Theses and Dissertations from UMD
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Item ESSAYS ON THE ECONOMETRIC ANALYSIS OF U.S. AGRICULTURE(2014) Uchida, Shinsuke; Lichtenberg, Erik; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation consists of three essays empirically investigating three important aspects of the U.S. agriculture: conservation, subsidy, and productivity. Each essay is conducted with the U.S. Census of Agriculture micro file data. Availability of cross-sectional and time variations of detailed individual farm production and demographic characteristics allows for uncovering heterogeneous relationships between farm production decisions and the corresponding aspects of U.S. agriculture. The first essay examines an adverse effect of a cropland retirement policy. A cropland retirement policy contributes to the reduction of environmental externalities from agricultural production such as soil erosion, nutrient runoff and loss of wildlife habitat. On the other hand, participant's potential adverse behavior could undermine the environmental benefits of the policy. Several sources of such an unintended effect, known as ``slippage'', have been conceptually identified, but their empirical evidence has been scarce. This article tests one source of slippage caused by in-farm land substitution from noncropland to cropland as a result of farmland retirement in the U.S. Conservation Reserve Program (CRP). The causal relationship of CRP participation and subsequent slippage through in-farm land substitution is identified by employing farm fixed effects, time-varying county fixed effects, and selection-on-observables. These could eliminate effects of unobservables that are potentially correlated with both the program participation and subsequent farmland reallocation decisions. Overall, slippage seems evident and fairly robust among specifications. It is found that an average program participant converts 14% of noncropland to cropping activities after enrollment. Results further show that participants with a larger share of uncropped land contribute more to slippage, indicating that farms with the excess capacity of conversion are more flexible in the land allocation decision and thus likely to give rise to slippage. This suggests that additional restrictions on the rest of land use for participants and/or introduction of penalty points reflecting the share of noncropland in the current auction mechanism can hinder such a backward incentive offsetting the program benefits. The second essay examines the distortionary effects of agricultural policy on farm productivity by examining the response of U.S. tobacco farmers' productivity to the quota buyout of 2004. We focus on the impact of distortionary policy, i.e., the tobacco quota, by decomposing aggregate productivity growth into the contribution of farm-level productivity growth and the contribution of reallocation of resources among tobacco growers. We find that the aggregate productivity of Kentucky tobacco farms grew 44% between 2002 and 2007. The elimination of quota rental costs and reallocation of resources, including entry and exit, accounted for most of the post-buyout productivity growth. It is also noted that the aggregate productivity of Kentucky tobacco farms vary across farm characteristics and locations. This highlights the importance of using highly disaggregated data to uncover the sources of aggregate productivity growth. The third essay examines the relationship between farm size and productivity growth. In the past several decades, crop production in the U.S. has shifted to larger farms. During the same period, crop productivity has fairly improved. While these two events seem clearly associated, no studies have fully uncovered the link between them. Using farm-level longitudinal data from the Censuses of Agriculture from 1987-2007 enables us to decompose aggregate productivity growth (APG) by farm size, but also by farm entry/exit and by technology/reallocation. We have three main findings. First, productivity growth is clearly non-uniform among farm sizes. Between 1987 and 2007, virtually all of the aggregate productivity growth of crop farms came from farms with annual sales of more than $500,000. These farms account for only 8% of U.S. crop farms. A closer look at the APG contributions to productivity growth from surviving farms confirms the findings for all crop farms: the productivity of mid-size farms has barely increased, and the productivity of smaller farms has fallen. Finally, the relative importance of technical efficiency growth and resource reallocation varies over time. Technical efficiency growth seems to be a larger source of APG for large farms between 1987 and 1997, whereas reallocation across all sales classes contributes more to APG between 1997 and 2007. Overall, our finding provides the concrete evidence that farm consolidation has been strongly associated with the productivity growth of U.S. crop farms. Our finding that resource reallocation through farm consolidation is nontrivial for the APG of crop farms highlights the usefulness of farm-level panel data for studying structural changes and APG.Item The Impact of Conservation Easements on Habitat Loss in Agricultural Regions(2012) Braza, Mark Anthony; Chen, Alexander; Urban and Regional Planning and Design; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Natural lands provide irreplaceable ecosystem services, such as wildlife habitat, water filtration and carbon sequestration, but in many regions, they are rapidly being converted to agricultural or urban uses. To counteract this trend, numerous land conservation programs purchase natural land but the impact of these programs is almost entirely unknown. This dissertation develops a framework for evaluating the impact of land conservation programs that incorporates theory from land economics and conservation planning. It posits that private land that enrolls in these programs will have lower economic value and higher ecological value than unenrolled lands. To test the framework, a Propensity Score Analysis is conducted for a federal conservation easement program in the northern plains of the United States. Measures of key economic characteristics (such as a tract's soil productivity, slope and distance to grain markets) and key ecological characteristics (such as a tract's accessibility to nesting pairs of migratory birds and the extent of grassland coverage surrounding a tract) are computed in a Geographic Information System. These measures are used to estimate a logistic regression model that predicts the probability that a tract of land enrolled in the program between 1990 and 2001. Consistent with expectations, tracts with lower economic value and with higher ecological value were more likely to enroll in the program. Using the predicted values from this model, enrolled tracts were matched with control tracts using four specifications of nearest neighbor matching with calipers. Under each of these specifications, the rate of grassland conversion between 2001 and 2006 on enrolled tracts was significantly lower (p<.0001) than the rate of conversion on control tracts by between 0.32 percent (for the specification with the lowest estimate) and 0.42 percent (for the specification with the highest estimate). These results indicate that the program did have a statistically significant impact on the rate of grassland conversion during this time period, although the impact was substantively slight.