The Effect of State Right-To-Farm Laws on Land Use

Since the 1960’s, all states in the United States have enacted Right-to-Farm (“RTF”) statutes. Under these statutes, qualified agricultural activities cannot be deemed as nuisances when certain conditions are met. RTF laws replaced the reasonableness test under nuisance law and reinvigorated the “coming to the nuisance” doctrine. I examine how RTF laws affect a farmer’s incentive to sell land for development and determine land-use allocation. My model shows that more externalities are internalized under nuisance law because it can serve as a gap-filler of private contracts. The manner of farming practices under RTF laws tends to be less friendly to urban use. Therefore, RTF laws will decrease the land value for urban use and encourage agricultural activities. My model predicts that the adoption of RTF laws will lead to more farmland and less urban land.

I empirically test the predictions with the state-level panel data, examining how RTF laws affect the percentages of cropland and urban land in a state. Contrary to my prediction, however, results indicate that RTF laws discourage cropland use over the time, suggesting that RTF laws may reduce transaction costs and encourage farmland conversion for development. But the negative effect of RTF laws on cropland is not robust and no significant effect is found on urban land. In other words, the empirical study may also suggest that RTF laws do not have a significant effect on land use and do not necessarily help preserve farmland.

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