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Economic Benefits of Farmland Preservation: Evidence from the United States

This paper explores how well farmland preservation programs provide the benefits their proponents state they do: food security and local food supply, a viable local agricultural economy, environmental and rural amenities, sound fiscal policy and orderly development.
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  • Food security and local food supply:
    • Consumers value the ability to purchase local agricultural products. Evidence shows that the sale of local farm goods is important to local economies and some type of public intervention is needed to ensure they are supplied.
  • A viable local agricultural economy:
    • Some evidence has been found that farmland preservation programs can benefit the local economy and/or have no negative impacts relative to other economic development opportunities. A 2002 study found that communities that manage land for conservation purposes do not have lower employment growth rates, wage rates, and may have a slightly higher residential growth rate because of the draw of the amenities provided by the lands. Farmland and open space is a basis for tourism in many states.
    • Farmland preservation can signal a commitment to the farming industry that stimulates farm investment rather than waiting to sell out. Farmers are using preservation as a way to maintain a sustainable agricultural economy. A 2007 survey of farmers in four Maryland counties found that, over a five-year period:
      • Sixty six percent of farmers of preserved farms invested in their farm versus 55% of farmers of non-preserved farms. Sixty six percent of farmers of preserved farms attended at least one workshop to enhance their farming skills compared to 38% farmers of non-preserved farms.
      • Forty two percent of farmers said they wanted to use the money they received from preserving their farm for their farm operations. Eighteen percent used the money to finance their farming operations, 35% to reduce debt, 8% saved the money or invested it in their farm, 12% used it to fund their retirement instead of selling their land to do so, and some bought additional land or farming equipment.
    • A 2004 Delaware study found that 33% of farmland preservation participants used the funds to decrease mortgage debt, 15% to purchase additional land, and 15% to purchase farm equipment
    • A critical mass of farms may be necessary to support some sectors of a community’s industry, lending additional importance farmland preservation. For example, New Jersey does not offer the same level of extension services to dairy farmers that other states do because it does not have a critical mass of dairy farmers, and this lack of services can impact input costs and management quality.
  • Environmental and rural amenities:
    • Research suggests that people clearly desire farmland preservation programs and express a willingness to pay for the environmental and rural amenities they provide.
    • The preservation of farms may sufficiently raise the property taxes of nearby homes to pay for the preservation of additional farms. This could, at least in the short-term, allow farmland preservation programs to be self-sustaining, though this may not be the case for rural or predominantly agricultural counties.
  • Sound fiscal policy and orderly development;
    • The impact of preservation programs on development patterns is unclear. Some evidence shows that farmland preservation alone has limited impacts on concentrating growth, but combined with other policies may be able to direct development away from agricultural areas. The positive amenities generated by preservation may increase the demand for housing near the preserved farms, and create even more development pressure on other farms, especially in areas where there is a short commute to employment centers. An area that should be researched is whether farmland preservation programs shift development to forests.

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Last modified by Gayle Diehl

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