Farmland Values Research Articles

Recreational value estimation of suburban leisure agriculture: a case study of the Qianjiangyue agritourism farm

As a form of economic and community development, agritourism has a strong and widespread appeal to all tourists. To explore the situation and value of agritourism in China, the Qianjiangyue agritourism farm located between Fuzhou City and Yongtai County was chosen to evaluate recreational values. The data was obtained from tourists and farm samples in Qianjiangyue agritourism farm by questionnaires. Two basic models including the zonal travel cost method (ZTCM) and the individual travel cost method (ITCM) were applied for data analysis. The recreational value estimation results obtained from ITCM and ZTCM showed that the total consumer surplus (CS) of the Qianjiangyue agritourism farm in 2011 was estimated at 54,533,300 CNY (8,894,682 US$) which was equal to a CS per tourist of 3029.63 CNY (494.15 US$), and the annual recreational value of agricultural landscapes per hm2 was 361,078 CNY (58,893.82 US$). The average annual recreational value of agritourism farmland was 15.7 times of that from traditional farming, and 6 times of present land business income. This paper will be helpful for exploring and utilizing appropriate environmental resources in China.

Flip the Switch: The Impact of the Rural Electrification Administration 1935–1940

To isolate the impact of access to electricity on local economies, we examine the impact of the Rural Electrification Administration low-interest loans in the 1930s. The REA provided loans to cooperatives to lay distribution lines to farms and aid in wiring homes. Consequently, the number of rural farm homes electrified doubled in the United States within five years. We develop a panel data set for the 1930s and use changes within counties over time to identify the effect of the REA loans on a wide range of socio-economic measures. The REA loans contributed significantly to increases in crop output and crop productivity and helped stave off declines in overall farm output, productivity, and land values, but they had much smaller effects on nonagricultural parts of the economy. The ex-ante subsidy from the low-interest loans was large, but after the program was completed, nearly all of the loans were fully repaid, and the ultimate cost to the taxpayer was relatively low.

Does the Minimum Lot Size Program Affect Farmland Values? Empirical Evidence Using Administrative Data and Regression Discontinuity Design in Taiwan

This study empirically assesses the causal effect of the minimum lot size program on farmland values in Taiwan. A unique dataset of 4,032 parcels of farmland drawn from administrative foreclosure auction profiles between 2000 and 2008 and regression discontinuity design were applied to cope with the endogeneity issue of land use regulations. The results of the parametric and nonparametric estimations indicate that the minimum lot size program significantly increases farmland value by approximately 18% and 15%, respectively. Moreover, the program effect is more pronounced for farmland located in urban/suburban areas. In the absence of a tax effect and externality resulting from non‐agricultural activities, the significant program effect on farmland values is likely to result from the effect of the program on farmland's option value for future development.

Housing Market Bust and Farmland Values: Identifying the Changing Influence of Proximity to Urban Centers

This article estimates the impact of the 2007–2008 residential housing market bust on farmland values, using parcel-level farmland sales data from 2001–2010 for a 50-county region under urbanization pressure in western Ohio. Hedonic model estimates reveal that farmland was not immune to the residential housing bust; the portion of farmland value attributable to proximity to urban areas was almost cut in half shortly after the bust in 2009–2010. Nonetheless, total farmland prices remained relatively stable in the 2000s, likely due to increased demand for agricultural commodities. Our results are robust to different assumptions about the structure of the unobserved spatial correlation.

The Impact of Climate Change on Agriculture in the Southwestern United States: The Ricardian Approach Revisited

This paper estimates a Ricardian model of farmland value across the counties of the semiarid Southwestern United States. Compared to previous contributions, we focus on one climate zone and include the presence of extreme weather events and of farm subsidies in our analysis. We also control for heterogeneity and for various types of spillover effects. Once calibrated, the model is used to project changes due to future climate conditions. We find that the probability of a decrease is great in highland counties while an increase or decrease is equally probable in lowland counties where climate impacts farmland value less.

Productive value of farmland in Gauteng with implications for land reform

Information about the productive value of farmland is essential for willing buyer, willing seller land reform. We used the farm census to investigate the demand for land for two statistical regions in Gauteng over the period 1983 to 2002. With values in constant 2010 prices throughout, comparable demand curves were constructed from gross farm revenues. Although gross revenue varied from year to year and site to site, it usually fell in a band of R2,000 to R3,000 per hectare for this maize growing and cattle rearing area. During the study period maize production shrank by three quarters in both areas, while cattle numbers stayed constant at one site and fell by 67% at the other site. While one would expect some decline in agriculture due to urbanization, it is likely that the census no longer attains sufficient coverage to be considered a census. The minimum land reform grant can typically buy less than a hectare of farmland in this area while the maximum grant plus substantial own contribution barely achieves a farm size of thirty hectares. It is therefore unsurprising that land reform is failing.

