CAPITALIZATION OF FARMLAND PRESERVATION PROGRAMS INTO FARMLAND PRICES

This paper examines whether permanent farmland preservation programs are capitalized into farmland prices. We consider the landowner's decision to voluntarily participate and correct for sample selection bias in our estimation of sales prices. Initial results suggest development restrictions resulting from participation in these programs are fully capitalized into farmland prices.Demand and Price Analysis, Land Economics/Use,

Protecting Rural Amenities Through Farmland Preservation Programs

We investigate what farmland preservation programs reveal about the importance of protecting different rural amenities. An extensive content analysis of the enabling legislation of various farmland protection programs suggests wide variation exists in the protection of amenities. An analysis of 27 individual Purchase of Development Rights (PDR) programs' selection criteria suggests these programs favor preserving amenities that are jointly provided by cropland and livestock operations. These PDR selection criteria also reveal unique preferences regarding the spatial patterns of preserved agricultural lands. Variation in relative weights given to protecting most parcel characteristics in PDR programs is not easily explained by factors that characterize areas experiencing farmland losses.Land Economics/Use,

PRESERVATION OR DEVELOPMENT: COMPETING USES OVER THE FUTURE OF FARMLAND IN URBANIZING AREAS

Land use, farmland preservation, competing risks models, multinomial logit models, Resource /Energy Economics and Policy,

The Farm Act's Regional Equity Provision: Impacts on Conservation Program Outcomes

The 2002 and 2008 Farm Acts increased funding for conservation programs that provide financial assistance to farmers to implement conservation practices on working farmland. Along with seeking cost-effective environmental benefits, these programs have a goal of spreading conservation funding equitably across States. The 2002 and 2008 Farm Acts strengthened this allocative goal by setting a minimum threshold for conservation funding for each State—one that exceeds historical funding for some States—for enrolling agricultural producers in specified conservation programs. This study uses conservation program data to examine evidence of the impacts of the Regional Equity provision of the 2002 Farm Act, and explores the tradeoffs that can occur among conservation program goals when legislation gives primacy to fund allocation. The study found that cross-State shifts in funding reduced the acres receiving conservation treatment for many resource problems, but increased the net economic benefits from treatments on some of them. Overall impacts on the types of producers enrolled were small.Conservation program outcomes, working-land, land protection programs, state funding levels, regional equity provision, cost & benefits, Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy,

Participation in Conservation Programs by Targeted Farmers: Beginning, Limited-Resource, and Socially Disadvantaged Operators' Enrollment Trends

Beginning, limited-resource, and socially disadvantaged farmers make up as much as 40 percent of all U.S. farms. Some Federal conservation programs contain provisions that encourage participation by such “targeted” farmers and the 2008 Farm Act furthered these efforts. This report compares the natural resource characteristics, resource issues, and conservation treatment costs on farms operated by targeted farmers with those of other participants in the largest U.S. working-lands and land retirement conservation programs. Some evidence shows that targeted farmers tend to operate more environmentally sensitive land than other farmers, have different conservation priorities, and receive different levels of payments. Data limitations preclude a definitive analysis of whether efforts to improve participation by targeted farmers hinders or enhances the conservation programs’ ability to deliver environmental benefits cost effectively. But the different conservation priorities among types of farmers suggest that if a significantly larger proportion of targeted farmers participates in these programs, the programs’ economic and environmental outcomes could change.Conservation programs, Environmental Quality Incentives Program (EQIP), Conservation Reserve Program (CRP), Wetlands Reserve Program (WRP), beginning farmers, limited-resource producers, socially disadvantaged farmers and ranchers, Environmental Economics and Policy, Farm Management, Financial Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Land Economics/Use, Production Economics, Research and Development/Tech Change/Emerging Technologies,

An Empirical Examination of Real Options and the Timing of Land Conversions

Many studies have examined the effects of land use regulations on land prices and urban spatial form. Increasingly, jurisdictions have adopted incentive based mechanisms, such as purchase of development rights (PDR) programs, to manage the pace and pattern of urban growth and the conversion of agricultural land. PDR programs provide a third option to landowners in urbanizing areas: in addition to deciding whether to develop or not, landowners can decide whether to preserve their land. To our knowledge no studies have explored how the existence of an option to participate in a PDR program affects landowners' development decisions. This research provides empirical evidence of a previously untested prediction of real options theory: that additional options increase the value of waiting to make irreversible decisions. Our paper considers how an additional land use alternative, preservation, conveys a different type of option value and how that option affects the optimal conversion time. We estimate a hazard model and find significant evidence that the option to enter an easement decreases the hazard rate of development by about 40%. The results suggest that PDR programs can provide additional open space and amenity values beyond what is provided on preserved parcels, by delaying development (by at least a few years) of parcels that are not actually preserved.agricultural preservation programs, real options, land conversion, Land Economics/Use,

