In the United States’ Northeastern region, there is an increasing interest in the public benefits from agriculture. These benefits are frequently referred to as multifunctional attributes. The policy challenge is to find an effective way to reflect these public demands so that multifunctional agriculture can be profitable. There is a significant research agenda that accompanies this challenge. Research topics include assessing and understanding consumer demand for multifuntional attributes, estimating the long-run returns to those production systems which supply these attributes, and designing and evaluating institutional arrangements to supply them.

The land grant system is a value-added infrastructure, designed to extend the boundaries of traditional colleges and universities to bring science to bear on the pressing needs and problems of underserved citizens and communities. With supplemental resources to support mission-oriented research and outreach, the system has addressed a market failure in higher education. It has been a key asset in achieving for the United States a vibrant agricultural economy, a prominent position in world trade, significant rural development, healthy families and communities, and the increasingly sustainable natural resource base that are characteristic of “the great American Society.” This paper explores some of the recent challenges facing the land grant system, provides a framework for examining these challenges, and stresses the need for a new cadre of “land grant economists” to provide leadership as land grants struggle to identify new visions, missions, programs, and innovations that would serve as the bedrock of a new system. Selected areas of emerging opportunities for land grant intervention are also identified.

Land-use conflicts highlight several myths about property rights. The central myth is that property rights are linked to natural rights, that property rights are durable and unchanging, and that any interference with these property rights requires public compensation. However, particular settings and circumstances lead to conflicting rights claims which the courts must sort through to determine where the more compelling rights claim resides. Situations are not protected because they have property rights. Rather, those situations found worthy of protection by the courts acquire the status of a property right. Property rights are not discovered, but are created by the courts. Applied economists must build models of property rights conflicts predicated upon an epistemology of volitional pragmatism.

The New York City Watershed Agricultural Program seeks to reduce the potential for phosphorus movement from farms to surface waters. A “phosphorus index for site evaluation” (P-index) provides planners in the New York City Watershed Agricultural Program with a tool for identifying individual farm business, phosphorus related problems, and evaluating solutions. A linear programming model is employed to examine dairy farm resource use and profitability, with the P-index used to impose phosphorus movement constraints. Results indicate dramatic differences in farm resource use and farm business profitability depending on the level of the P-index. Small changes in the target index level result in large shifts in optimal resource use and business profitability. These differences illustrate that restrictions on phosphorus movement from land to surface waters potentially have major impacts on resource use and farm profitability in the New York City Watershed.

This paper analyzes in three contexts the effects of changing economic conditions and varying economic perspectives on the way land is considered in economic doctrine. The first considers agricultural land use where agriculture is connected to the rest of the economy exclusively through input and commodity markets, and when all other parts of the economy are assumed to remain constant. The second connects agriculture to the remainder of the economy by virtue of a shared natural environment, facilitating a discussion of natural resource and environmental economics in relation to agricultural, institutional, and land economics. The third context permits economic change in the entire economy with particular attention given to population density, space, and distance. Private and public decision making are discussed with attention to federal, state, and local division of powers.

The USDA's Market Access Program (formerly Market Promotion Program) recently underwent a major change to redirect all branded products export promotion funds to small domestic firms and cooperatives. The redirection responded to criticisms by the General Accounting Office of past allocations of branded products export promotion funds to large, experienced exporters. This study uses a firm-level analysis to examine whether firm size and export experience matter in how effectively firms use the promotion funds to increase their revenues. The results support neither the GAO criticisms nor the recent program redirection.

Differential property tax policy for farmland is often set under conditions of uncertainty and limited information regarding landowners’ objective functions. This study examines optimal differential tax policy for a parcel of agricultural land facing uncertain development, identifying instances in which common farmland taxation policies may be non-optimal. Optimal tax rates are characterized given three possible causes of uncertain development: exogenous offers from developers, tax-related reductions in landowner wealth, and a combination of these factors. Model results indicate that underlying causes of uncertain development are critical when seeking to assess the optimality of differential taxation policies, and the use of a single, time-invariant differential tax levy is rarely optimal given uncertain development.

