Rangeland accounts for more than 10 million acres under Williamson contracts; 5 million acres are prime farmland. Rangeland is considered "non-prime” because the soil is less fertile than that used for intensive agriculture. The distinction depends on the per-acre production potential of a parcel of land.

"Rangeland can provide many ecosystem services precisely because it is not put to intensive use, unlike suburban developments or irrigated agriculture,” Wetzel explained. At the same time, grazed land is the rangeland most at risk of conversion, with the current rate estimated to be 47,000 acres per year. Of ranchers surveyed, 72 percent considered the Williamson Act to be "extremely important” to their operations; 23 percent said they were likely or very likely to end their entire ranching enterprise if they lost this tax relief.

"California ranching is a vulnerable, low-profit industry,” said Dale Manning, study co-author and UC Davis doctoral candidate. "Of those surveyed, 38 percent lost money, 19 percent roughly broke even, and 42 percent made a profit. Of the ranches that made a profit in 2009, 70 percent made less than $10,000.”

Under the original Williamson Act program, contract-holding counties received annual subvention (financial assistance) payments from the state in proportion to their enrollment and to the productivity of the enrolled lands. These funds helped compensate for the tax revenue losses counties faced due to their participation.

Beginning in budget year 2008–2009, California drastically reduced subvention reimbursements to counties as part of a plan to phase out the program. In 2009–2010, California Governor Arnold Schwarzenegger cut state subvention funding to $1,000, essentially eliminating state support.

Before subvention payments were cut, state reimbursements to counties ranged from $5.2 million in heavily agricultural counties such as Fresno, Kern and Tulare to less than $12,000 in more urbanized counties such as Orange and San Bernardino. In 2010, in response to subvention payment loss, Imperial County ended its participation in the program, allowing contracts to expire countywide.

Under mounting budget deficits, a number of counties have placed a moratorium on new Williamson Act contracts because of uncertainty surrounding the future of subvention payments.

The research article, and the entire October–December 2012 issue, can be downloaded at http://californiaagriculture.ucanr.edu.

California Agriculture is the University of California's peer-reviewed journal of research in agricultural, human and natural resources. For a free subscription, go to: http://californiaagriculture.ucanr.edu, or write to calag@ucanr.edu.