Diversity of Practical Quota Systems for Farmland Preservation: A Multicountry Comparison and Analysis

Abstract

Diverse quota systems are designed and implemented in different countries to preserve farmland. Choosing a quota system for farmland preservation is thus an important issue for policy makers and researchers. In order to explain this diversity and reveal shared principles for the choice of a quota system in practice, we compare typical quota arrangements in four countries through a model of transaction cost economics (TCE). We examine agricultural zoning in the Netherlands, the transferable development right in the US, command-and-control quotas and their supplemented trading mode in China, and the debated tradable planning permits for land-use control in Germany. Our comparison not only shows that extending TCE into tradable quota theory is feasible, but also compares experience with the tools of farmland preservation across the four countries. Furthermore, the shared principles we discover could also be reference points for the rest of the world.