrition, and 4-H Youth Development.

Voluntary Agricultural District

The county plans to continue administering the Voluntary Agricultural District (VAD) and Enhanced Voluntary Agricultural District (EVAD) program. This program is critical to promote greater public awareness of the local agricultural community and provide a way for farmers and landowners to preserve their land voluntarily. There are seven Voluntary Agricultural District Regions in Orange County, and each has at least one farm enrolled in the VAD or Enhanced VAD (EVAD) program. In addition to at-large positions, there is a position for each Region on the Agricultural Preservation Board to provide representation from across the county. As of April 2025, Orange County enrolled 158 farms. This includes 14,892 acres in the VAD and 2,797 acres in the EVAD for a total of 17,689 acres in the program (Source: Orange County Soil & Water Conservation District).

North Carolina Present Use Value (PUV) Program Overview

The North Carolina Present Use Value (PUV) program was enacted by the North Carolina Legislature to provide reduced property tax values for land actively involved in agricultural, horticultural, or forestry management. By taxing qualifying land based on its current productive use rather than its market value for development, the program provides essential tax relief to landowners, particularly farmers, and helps preserve working lands.

Eligibility Requirements

To qualify for the PUV program, property must be individually owned and meet specific criteria based on its use:

Agricultural Land Use

• Consists of one or more tracts, with at least 10 acres in actual production.
• Must have produced an average gross income of at least $1,000 for the three years preceding January 1 of the benefit year.

Horticultural Land Use

• Consists of one or more tracts, with at least 5 acres in actual production.
• Must have produced an average gross income of at least $1,000 for the three years preceding January 1 of the benefit year.
  • Note: An alternative income requirement exists for properties producing evergreens for use as Christmas trees.

Forestry Land Use

• Consists of one or more tracts, with at least 20 acres in actual production.
• An updated forestry management plan must be on file with the assessor's office.

Orange County PUV Enrollment (2025 Data)

In 2025, the PUV program provided significant tax relief in Orange County, enrolling 3,077 parcels that account for 109,299 acres, or 42%, of the county's total acreage.

Essential Tax Savings for North Carolina Farmers

Farmers should explore state and federal tax savings. Beyond Present Use Value, expenses such as seed, equipment, fertilizer, and insurance are potentially deductible (see IRS Publication 225).

North Carolina farmers are exempt from charging sales tax on raw agricultural commodities they produce. Furthermore, those with an average annual gross income of $10,000 or more (for the three preceding years) are exempt from paying sales tax on certain farm supplies and equipment. Newer farmers can attain conditional status, but the validation process can be extensive. Contact the NC Department of Revenue for more information on sales tax exemptions.

NC State Extension has additional information on farm planning available at https://farmplanning.ces.ncsu.edu/.

Land Conservation

Orange County's Strategic Plan (FY 2025-2029) prioritizes land conservation and local food security. Key objectives include:

• Incentivizing and promoting sustainable agriculture and local food systems through policy, funding, farmland protection, and education.
• Conserving and protecting high-priority open space, including natural heritage sites, nature preserves, riparian buffers, and prime/threatened farmland.

To advance this goal, the County’s Lands Legacy Program aims to permanently protect an additional 300 acres of critical lands—including farmland, natural areas, riparian buffers, floodplains, and wildlife habitat—between 2025 and 2029. Progress is already underway: the 2025 closing of two easements totaling 67 acres means the County has already met 22.4% of this five-year target.

This effort builds upon an existing goal to protect at least 12 percent of county land by 2020. As of March 2025, the conservation community in Orange County has protected 27,287 acres (10.7%) of its total land area, with 17,222 acres (6.8%) considered permanently protected. The Lands Legacy Program has protected over 3,000 of those acres, either directly or in partnership with local conservation entities and municipalities (Source: Orange County Department of Environment, Agriculture, Parks & Recreation).

Trends in Orange County Agriculture: Smaller Farms, Declining Farmland, and Shifting Organic Production

Orange County has experienced a significant shift in its agricultural landscape since 1992, characterized by a net increase in the number of farms alongside a decrease in total farmland acreage and farm size.

Key Trends in Farmland and Farm Size:

• Decreasing Farmland: While the number of farms increased from 433 in 1992 to 687 in 2022, total farmland acreage decreased from 56,555 acres to 53,068 acres between 2012 and 2022.
• More, Smaller Farms: This trend indicates that Orange County now has more, but significantly smaller, farms. The average farm size decreased by more than half, from 156 acres to 77 acres. Similarly, the median farm size declined from 80 acres to 37 acres.
• Declining Cropland: This reduction in land extends to active cultivation. Both total cropland and harvested cropland acreage have decreased. Figure 7 illustrates this decline, showing that only 29.8% of Orange County's farmland (which constitutes 20.8% of the county's total land) was harvested.