US agricultural support programs and ethanol policies effects on farmland values and rental rates

Purpose – In recent years, prices for prime farmland have increased substantially, begging the question is the dramatic increase the result of a speculative bubble or consistent with market fundamentals with increases driven by increased global demand, low interest rates, and recent changes to US agricultural and energy policies. The purpose of this paper is to investigate the impacts of recent agricultural support policies and ethanol policies on farmland values and rental rates. Design/methodology/approach – Farm-level Agricultural Resource Management Survey data collected by the United States Department of Agriculture (USDA) between 1998 and 2008 as well as county-level data collected by the USDA, US Census Bureau, and Bureau of Economic Analysis are used to determine the impacts of recent agricultural support policies and ethanol policies on farmland values and rental rates, while controlling for parcel characteristics and urban pressure. Specifically, weighted ordinary least squares and two-stage least squares are used to investigate the impact of various governmental agricultural support policies, corn ethanol facilities location, and local corn ethanol production capacity on farmland values and rental rates. Findings – The results indicate that government payments, urban pressure, and the proximity of the parcel to an ethanol facility have a positive impact on both farmland values and rental rates. More specifically, parcels located in the same county as at least one corn ethanol facility are more valuable and command higher rental rates. In addition, county-level ethanol production capacity is positively associated with farmland values and rental rates. An inverse relationship between distance of the parcels from an ethanol facility and farmland values is also found; a similar result is found for rental rates. Research limitations/implications – The findings suggest that agricultural support payments and ethanol policies are capitalized into farmland values. These findings have important implications for the formulation of future farm policy. A limitation of the analyses is that farmland values are estimated by landowners; future research could utilize farmland transaction data to overcome potential biases generated by using landowner estimates. In addition, while our study period covers 11 years, future research could expand the time period further to analyze the effect of more recent agricultural and ethanol policies. Originality/value – This paper extends prior research pertaining to factors influencing farmland values and rental rates by also examining the proximity of the parcel to an operating ethanol facility using a unique data set.

Forecasting of Farmland Value Increasing Rate and Estimation of Monthly Payment of Farmland Pension Considering the Regional Differences

Forecasting of Farmland Value Increasing Rate and Estimation of Monthly Payment of Farmland Pension Considering the Regional Differences

Impact of land cover homogenization on the Corncrake (Crex crex) in traditional farmland

The loss of landscape heterogeneity is causing declines of farmland biodiversity around the world. Traditional farmland regions are often highly heterogeneous and harbor high biodiversity, but are under threat of land cover homogenization due to changing agricultural practices. One species potentially affected by landscape homogenization is the Corncrake (Crex crex), which is threatened in Western Europe but remains widespread in the traditional farmland regions of Eastern Europe. In this study we present a case study aiming to assess the potential threat of landscape homogenization for the Corncrake in Romania. We first examined current Corncrake distribution in relation to woody vegetation cover, landscape heterogeneity, and topography (measured at three different spatial scales), as well as human disturbance, throughout the existing agricultural mosaic. Second, we predicted potential future distribution of suitable Corncrake habitat in response to land cover homogenization by simulating a reduction in land cover diversity. Corncrakes were present in grassland and arable fields, and preferentially occupied remote areas that were wet and flat, and had high land cover diversity at the 100 ha scale. The simulation of land cover diversity loss revealed that even a moderate reduction of land cover diversity could drastically reduce the extent of suitable Corncrake habitat. Our findings show the high conservation value of traditional heterogeneous farmland for the Corncrake. Therefore, to protect the Corncrake in traditional farmland, pro-active policy measures should encourage the continuation of mixed farming practices to maintain a diversity of land covers.

Estimating the Total Economic Value of Cultivated Flower Land in Taiwan

Many arable land areas have been converted to residential or business uses by Taiwan government authorities, because the low farmland value is associated with the low value of agricultural products. However, agriculture is multifunctional. This study investigates farmland value through Total Economic Value (TEV) for Tianwei Township, which is Taiwan’s largest floral farmland region. Direct use value measures the floral products’ output value and recreational benefit. Recreational benefit from visitors’ flower sightseeing was measured by the travel cost method (TCM). Option value and non-use value, including bequest value and existence value, measure the residents’ willingness to pay through the double-bounded dichotomous contingent valuation method (CVM). The results show that the total floral products’ output is NT$1.441 billion in 2007, recreational benefit is roughly NT$17.757 billion. The intangible value of option value and non-use values are approximately between NT$5 million to 15 million. Therefore, ignoring various values of farmland might lead to an underestimation of farmland value.

