1 RURAL AMENITIES and FARMLAND VALUES

By Larry Libby and Elena G. Irwin Introduction Farmland value reflects the economic returns from the various products and services available from that land. Buyers and sellers agree on a price that captures expected income from the relevant outputs. Among the farmland services are certain amenities, some of which the landowner may withhold from non-payers and others for which exclusion costs are very high. This paper considers the economic importance of both categories of amenity services of actively farmed land -those that are private goods, captured by the owner and priced for sale to consumers, and public goods that are non-exclusive and/or non-rival in consumption and whose values are not reflected in market price. Included in the former category are hunting rights, onfarm recreation, farmers markets and certain landscape features that may make one parcel of land more valuable than another. In the latter category are such eco-system services as groundwater recharge, nutrient cycling, reduced flood risk and the overall cultural or Aheritage value@ of farms in a rural setting. Both categories of land service are important and will affect land use patterns, but only private goods are directly exchanged in a market. Public good services of privately