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Is There a Private Market for a Georgia Farmland Preservation Program? Bethany L. Lavigno Land Use Studies Initiative The University of Georgia.

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Presentation on theme: "Is There a Private Market for a Georgia Farmland Preservation Program? Bethany L. Lavigno Land Use Studies Initiative The University of Georgia."— Presentation transcript:

1 Is There a Private Market for a Georgia Farmland Preservation Program? Bethany L. Lavigno Land Use Studies Initiative The University of Georgia

2 Why do we Need Farmland Preservation Programs? Urban Sprawl: Georgia is the 4 th fastest growing state 2 million acres of productive farmland is lost annually Irreversibility of the change in land use Not quantity but quality of land lost Farmland helps balance community budgets. 1 in 7 Georgian’s work in the food & fiber industry

3 Objectives Determine whether there is a demand and/or supply for a state or privately run Georgia Farmland Preservation Program In order to do this I will: Farmer WTA mail survey Consumer WTP phone survey Estimate a potential farmland supply curve Estimate the median price per acre for development rights Estimate the potential revenue that could be generated to fund this type of program

4 Theoretical Framework Maximize household utility by comparing their utility when their land has development rights to when they have sold the development rights Therefore a farmers’ WTA can be defined as the value that makes both indirect utility functions equal: U[x i, DR i, M i ] = U[x i, 0, WTA i + M i ]

5 Theoretical Framework (cont) In order to estimate WTA our surveys had three initial dollar values ($1500, $3000, $5000) & two purchasing agencies To simplify, for the moment, consider the following questions with the same basic set up. A. For $w, will you sell your development rights to permanently preserve your land? B. If Yes, for $v would you sell? C. If No, for $z would you sell?

6 Probabilities in our Ordered Probit Model:

7 Data Collection: WTA Survey 1250 mail surveys to farmers who owned 300 or more acres The survey included questions on: General demographics Specific questions on farm size & operation E – Commerce Hedging Farmland Preservation The survey was r ed two months after the original mailing Yielding a total response rate = 40.74%

8 Data Collection: WTP Survey Consumer phone survey was conducted by the Survey Research Center of UGA Phone survey included questions pertaining to: General demographics Community or career affiliation with agriculture Each participant then was asked one of the three WTP questions, with a cost of $20 or $50 annually: Private, voluntary (membership) Public, voluntary (license plate) Public, mandatory (tax referendum) 515 useable surveys

9 Estimated Regional WTA Values

10 Potential State Farmland Supply

11 Potential Private Farmland Supply

12 Consumer WTP Results

13 Consumer Budget Constraints

14 Estimated Public Farmland Preservation Market

15 Estimated Private Farmland Preservation Market


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