Is There a Private Market for a Georgia Farmland Preservation Program

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 4th 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 Georgians 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
• Uxi, DRi, Mi Uxi , 0, WTAi Mi

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 remailed 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