THE RELATIONSHIP BETWEEN FARM SIZE AND FARMER OPPORTUNITIES TO PROFIT FROM NATURAL RESOURCES ON THEIR LAND

Our research will focus on a key predicament facing small and medium-sized farms. On one hand, diversifying their income streams by participating in natural resource development or conservation projects may be critical for their business survival. On the other hand, small farmers are not well positioned to capitalize on these opportunities, which include leasing land for wind energy, transmission lines, or outdoor recreation and putting conservation easements on their land. This is because most projects of this type require a contiguous area of minimum size and therefore favor large farms. The overall objective of our project is to quantify the conditions under which small farm size is a barrier to supplementary sources of income and to identify approaches and policies that will help small farmers overcome the barriers. We will achieve this broad goal by pursuing a set of narrower of objectives:1) Develop economic theory to establish a coherent economic rationale for why resource developers and conservationists favor large farms over small farms.2) Quantify the effects of farm size on farmer participation in resource and conservation projects and isolate the extent to which the effects are driven by policy incentives versus economic fundamentals versus farmer preferences.3) Inventory incentives created by local, state, and federal policies that favor large farms for resource development and conservation, often indirectly and unintentionally.4) Describe new policies that could improve participation among small and medium-sized farms.