Farmland preservation and conversion: An econometric analysis of the impact for the Northeastern United States

Farmland preservation programs have been used in the United States for many years to facilitate orderly development. These policies have evolved from rural/agricultural zoning ordinances to a fourth generation of policies that encompass purchase of development rights (PDR) programs. PDR programs compensate landowners or farmers for agreeing not to sell farmland for development. Farmers or landowners may continue to farm; however, minor restrictions such as wise stewardship of the land and best management practices may be imposed. The overall objective of this study is to examine the impact of PDR programs on farmland conversion in the Northeastern United States. This region is selected because it has the longest history with PDR programs. In addition, the Northeastern United States experiences the most pressure from urbanization as it houses 22 percent of the population but has only 6.7 percent of the land area in the U.S. This study uses county-level data from 1982 to 1997, and an econometric model is developed to correspond with periods of the Census of Agriculture; i.e., 1982 to 1987, 1987 to 1992, and 1992 to 1997. Farmland conversion is specified as a function of PDR programs and other policy variables, urban infrastructure variables, landowners\u27 demographics variables, and housing demand variables. Results of the farmland conversion model suggest that PDR programs significantly reduced farmland conversion for the first estimation period. In terms of positive spillover effects, while all the signs on the parameter estimates are negative, only in the third estimation period does the model provide evidence of no positive spillover effects. In terms of policy implications, one can conclude that if PDR programs are adopted in other regions of the United States the impact may be similar; i.e., significant reduction of farmland conversion followed by very little or no impact. Other policies that were included in this study are the Conservation Reserve Program and the Wetland Reserve Program. These programs are designed to conserve farmland and wetlands and became significant in the Northeast in the second estimation period. These programs have different objectives than farmland preservation programs. However, if administered in tandem with preservation programs, the overall impact could be greater