A quick assessment from expert judgements to assist in farmland valuation

Land is the most important agricultural asset, farmland transactions are generally not recurring actions for most buyers and sellers, thus it is often required reliable information from expert judgements. This paper presents a quick asset pricing method under uncertainty, based on the use of two reliability functions, a multidimensional index of characteristics or qualities influencing on the market value and the expert judgments, which overcomes the disadvantages of the valuation method based on two distribution functions for a multidimensional quality index. The usefulness of this method is illustrated through an empirical application on farmland pricing in South-East Spain, using a two-dimensional quality index.

The impact of decoupled payments on U.S. cropland values

AbstractAn extensive literature has shown that various farm programs may influence the value of farmland, but other studies have not examined the cropland price effects of direct, or decoupled, payments separate from countercyclical payments. This study uses nationally representative confidential field‐level panel data with farmer‐reported per‐acre land values. We analyze the impact of decoupled and other farm program payments on farmland values. Using a fixed effects model and controlling for various factors that influence farmland values, we find that an additional dollar of decoupled payments has a large and statistically significant impact on farmland values of about $18 per acre. These results are comparable with similar studies undertaken in Europe.

Do agri-environmental schemes contribute to high nature value farmland? A case study in Emilia-Romagna (Italy)

The objective of the paper is to determine whether the agri-environmental schemes included in the rural development programme of Emilia-Romagna (Italy) have played a role in enhancing the nature value of farmland in that region. An indicator is developed for biodiversity friendly farming practices (BFFP) and its level and distribution at the municipality level is measured, using data derived from the two last national agricultural censuses, year 2000 and 2010. Thereafter, the relationship between BFFP and participation in rural development measures is analysed by way of spatial econometric techniques. The main result of the paper are consistent with the expectation that RDPs have an impact on how BFFP changes. However, measures supporting organic farming contribute to the evolution of its distribution in a positive manner, whilst the other measures investigated, such as integrated production, do not. The paper also highlights the fact that these effects have significant spatial correlations.

Using Degree Days to Value Farmland

Farmland values have traditionally been valued using seasonal temperature and precipitation. A new strand of the literature uses degree days over the growing season to predict farmland value. We find that degree days and daily temperature are interchangeable over the growing season. However, the way that degree days are used in these recent studies is problematic and leads to biased and inaccurate results. These new findings have serious implications for any study that copies this methodology.

Evaluating the impact of rural development measures on nature value indicators at different spatial levels: Application to France and The Netherlands

This paper proposes an approach for assessing the effectiveness of those agri-environmental schemes and rural development measures aimed at enhancing the natural value of farmland and, more generally, aimed at releasing the pressure on the environment due to agriculture. First, based on fine scale data, indicators derived from the High Nature Value farmland concept are tested at different scales, resolutions and situations: LAU2 for The Netherlands and LAU1 for France. The effect of rural development measures on the evolution of these indicators is then explored. Significant cause-effect relationships are found in the French cases, while only relationships of correlations are observed from the Dutch case study, obviously caused by a lack of data. Using fine scale data on rural development measures related to both 2000–2006 and 2007–2013 programming periods of the Common Agricultural Policy, a spatial econometrics methodology is applied to France, at national level on the one hand, and at a selected NUTS2 level on the other. The results indicate that agri-environmental schemes and specific rural development measures affect the changes in the indicators, and that the spatial scale of the analyses matters. In particular, results indicate that trends observed at the national scale do not necessarily apply at the regional scale (e.g. impacts of conversion to organic farming, the grassland premium, payments for water and biodiversity protection) underlining the importance of multi-scale assessments. Interestingly, delayed effects of the measures implemented in the 2000–2006 programming period, such as machinery investment aids and less-favoured area payments, are detectable. As regards the 2007–2013 rural development measures, the most significant positive effects on the farm nature value indicator are found, at the national level, for locally targeted agri-environmental schemes focused on biodiversity and water issues and, at the NUTS2 level, for supporting organic farming schemes. Given that the farm nature value indicator is built from three different indices (addressing crop diversity, grassland share, and wooded and afforested farmland) the effect of rural development measures on each of these individual indices is also explored. This enables the main structure and the magnitude of policy impacts to be captured and helps with the understanding of why certain objectives were not met. Key findings are relevant in the context of policy monitoring and evaluation, while the methodology proposed, that incorporates spatial effects, is an important contribution to the implementation of the Common Monitoring and Evaluation Framework by Member States to account for national, regional or local characteristics.

