Measuring the effect of farmland preservation on farm profitability
In: Land use policy: the international journal covering all aspects of land use, Band 41, S. 84-96
ISSN: 0264-8377
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In: Land use policy: the international journal covering all aspects of land use, Band 41, S. 84-96
ISSN: 0264-8377
In: Society and natural resources, Band 33, Heft 6, S. 769-787
ISSN: 1521-0723
In: Applied economic perspectives and policy, Band 38, Heft 3, S. 449-473
ISSN: 2040-5804
AbstractAgricultural conservation easements have positive externalities but few studies examine the supply‐side. This paper explores whether easements may also overcome a credit‐market failure, as banks may not be lending based on the full developed value of land. Original survey data test our research hypotheses and show profitable owners and nonoperators to be using easement payments to extract capital from their land by using the preservation programs as a bank. The results also show that the unprofitable owners and operators are reinvesting in their agricultural enterprises. Both results are consistent with an underlying credit‐market failure, and the latter suggests that easements may provide indirect efficiency enhancement. The results suggest an integration of policies on agricultural finance and land preservation might lead to improved efficiency.