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Land improvements with long pay-back periods are often delayed on leased agricultural land,resulting in social costs through land degradation, decreased land productivity and environmentalproblems. An important question is thus how landowners would respond to regulations andmandates concerning land improvements. Based on a landowner survey, we analyse landownerchoices under certain land improvement regulations, using the currently dominant choice ofleasing land for agricultural use as the benchmark. The results indicated that land leasing willcontinue to increase in the future, but if the landowner mandate to co-finance costly landimprovements is increased, landowners are predicted to respond significantly to these mandatesand search for other land management options. Three heterogeneous landowner groups wereidentified based on their land use choices. Current leasers and amenity owners, in particular, weresensitive to land improvement mandates, and would avoid compulsory investment expenses byselling or afforesting their land.
