The effect of organic certification on farmland value

Abstract

This research considers the relationship between organic certification and farmland values. We employ the ARMS survey data from 2003 to 2011. We construct three models with different organic status classifications. We control for differences in farm type, NASS crop district, urbanization, and year fixed effects. We find that organic certification has a significant (statistically and economically) effect on farmland value. Our model suggests that a 1 percentage point increase in a farm's organic land would result a 0.23 percentage point increase in the farmland rental rate.