Using a unique spatial database, a hedonic model is developed to estimate the value to nearby residents of open space purchased through agricultural preservation programs in three Maryland counties. After correcting for endogeneity and spatial autocorrelation, the estimated coefficients are used to calculate the potential changes in housing values for a given change in neighborhood open space following an agricultural easement purchase. Then, using the current residential property tax for each parcel, the expected increase in county tax revenue is computed and this revenue is compared to the cost of preserving the lands.

This paper jointly models a landowner's decision to develop a parcel and the option to enroll that parcel in a current use assessment program. The analytical results highlight different factors that influence the effectiveness of a current use program in delaying development. The results also underscore the difficulty a local government might have in influencing the behavior of the landowner. Except for altering eligibility rules, a local government employing current use assessment has but two policy tools: a penalty for development and the property tax rate.

This study extends the joint estimation of revealed and stated preference data literature by accounting for truncation in the revealed preference data. The analytical model and estimation procedure are used to estimate the value of recreational red snapper fishing in the Gulf of Mexico. This recreational red snapper valuation is decomposed into its direct and indirect components. As expected, the value of recreational red snapper fishing using the joint revealed-stated preference model proposed in this analysis is bracketed on the upper limit by the value obtained using the contingent valuation method and on the lower limit by the travel cost method. The results also indicate that the joint model improves the precision of estimated recreational red snapper valuation.

A key issue in the design of land use policy is how to integrate information about spatially variable biophysical and economic conditions into a cost-effective conservation plan. Using common biophysical scoring methods, in combination with economic data and simple optimization methods, an illustration is provided for how to identify a set of priority land parcels for conservation investment. This study also demonstrates a way in which conservation agencies can incorporate concerns about biophysical thresholds in the identification of their priority land parcels. These methods are applied using Geographic Information System data from a New York conservation easement acquisition initiative for water quality protection.

In Japan, a large U.S. export market, there has been growing public opposition against genetically modified (GM) foods. Using a dichotomous choice contingent valuation method, findings show the discount needed for Japanese Seikyou consumers to purchase GM food products is positively affected (i.e., a greater discount is required) by higher levels of self-reported risk perceptions toward GM food, higher levels of concern about food safety and the environment, higher self-reported knowledge about biotechnology, education levels, and income. Interestingly, gender does not significantly affect the discount needed for GM food. Further, it can be inferred from the results that a transformation of Japanese consumers’ perceptions and attitudes is needed for GM food products to successfully enter the Japanese market.

The rural public may not only be concerned with the consequences of land management; residents may also have systematic preferences for policy instruments applied to management goals. Preferences for outcomes do not necessarily imply matching support for the underlying policy process. This study assesses relationships among support for elements of the policy process and preferences for management outcomes. Preferences are examined within the context of alternative proposals to manage growth and conserve landscape attributes in southern New England. Results are based on (a) stated preferences estimated from a multi-attribute contingent choice survey of rural residents, and (b) Likert-scale assessment of strength of support for land use policy tools. Findings indicate general but not universal correlation among policy support indicators and preferences for associated land use outcomes, but also confirm the suspicion that policy support and land use preference may not always coincide.

Hedgers located far from organized commodity exchanges suffer a mismatch between their local prices and exchange prices. Futures and options traded on the exchange may still be valuable to distant hedgers, but only to the extent that basis risk is small. Forward contracting allows hedgers to manage risk using a local delivery price, but the Commodity Futures Trading Commission has long banned the sale of off-exchange options, limiting the opportunities available to hedgers. Recently, agricultural trade options (ATOs) have been introduced as over-the-counter option products designed specifically for hedgers. To date, ATOs have found little interest from potential sellers, but the potential demand for these options may be substantial. This study develops a methodology for measuring the potential value of ATOs. It describes and quantifies the demand for corn ATOs by dairy farms in Pennsylvania and estimates the value these farms might place on ATO contracts offered locally.

