Unfortunately there is no way to answer this question without looking at the documents related to the use of the land (deed restrictions, easements, covenant agreements). Resolving the issues you describe require consultation with an attorney licensed to practice law in Mass and who specializes in real estate law and/or land use law. It is likely that resolution will require discussions with Dept. of Agriculture.
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Your issue sounds like it may involve a government imposed property easement, local zoning codes, and an erosion damages matter. To cover these in detail probably requires you to consult with a local land-use/real-estate Mass. attorney. You should also make sure that the Department has provided you a written explanation for what they expect from you with regard to your project. If you do a business plan make sure the Department tells you what has to be included. Some farmers and our WA State Extension Office use the University of Minnesota Business Plan instructions found at: http://www.misa.umn.edu/Publications/BuildingaSustainableBusiness/
Arguably, the Department is allowed to ask you how you plan to keep the property as a working agricultural parcel, and the business plan may be part of that. As far as what detail they can demand, that might be negotiable.
Perhaps the training ring for horses is an ancillary activity to the production of horse manure, an agricultural product ... Equestrian activities may not qualify - your equestrian clients may have to purchase extra expensive manure as an agricultural product.
Basically, an Agricultural Preservation Restriction represents sale of an interest in the land to the Commonwealth, pursuant to statutory requirements and regulations. You may need to speak with an attorney if you are having reasonable farming activities refused by the Commonwealth. Good luck!