Is There a Private Market for a Georgia Farmland Preservation Program? Bethany L. Lavigno Land Use Studies Initiative The University of Georgia
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 Georgian’s work in the food & fiber industry
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
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[xi, DRi, Mi] = U[xi , 0, WTAi + Mi]
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?
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%
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