Land tenure and conservation in agriculture: Evidence from United States farm-level data

Abstract

The adoption of conservation practices on working farmland has proven effective in mitigating environmental externalities created by agricultural production. The widespread use of these practices, among other factors, depends on the private benefits and costs associated with them, as well as the timing of the outcomes. Around 40 % of all farmland acres in the U.S. are rented by operators who do not own them. In theory, renters facing tenure insecurity, higher discount rates, and shorter planning horizons may be less inclined to adopt conservation. In this paper, we empirically investigate whether the adoption of conservation tillage practices and cover crops differs among producers with different land tenure. Specifically, we use operation-level data from the Census of Agriculture to assess the effect of land tenure and several producer-level characteristics on conservation adoption. We find that owners adopt no-till practices at higher rates relative to renters, but the adoption rates of reduced-tillage and cover crops are, on average, higher among renters compared to owners. We show that these differences are most pronounced among small and medium-sized farms, and the impact of tenure becomes statistically insignificant in larger operations. Additionally, we find evidence that cash rental arrangements may positively influence conservation adoption among renters relative to share lease contracts. Our results have important implications for the design of conservation programs. Our findings do not fully support arguments suggesting that policies increasing the proportion of owner-operated cropland or incentivizing share-rental arrangements might increase the adoption of all conservation practices among producers, or that renters and owners should be treated differently from the policy perspective.