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To Invest or Sell? The Impacts of Ontario’s Greenbelt on Farm Exit and Investment Decisions

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  • Na Li
  • Richard J. Vyn
  • Ken McEwan

Abstract

This article examines the impact that Ontario’s Greenbelt legislation, a farmland preservation policy implemented in 2005 that permanently protects over 1.8 million acres of land from non-agricultural development, has on farmers’ exit and investment decisions. There are conflicting hypotheses regarding the impacts that farmland preservation could have on farmers’ management decisions with respect to investment or disinvestment, and there is a lack of evidence in the literature regarding the nature of such impacts. To address this issue, this article uses a farm-level panel data set to estimate the impacts of the Greenbelt policy on farm exit and on farm investment. The Greenbelt policy is found to have influenced both farm exit and farm investment decisions, with the impact varying depending on location within the Greenbelt. In particular, the results indicate evidence of a negative impact on farm investment, which is contrary to one of the objectives of the Greenbelt policy.

Suggested Citation

  • Na Li & Richard J. Vyn & Ken McEwan, 2016. "To Invest or Sell? The Impacts of Ontario’s Greenbelt on Farm Exit and Investment Decisions," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(3), pages 389-412.
    • Handle: RePEc:oup:apecpp:v:38:y:2016:i:3:p:389-412.
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    File URL: http://hdl.handle.net/10.1093/aepp/ppw017
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    Cited by:

    1. Frimpong, Eugene & Petrolia, Daniel & Harri, Ardian, 2018. "Does the Community Rating System Work? Evidence from Two Gulf Coast States," Working Papers 273014, Mississippi State University, Department of Agricultural Economics.

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