Land Quality and Diversion Decisions Under U.S. Commodity Programs
Babcock, Bruce A.; Foster, William E.; Hoag, Dana L.
Review of Agricultural Economics Vol. 15 (1993): 467-476.
Field level distributions of land quality are used to explain diversion decisions under U.S. commodity programs. Regression results for North Carolina indicate that differences in the yield potential of soils may influence the opportunity costs of land diversions. These effects increase with farm size. For large farms, a decrease in mean soil quality on a field relative to the farm mean or an increase in the coefficient of variation of quality within a field increases the proportion of land diverted within a field. There is no evidence that small farmers respond to land quality distributions in making diversion decisions.