Organic Production Trends

Data on organic production, first collected in the 2012 Agricultural Census, reveals evolving trends.

In 2012, Orange County had five certified organic farms, three exempt from certification, and seven transitioning to organic production. Of the five certified farms, three reported sales under $4,999, and two reported sales over $5,000. Organic farm acreage was not reported.

By 2022, the number of farms reporting organic product sales increased to 13. However, this represents a 53% decrease in the number of farms reporting organic sales compared to 2017. Total reported organic product sales in 2022 were $6,281,000, a 5% reduction from 2017. The 2022 census identified 13 USDA-certified organic farms, nine exempt from certification, and one farm transitioning acreage. Of the 13 farms with organic sales, three reported sales under $4,999, while ten reported sales exceeding $5,000. As in 2012, the acreage of organic farms was not reported in the 2022 Census.

Farmer Demographics: More Operators, Older and Whiter, with Increasing Female Representation

According to the 2022 Agricultural Census, Orange County's farmer population is growing, with the total number of operators increasing by 21% from 2012 to 2022. However, farming is a primary occupation for less than half of these operators; specifically, 461 out of 1,234 operators reported farming as their main job.

The farming community remains predominantly white, and the average age of farmers is 58.1 years, indicating an aging workforce. Despite this, there's a significant positive trend in female representation: 465 women self-reported as producers in 2022, marking a 24% increase since 2012.

Regarding labor, 174 farms collectively employed 597 hired laborers, resulting in $7,327,000 in wages in 2022. Most of these farms utilized hired labor for less than 150 days. Additionally, seven farms reported hiring 36 migrant workers, and 281 farms reported a substantial 626 unpaid laborers.

Orange County is also cultivating its future farming talent, with 474 new and beginning producers and 117 young producers identified in the 2022 Agricultural Census.

Farm Profitability: Declining Sales, Mixed Income, and Shifting Government Support

Orange County farms generated substantial cash receipts in 2022, totaling $32,294,000 from agricultural production. Of this, crop production accounted for $17,519,000, while livestock, dairy, and poultry contributed $14,512,000. Government payments added a relatively small $263,000 to this total.

Despite these significant receipts, the financial health of farms and farmers presents a nuanced picture. Total gross income from farm-related sources, before taxes and expenses and adjusted for inflation, decreased by nearly 40% from $4,468,930 in 2017 to $2,713,000 in 2022. This decline underscores that for many, farming isn't their sole or primary source of income, as less than half of the producers are full-time farmers.

Overall sales from all farms also saw a substantial decline, dropping from $43,662,400 in 2017 to $32,449,000 in 2022, a 25.7% decrease. Consequently, the average sales per farm decreased from $63,647.57 in 2017 to $47,233 in 2022 (all figures are in 2022 dollar values).

Government support for agriculture in Orange County has also shifted. While the number of farms receiving government payments drastically decreased by 69% (to just 40 farms in 2022 compared to 2017), the government support per farm increased by 96%. However, the overall government payments to farms in the county decreased by 38.5% from 2017 to 2022.

In terms of assets, the value of farmland and buildings increased by 30.75% per acre, reflecting a rise in property values. Conversely, the value of machinery and equipment decreased by 18.6%, perhaps indicating less investment in new farm machinery or the aging of existing equipment.

Analysis of Agricultural Production Characteristics in Orange County (2017-2022)

Between 2017 and 2022, agricultural production in Orange County demonstrated divergent trends. Significant declines were observed in specific sectors: tobacco farm numbers decreased by 60% and production volume by 85%, while dairy operations dwindled from eight in 2017 to a single farm in 2022.

Concurrently, several other agricultural categories experienced expansion. The number of farms engaged in the production of fruits and nuts, poultry and eggs, sheep and goats, hogs and pigs, oilseed and grains, and greenhouse/nursery/floriculture all reported increases during this five-year period.

Orange County's agricultural profile leans towards animal production, with a slightly higher prevalence of livestock, aquaculture, and other animal production farms compared to crop farms. The 2022 Agricultural Census reported total cash receipts from livestock, dairy, and poultry at $14,512,000. It should be noted, however, that the overall number of aquaculture and other animal production operations also declined between 2017 and 2022.