The authors give a brief history of National and State wetland legislation. 

 This history nicely illustrates the broad premise that attaining the social goal 

 of wetlands preservation has gained ascendancy over the competing goal of using 

 the (wetland) land base of the Nation to maximize the private pecuniary returns 

 from various development activities. 



Batie and Cox point out that the various permitting programs of the U.S. 

 (Section 404 of the Federal Water Pollution Control Act Amendments of 1972) and 

 the States of Virginia and Maryland have social costs (private development 

 activity foregone) as well as important social benefits. They use site-specific 

 examples to show that there are trade-offs between development and preservation 

 costs and benefits. They are particularly concerned with the loss of economic 

 activity from the restriction of beach-front building activity in Virginia and 

 Maryland after the enactment of recent regulatory permitting programs. They 

 suggest that a development potential wetland classification system might play 

 a role in obtainirig the optimal social mix of wetland preservation and 

 development. 



14. Brown, R.J. 1976. A study of the wetlands easement program on agricul- 

 tural land values. Land Economics 52(4) :509-517. 



This paper discusses the effects of the easement purchase program of the 

 U.S. Fish and Wildlife Service on farmland prices in five counties in North 

 Dakota, and four in South Dakota. The easement purchases discussed here are 

 permanent; some authors use the term "easement payment" to describe the annual 

 rental fee that the Government pays the farmer to forego wetland drainage 

 regardless of the duration of the leasing arrangement. 



When farmland for which a permanent easement lease exists is sold, the new 

 owner is not able to drain the land that is under easement. Thus the potential 

 productivity of the land (for farm outputs) is diminished by the easement 

 agreement. This should and does show up as a statistically significant factor 

 underlying the variation in farmland prices. In fact, when the loss in earnings 

 from easement arrangements is important (the land has high earnings potential 

 and productivity), the earnings foregone are fully deducted from the price of 

 farmland. These rough calculations are made possible by drainage cost estimate,s 

 provided by various experts. The author uses a value of $17 per annum per acre 

 as a representative easement fee value in investigating the optimal allocation 

 (habitat provision for migratory waterfowl or farmland) of prairie pothole 

 wetlands. At this easement fee price, if the drained farmland has a market value 

 of less than $393 per acre, the land should remained unconverted if it is to 

 provide the maximum social benefits. Hammack and Brown (see [10]) estimated that 

 at a price as high as $17 per acre per annum the socially optimal allocation of 

 wetlands called for an expansion of wetland acreage that is roughly five times 

 the historical average. 



15. Carriker, R.R. 1976. Economic incentives for institutional change: the 

 case of the Virginia wetlands act. Ph.D. Thesis. Virginia Polytechnic 

 Institute and State University, Blacksburg. 153 pp. 



This is an interesting attempt to show that wetlands preservations benefits 

 exhibit increasing returns; the social benefits conferred per unit of wetland 



20 



