AbstractUrban pressures on farm real estate taxes have led, in the last decade, to adoption of differential assessment of farmland in at least 16 states. Broadly speaking, the laws fall into three categories: Preferential assessment, deferred taxation, and restrictive agreements. The laws are analyzed both from the standpoint of tax policy and from the standpoint of development policy. In neither case is it possible, given the present state of knowledge, to conclude firmly that the laws are desirable or undesirable. The analysis does, however, suggest a number of potential problems which should be analyzed before decisions are made.