The Economics of Agricultural Land Preservation

Abstract

Several state legislatures are considering enactment of tight zoning laws to preserve high productivity land for agricultural use. In the vernacular of the day, this land is referred to as "prime" (Raup, pp. 2, 3). Apparently, the myriad of tax preferential policies and other planning devices designed to protect agriculturallands from conversion to other uses have not been very effective (Hansen and Schwartz). Some of our best agricultural land continues to be converted to expanding urbanization, transport, utility easements, and for a variety of public purposes. So it is argued by those who advocate zoning for agricultural land that more drastic measures are now needed to stop this avalanche before "serious" agricultural land shortages occur.Of course, if social action is needed to retain prime land in agricultural use, the land market cannot efficiently allocate land resources among competing uses. The tax preference schemes were enacted to make it less costly to use land for agricultural purposes so that significant quantities of land would be kept in agricultural use that would otherwise shift. But use changes could still occur through the market if value differentials were great enough to offset the production cost advantage created by the tax preference. The crux of the proposed prime land preservation legislation is quite different; it removes the land allocation decisions from the market entirely by using productivity criteria to qualify land for preservation and by granting the power for exemptions and use changes to designated boards.

Estimating Willingness to Pay to Protect Acequia Irrigation and Culture: Lessons from San Miguel County, NM

“…Rural residents voted yes at a higher level (75% vs. 58%) and showed a higher WTP ($35.28 vs. $12.20) than the urban population. This is not surprising, though it contradicts Gardner's (1977) assertion that benefits of farmland preservation principally accrue to urban residents. Furuseth (1987) finds support for a "sociospatial" hypothesis, which suggests that support for protection programs is widely distributed in communities, and reflects a growing concern about rapid development in rural areas.…”

The Future of Preserved Farmland: Ownership Succession in Three Mid-Atlantic States

“…The economic rationale and the measurement of public preferences for farmland preservation have been particularly well studied (Bergstrom & Ready, 2009;Bromley & Hodge, 1990;Duke & Ilvento, 2004;Gardner 1977;Hellerstein et al, 2005;Kline & Wichelns, 1996;Nickerson & Hellerstein, 2003). Liu and Lynch (2011b) evaluated whether farmland preservation programs affect the rate of farmland conversion to nonagricultural uses.…”

Multifunctional Agriculture and the Preservation of Environmental Benefits

“…The latter often yields significant amenity and ecological benefits that may not be reflected in the prevailing allocation of land between agricultural and nonagricultural uses. From an economic perspective, further government intervention may thus be justified because of the failure of the land market to fully consider these benefits from agriculture in allocating land (Gardner, 1977;Lopez, Shah and Altobello, 1994;Bromley, 2000). On the other hand, the question is about what the public gets from preserving farmland, and whether other land uses would yield greater social returns than agriculture (McConnell, 1989).…”