ABSTRACT
Many countries are concerned about the preservation of agricultural land and have a variety of programmes in place to promote its protection. The reasons for preserving farmland are varied and multifaceted (Kline and Wichelns, 1996). People who live in areas with a rich agricultural history may be primarily interested in safeguarding their rural identity and agricultural heritage, while others are concerned about food security, food safety or the adverse environmental impacts of buying food from other places. Apart from agrarian concerns, many also view local farmland preservation as being important for the environmental amenities it provides, including open space, wildlife habitat, groundwater recharge and flood mitigation, and its role as a buffer against urban sprawl; indeed, some see farmland protection as a means to slow growth and restrict development (Bergstrom et al, 1985). Because agricultural land provides many externality benefits that are not efficiently transacted in existing markets, it is often undervalued and undersupplied. Meanwhile, the financial returns from development greatly exceed those from agriculture, which widens the gap between the marginal private benefit of farmland preservation and that of development. Not surprisingly, a range of regulatory and market-based policies are used to encourage the retention of land in agricultural activities, particularly near urban areas.