THE CRP BALANCING ACT: TRADING OFF COSTS AND MULTIPLE ENVIRONMENTAL BENEFITS

The Environmental Benefits Index (EBI) ranks Conservation Reserve Program (CRP) offers by weighing program costs for enrolling land in CRP against six environmental objectives. This paper uses Monte Carlo simulations to analyze the sensitivity of CRP enrollment outcome to the specification of the EBI. Results indicate that:(a)there is no major shift in average benefits throughout the U.S. when marginal changes in the weights occur, and (b) priority area weights, whether National or State, play a role in shifting CRP away from its traditional focus on highly erodible land, and (c) there is complementarity between the enduring benefits and the wildlife objectives and substitutability between the enduring benefits and the erosion reduction objectives;Environmental Economics and Policy, Land Economics/Use,

THE EFFECT OF A FOREST CONSERVATION REGULATION ON THE VALUE OF SUBDIVISIONS IN MARYLAND

Profit-maximizing land developers are hypothesized to configure subdivisions to minimize the effects of a conservation regulation on developed land values, subject to their expectations about the demand for developed building lots. This hypothesis allows development of a hedonic price model that takes account of production adjustments. The model is applied to the Maryland Forest Conservation Act, which requires developers to retain or plant trees on part of the developed land. Being exempt from the Act allows developers to gain more for the subdivisions they develop: the cost to regulated developers is about six percent of the per-acre price of developed land. The Act has significantly lowered per-acre developed land values in subdivisions with a mixture of townhouses and single-family dwellings. Costs of the Act are reduced by provisions that allow developers to plant trees offsite or to pay fees in lieu of planting.Resource /Energy Economics and Policy,

The Ethanol Decade: An Expansion of U.S. Corn Production, 2000-09

The recent 9-billion-gallon increase in corn-based ethanol production, which resulted from a combination of rising gasoline prices and a suite of Federal bioenergy policies, provides evidence of how farmers altered their land-use decisions in response to increased demand for corn. As some forecasts had suggested, corn acreage increased mostly on farms that previously specialized in soybeans. Other farms, however, offset this shift by expanding soybean production. Farm-level data reveal that the simultaneous net expansion of corn and soybean acreage resulted from a reduction in cotton acreage, a shift from uncultivated hay to cropland, and the expansion of double cropping (consecutively producing two crops of either like or unlike commodities on the same land within the same year).Agricultural Resource Management Survey (ARMS), bioenergy, ethanol, indirect effects, land use, corn production, environmental impacts, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy,

Impact of Farmland Preservation Programs on the Rate of Urban Development

Due to high losses of agricultural land in urbanizing areas over the past several years, state and local governments have adopted zoning regulations, right-to-farm ordinances, preferential property tax programs, and other means to protect agricultural land resources. Critics of the farmland preservation efforts note that these programs may only delay the ultimate conversion of farmland to urban uses and may simply shift urban development to neighboring areas (positive spillover effects). An alternative means of permanently protecting farmland is provided by purchase of development rights (PDR) programs, which enroll acreage from landowners who voluntarily sell the development rights to their farmland. Although ownership and all other property rights are retained by the owner, the option to develop the land for urban uses is removed from the current and all subsequent landowners. The purpose of this paper is to develop an empirical model of the impact of PDR programs on urban land development rates. To estimate the empirical model, we form a dependent variable based on county level rates of urban development from the USDA National Resources Inventory (NRI) data base for nine states in the Northeast US that have adopted farmland protection measures during the sample period (1982-1997). The set of explanatory variables include dummy variables for the existence of an active PDR program in the county and active PDR programs in adjacent counties plus measures of demographics, farm returns, population growth, income, and site-specific factors gathered from several sources (e.g., Census of Agriculture, Census of Population, and USDA). The model is estimated using the ordinary least squares technique. Two key policy-relevant hypotheses: (1) PDR programs did not reduce the rate of urban development and (2) PDR programs did not induce positive spillover effects on neighboring counties. The test results suggest that PDRs may have had important more significant impact in the earlier years and did not cause positive spillover effects.Land Economics/Use,