Reconceptualizing Farmland Tenure Contracts for a Greener Tomorrow

Abstract

Conventional wisdom suggests that land tenure security plays a fundamental role in whether or not farmers adopt conservation practices. The thinking goes that farmers who lease as opposed to own land are disincentivized from employing potentially costly and risky practices that promote the long-term productivity and value of the land on which they farm because they have no assurances that the long-term benefits of such practices will accrue to them given the short timeframe of most leases. I seek to explore whether there is indeed a relationship between land tenure and the adoption of two soil-conservation practices, cover cropping and no-tillage, by evaluating county-level data from the 2012 and 2017 Agricultural Census, data from the Environmental Working Group, and remote sensing data called OpTIS on tillage and cover crop practices in the Corn Belt. Using predictive mean matching to impute missing values, I evaluated the relationship between land tenure and the adoption of conservation practices through both multivariate linear and probability unit regression models. In accordance with my hypothesis, I found statistically significant evidence to show that the prevalence of rental activity is associated with a linear decline in the percentage of acres on which cover crops and no-tillage are adopted as defined by USDA survey-data and no-tillage as defined by OpTIS. I found no relationship between rental activity and the adoption cover crops as defined by OpTIS. In addition, I found evidence to suggest that greater frequency of rental cropland increases the probability that adoption of both USDA-defined and OpTIS-specified no-tillage is below-average in a given county. I found no such statistically significant change in probability for the adoption of cover cropping. The consistency of the linear findings, their strong magnitude, and their statistical significance all offer a promising addition to the existing quantitative scholarship on this issue, much of which is inconclusive. After finding quantitative evidence to support my hypothesis, I evaluated qualitative research on the topic and interviewed several individuals in the agriculture sector to help inform how best to tackle the issue of the tenure effect on the adoption of soil conservation practices. As it stands, the costs and risks of adoption are shouldered primarily by tenants while the benefits, like increased organic matter in the soil and sequestration of carbon dioxide, accrue mainly to landowners and society at large. I found that a redistribution of risk and cost between tenants and operators and tenants and society is necessary to create a positive incentive structure in which tenants will be more likely to adopt conservation practices. I suggest that tenants be compensated for risk and costs by operators through cost-sharing, longer lease terms, and flexible lease arrangements. I suggest that tenants be compensated by society through increased funding of conservation programs like EQIP and the implementation of a carbon banking system that will pay farmers for the additional carbon sequestered through conservation practices.