An Examination of the Adoption of Conservation Practices on Owned and Rented Farmland in Ontario and Manitoba

Abstract

Approximately 40% of farmland is rented in Canada (Statistics Canada, 2011). It is therefore necessary to understand the influence farmland ownership has on the adoption of conservation practice by a farmer. Previous research on this issue however has yielded conflicting results. This conflict in literature can be potentially explained by the differences in the present value of expected returns across conservation practices. The adoption of cover crops, for example, involves a tradeoff between costs which occur in the short term and increases in the productivity of the land which occur in the longer term. On the other hand, the adoption of conservation tillage could be profitable in the short-term once the farmer has acquired the machinery. This study uses a unique dataset to examine the decision to adopt a conservation practice for the same farmer on owned and rented land. A Linear Probability Model with fixed effects was used to analyze the dataset. Tenure status was not found to be a statistically significant factor for the adoption of conservation tillage. However, the adoption of cover crops was found to be significantly higher on owned land. The results from this study suggest that the influence of tenure status can vary depending on the present value of expected returns associated with the conservation practice.