*6.4. Land Allocation*

The estimated coefficients from MLMs for land allocation of corn and soybeans are presented in Table 5. The results are shown compared to groundwater use, water uses from on-, off-farm surface only and more sources have a positive effect on land allocation to corn planting. While water from more sources increases the planting of both crops.


**Table 5.** The results of multilevel models for the land allocation for corn and soybean.

Significance levels: \* 10%; \*\* 5%; \*\*\* 1%.

Surface water price does not affect land allocation, which is consistent with the expectations as the decision on how much land allocated to grow a crop is made mainly depending on the expected crop price and input costs with little consideration of water price, while energy expenses as a proxy of groundwater price increase corn planting and decrease soybean planting. Higher facility expenses increase corn planting as more acres can be irrigated.

Regarding farm characteristics, more wells on a farm increase the planting of both crops. Larger areas of cropland increase the land allocation for both crops. Federal assistance on farm irrigation and drainage management has a negative effect on soybean planting. Unfortunately, land tenure and the adoption of pressure irrigation systems do not have a significant effect on land allocation for both crops.

Regarding barriers to improvements, uncertainties about future water availability have a negative effect on corn planting, and not enough to recover implementation costs has a positive effect. For soybean, landlords not sharing improvements costs has a negative effect on soybean planting, while investigating improvement is not a priority shows a positive effect. While positive effects are unexpected, a comparison of the negative effects on the two crops indicates that corn farmers are more concerned with future uncertainties, and soybean farmers with the share of improvement costs.

Information from extension agents and neighboring farmers decreases the planting of corn and soybean planting is also negatively affected by the information from extension agents, while information from private irrigation specialists increases the planting of corn. These findings indicate the effectiveness of extension programs in promoting the growth of water-conserving crops.

At the state level, the precipitation change in 2013 is negatively associated with corn planting. Both the precipitation change and temperature change are positively associated with soybean acreage. These findings suggest that given climate variability, a lower water available for crop production probably promotes farmers growing more water-conserving crops (in this case, soybeans), and vice versa. Compared with Plains farmers, those in the Midwestern, Southern and Atlantic states are more likely to plant corn, while farmers in the Southern states are less likely to plant soybeans.
