Farm Return and Land Price Effects from Environmental Standards and Stocking Density Restrictions. Agricultural and Resource Economics Review 33(2

This study assesses the economic and environmental effects to hog finishing farms from residual taxes/standards and restrictions on manure application and stocking density. Economic effects are measured in terms of net farm income and land prices, while levels of ammonia and excess nitrogen and phosphorus proxy the environmental effects. Any environmental policy requiring the need for additional land comes at a small cost to farmers who have access to adequate neighboring land. If this is not the case, then manure application and stocking density restrictions are expensive since the producer is basically forced to either purchase land or reduce hog production levels. Key Words: land value, manure application restrictions, stocking density Public concerns over the environmental consequen-ces of livestock production and the concentration of that production in larger farm units has led to more numerous, and increasingly more stringent, regu-lations on farm practices. These regulations have evolved from simple ex ante restrictions, such as minimum separation distances of new barns from waterways, to ex post controls or incentives on man-agement practices. Although there is a geographical disparity in the extent of the legislation among countries and jurisdictions (Beghin and Metcalfe, 2000), nutrient management standards and/or stock-ing density restrictions are becoming part of the regulatory constraints facing livestock farmers. For example, confined animal feeding operations (CAFOs) in the United States will not be able to spread manure at a rate greater than the crop nutrient demands. Similarly, many Canadian livestock farmers will be required to have in place a nutrient management plan (NMP) that includes a verificatio