A steeper land tax, but no development tax, discourages sprawl and incentivizes parsimonious & maximally effective use.
Which would be the opposite dynamic to the one you are concerned about.
An income tax break on food production would be a good way to keep food prices lower, while maintaining a farmers incentive to use land efficiently.
And is good economics: matching a national tax break directly to a real national commons benefit, food security, while maintaining efficiency incentives.
I still don't see how this doesn't punish non-rich people in rural areas.
ETA: You seem to have edited your post after I made mine. However, your edit does not in any way explain how "steeper land tax" does not hurt people in rural areas. I'm not concerned with sprawl; I'm concerned with rural people near the poverty line being taxed out of their homes with no recourse.
Also, "income tax breaks for food production" a) do not scale proportionally with farmer land use, and b) would seem, on first glance, to encourage overfarming, rather than letting fields lie fallow periodically, which would be a short-term gain for long-term losses and damage to the soil.
In total taxes stay the same (for an area), with empty land tax increasing, land with property decreasing (because the property taxes disappear, and land tax increases proportionally to result in the same total tax).
So it will impact different people in an area, with different situations, differently obviously.
But you are clearly right, there will be additional factors that need to be handled.
The umbrella principle, is the law should simply correct a market's oversight of external/commons costs and needs, in proportion to their real value. Then the market can do its job of optimizing resources properly.
Things like farming practices that impact land value, should be incentivized or disincentives in direct proportion to the real value being lost or gained.
(Another addition would be that any tax change impacting investments already made, should transition over a time interval long enough individuals and businesses to realign their private economics, without sudden hardship.)
A steeper land tax, but no development tax, discourages sprawl and incentivizes parsimonious & maximally effective use.
Which would be the opposite dynamic to the one you are concerned about.
An income tax break on food production would be a good way to keep food prices lower, while maintaining a farmers incentive to use land efficiently.
And is good economics: matching a national tax break directly to a real national commons benefit, food security, while maintaining efficiency incentives.