Soil Erosion Is Influenced by Grain for Green Policy in Loess Plateau Area of Northern Shaanxi, China

Grain for Green Policy (GGP), one of China’s important ecological construction and protection policies, have been made remarkable achievements since implementation in 1999. The purpose of this work is to assessment of soil erosion influenced by GGP, which implementation is lead to great change of land use and vegetation cover, using RUSLE model on the basis of land use, MODIS NDVI, DEM and precipitation data in Loess Plateau area of northern Shaanxi, northwest of China. Result showed: (1) GGP implementation in northern Shaanxi was mainly during 1999-2003 and the area of returning farmland in the period accounted for 81.28% of the total area from1999 to 2008. (2) Farmland in northern Shaanxi and slope >25o was decrease 4.94% and 4.84%, respective ly, while grassland was increase 4.04% and 4.05%, respectively. The change of decreasing farmland and increasing grassland was mainly from 2000 to 2005 in northern Shaanxi and slope >25o. (3) Farmland was convert into woodland and grassland, which leaded to increasing of vegetation NDVI. Especially, the vegetation NDVI value of farmland in slope >25o was increase larger than whole area of northern Shaanxi from 2000 to 2010. (4) The change area of soil erosion in northern Shaanxi and slope >25o was decrease in 1 degree, while was increase in other degrees from 2000 to 2010. But when recalculated by rainfall erosivity in 2000, the change area of soil erosion in northern Shaanxi and >25o was increase in 1 degree, while was decrease in other degrees from 2000 to 2010. Vegetation cover change induced by GGP was reduce soil erosion, but due to rainfall erosivity increased, soil erosion was show increase trend in northern Shaanxi and slope >25o.

Harnessing the biodiversity value of Central and Eastern European farmland

AbstractA large proportion of European biodiversity today depends on habitat provided by low‐intensity farming practices, yet this resource is declining as European agriculture intensifies. Within the European Union, particularly the central and eastern new member states have retained relatively large areas of species‐rich farmland, but despite increased investment in nature conservation here in recent years, farmland biodiversity trends appear to be worsening. Although the high biodiversity value of Central and Eastern European farmland has long been reported, the amount of research in the international literature focused on farmland biodiversity in this region remains comparatively tiny, and measures within the EU Common Agricultural Policy are relatively poorly adapted to support it. In this opinion study, we argue that, 10 years after the accession of the first eastern EU new member states, the continued under‐representation of the low‐intensity farmland in Central and Eastern Europe in the international literature and EU policy is impeding the development of sound, evidence‐based conservation interventions. The biodiversity benefits for Europe of existing low‐intensity farmland, particularly in the central and eastern states, should be harnessed before they are lost. Instead of waiting for species‐rich farmland to further decline, targeted research and monitoring to create locally appropriate conservation strategies for these habitats is needed now.

The Impact of Pasture Insurance on Farmland Values

This study examines the impact of publicly supported insurance on agricultural land values. The analysis employs confidential, nationally representative panel data on field-level pastureland values and exploits a natural experiment provided by gradual introduction of the Pasture, Rangeland, and Forage Insurance Pilot Program. We use a field-level fixed-effects model that controls for several time-variant factors. We find that insurance availability is associated with an increase of at least 4 percent in pastureland values. This increase is comparable with increases generated by other government programs but is much smaller than total farmland value increases experienced in recent years.

Farmland Protection and Agricultural Land Values at the Urban‐Rural Fringe: British Columbia's Agricultural Land Reserve

AbstractFarmland conservation policies typically use zoning and differentiated taxes to prevent urban development of farmland, but little is known about the effectiveness of these policies. This study adds to current knowledge by examining the impact of British Columbia's Agricultural Land Reserve (ALR), established in 1973, which severely restricts subdivision and nonagricultural uses for more than 4.7 million hectares of farmland. To determine the extent to which the ALR preserves farmland by reducing or removing the development option, a multilevel hedonic pricing model is used to estimate the impact of land use, geographic, and zoning characteristics on farmland value near the capital city of Victoria on Vancouver Island. Using sales data from 1974 through 2008, the model demonstrates a changing ALR impact over time that varies considerably by improved and unimproved land types. In 2008, landowners paid 19% less for the typical improved farmland parcel within the ALR versus that outside it. This suggests that would‐be developers expect permanency in the zoning law, and prefer non‐ALR zoned land. However, ALR land that is unimproved has a premium of 55%, suggesting that this land is more valuable for agriculture than for development. Farmland located closer to the city or the commuting highway commands a premium if it has a residence on it, with a residence also explaining why smaller agricultural properties sell at higher prices. However, it appears that zoning by itself is insufficient to protect farmland; other policies likely need to be implemented in conjunction with zoning to protect agricultural land.

Identifying the Extent of the Urban Fringe and Its Impact on Agricultural Land Values

This study presents an empirical model of the impacts of agricultural and urban returns on farmland value. The model allows the marginal impacts of parcel characteristics to vary nonlinearly over space with an endogenous smooth transition between urban fringe and rural areas. The estimation examines 10,317 parcel-level farmland transactions across the state of Illinois over the period January 2001–December 2009. The results suggest that marginal impacts of both agricultural and urban returns differ between urban fringe and rural areas.