Influence of Soil Conservation on Farm Land Values

Worldwide concern for loss of agricultural soil has led many governments to establish programs to slow loss of soil from farms. McConnell (1983) has shown, however, that, in absence of externalities, farmer decisions on investment to reduce onfarm soil loss can be socially optimal and concludes (p. 188) as follows: increasing soil loss does not imply that farmers ignore physical production relations .... if farmers know that soil base affects farm resale value, they will conserve it. . . . It suggests that impact of soil depth on value of farms be investigated. Earlier, Rausser (1980) reached a similar conclusion, suggesting that land values which fail to reflect soil quality encourage farmer to ignore his long-run impact on resource. Two recent studies failed to find clear-cut relationships between soil erosion and farm land prices. Ervin and Mill (1985, 942), in a cross-section study of farm land prices in Page County, Iowa, concluded, the group of variables measuring past and future erosion damages and conservation structures did not exhibit large and reliable effects. Gardner and Barrows (1985) studied capitalization of value of soil conservation practices into farm land prices in southwestern Wisconsin and concluded (p. 946), The most reasonable conclusion is most obvious-conservation