This study examines the factors that determine the likelihood of submitting a potentially fraudulent prevented planting claim. A theoretical model is developed and the theoretical predictions are empirically verified by utilizing a binary choice model and crop insurance data from the southern United States. The empirical results show that insured producers with higher prevented planting coverage, lower dollar value of expected yield, and a history of submitting prevented planting claims are more likely to submit an anomalous prevented planting claim. The empirical model also suggests revenue insurance plans may be more vulnerable to prevented planting fraud than the traditional yield-based insurance plan. Results of this study can be valuable to compliance offices in their efforts to find “indicators” of fraudulent behavior in crop insurance, especially with regard to prevented planting.

As many local and state governments in the United States grapple with increasing growth pressures, the need to understand the economic and institutional factors underlying these pressures has taken on added urgency. From an economic perspective, individual land use decisions play a central role in the manifestation of growth pressures, as changes in land use pattern are the cumulative result of numerous individual decisions regarding the use of lands. In this study, the issue of growth management is addressed by developing a spatially disaggregated, microeconomic model of land conversion decisions suitable for describing residential land use change at the rural-urban fringe. The model employs parcel-level data on land use in Calvert County, Maryland, a rapidly growing rural-urban fringe county. A probabilistic model of residential land use change is estimated using a duration model, and the parameter estimates are employed to simulate possible future growth scenarios under alternative growth management scenarios. Results suggest that “smart growth” objectives are best met when policies aimed at concentrating growth in target areas are implemented in tandem with policies designed to preserve rural or open space lands.

This study examines several aspects of the Environmental Horticulture Industry (EHI) in the northeastern United States. First, the EHI is compared to other agricultural sectors in the region. The sector's growth is found to far outpace growth in traditionally important crops and commodities. The study then takes a closer look at the EHI in Pennsylvania, utilizing survey data and the IMPLAN input-output model to estimate the overall economic contributions of the industry to the state's economy. Results suggest that the EHI generates nearly $3.3 billion in value-added and more than 107,000 state jobs through direct, indirect, and induced effects. Finally, survey data are used to identify and discuss important issues that land grant universities throughout the Northeast can address as they seek to strengthen the sector.

Economists increasingly face opportunities to collaborate with ecologists on landscape-level analyses of socioeconomic and ecological processes. This often calls for developing empirical models to project land use change as input into ecological models. Providing ecologists with the land use information they desire can present many challenges regarding data, modeling, and econometrics. This paper provides an overview of the relatively recent adaptation of economics-based land use modeling methods toward greater spatial specificity desired in integrated research with ecologists. Practical issues presented by data, modeling, and econometrics are highlighted, followed by an example based on a multidisciplinary landscape-level analysis in Oregon's Coast Range mountains.

The multifunctional set of services provided by farmland complicates the task of identifying which farmland should be preserved. For this reason many states and local governments establish criteria to rank and select parcels of farmland for protection. This study examines whether criteria commonly used by state programs to guide purchases of agricultural conservation easements influence public demand for farmland preservation. The results provide policy makers with additional information to assess current ranking criteria that set the standard for farmland preservation.

Ongoing farmland loss has led county planners to ask “is there a critical mass of farmland needed?” to retain a viable agricultural sector. This study examines whether counties lost farmland at a faster rate if the number of agricultural acres fell below a critical threshold. Results from six Mid-Atlantic states over the period 1949 to 1997 indicate that counties with fewer agricultural acres lost farmland at a faster rate. However, after splitting the study period into two time segments (1949–1978 and 1978–1997) and modeling separately, this result was not found for the later time period, suggesting a uniform critical mass level may not exist. Population growth in a county accelerated farmland loss over all time periods.