The term “land-use policy” refers to the set of rules and regulations that directly influence the use of farmland, whether they are implemented by national or sub-national governments. Land-use policy provides an alternative mechanism for influencing agricultural land use. Typically, land-use policy has not been seen as a key factor in agriculture. This, in part, reflects the prevailing assumption that the stock of farmland is largely fixed and that, while land use policy might have some impact on the stock of farmland at the local or regional level, it has limited influence on the agricultural sector taken as a whole. By its nature, land-use policy is explicitly spatial in nature. While policies may be designed to deal with broad land-use issues, they have their impact on particular parcels of land.
While there are a few forms of land use policy that employ financial incentives to alter the relative returns to farmers from agriculture and other uses, in most countries the majority of land use policy uses the regulatory power of government to compel land owners to follow particular actions. In this sense, most land use policy is not market-based.
In some OECD countries, the application of land use policies regulating farmland is largely a national matter, while in other countries it is largely a local matter (OECD, 1996a, 1998, 2008a). In some countries, there are strong controls on farmland conversion, while in others there is little to stop farmland being converted to alternative use. For example, while in Canada land regulations generally restrict farm splitting, in Japan, non-agricultural activities are prohibited for land that is designated as farmland-use.
In OECD countries, the concern with regulating farmland is usually limited to the broad definition of agricultural use, and there is no intent to regulate the specific type of agricultural production that takes place. However, in many regions there are prohibitions both on specific types of agricultural land uses and on specific production practices, for example, bans on animal feeding operations in close proximity to high-density residential developments, or on the application of animal manure or fertiliser in ways that lead to high levels of run-off into waterways, are common.
Land-use policy influences agricultural land use in two distinct ways. The first, and most common, way is through either imposing restrictions on farmers’ behaviour, or encouraging specific actions. This type of land-use policies may alter the costs of production, or the revenues from carrying out agricultural production, and thereby influence the viability of the farm enterprise. However, altering the amount of land in agriculture is not the basic premise of such programmes, and for the majority of farmers this type of land-use policy can be thought of as mainly influencing how farmland is to be used.
The second type of policy is designed to influence land use at a larger scale – that is, to affect decisions to either bring land into farming or remove land from farming. Clearly, these policies are most important at the urban and far fringe, where land conversion is a relevant issue. By contrast, farmland in the agricultural core zone is, by definition, hardly affected by these programmes because there is little reason to modify the current land use. These programmes can be thought of as influencing how much land is available for farming. It is this latter class of programmes that is the focus of this part of the report.