Land is an important resource for agriculture production and urban development. The allocation of land use influences the supply of agricultural products and environmental quality. This paper investigates the impacts of government payments on agricultural land use allocation in the Southeast. We employ the Area Base Model and Multinomial Fractional Logit Model following Hardie and Parks (1997) using county level data from Georgia, Alabama, and Florida rural counties. Preliminary results show that government payments have significant positive impacts on farmland allocation. In particular, for the land enrolled in the CRP program, the effect of government payments is positive and significant, which indicates that these payments are an efficient policy instrument and corroborated previous research. Also, distance to the Atlanta Central Business District is a significant factor in land use allocation in Georgia.