Direct Payments and Land Rents: Evidence from New Member States

Herck, Kristine Van; Vranken, Liesbet

doi:10.2139/ssrn.2329931

Cited by 12 publications

(10 citation statements)

References 25 publications

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“…It is also important to capitalize subsidies in the price of land. This is particularly important in the new EU member states where there are no so-called historical area payment entitlements [51]. In addition, the assets are seen in terms of current choices to a lesser extent than income.…”

Section: Discussionmentioning

confidence: 99%

The Objectives of Farm Operations—Evidence from a Region in Poland

Grzelak

2020

Agriculture

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The objectives set by agricultural producers directly translate into the directions of the development of farms. What is particularly important: Is there a conflict between the economic and environmental objectives of farm operations? This issue is not resolved in the literature on the subject and still is a challenge for policymakers. The main aim of the article is to identify the preferences of farm managers concerning the objectives of farm operations, as well as to examine their mutual relations. The article employs the results of surveys carried out on farms from the Wielkopolska region (Poland). The analysis of Spearman’s rank, cluster analysis, also the classification tree method, and multidimensional scaling were applied. The research shows that the relations between the income and assets objective turned out to be moderate in terms of strength, while the environmental objective turned out to be statistically insignificant related to economic objectives (in the context of their perception by respondents). There are differences in this respect, including also a group of the respondents in which income and environmental objectives have been ranked simultaneously high. It is, however, difficult to state clearly whether there is a complementarity between the income and the environmental objective from the perspective of perception by respondents. Although when the context of the real action is taken into account then the answer should be positive. Therefore, there is a gap between the farmers’ perception of reality—choice of the hierarchy of objectives, and the real activities, e.g., in terms of pro-environmental activities. It is a new issue that points to the need to stimulate the environmental objective, in particular, through support at the level of agricultural policy instruments.

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Section: Discussionmentioning

confidence: 99%

The Objectives of Farm Operations—Evidence from a Region in Poland

Grzelak

2020

Agriculture

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“…On the contrary, the reduction of the subsidy led to a fall in the price of the land [17]. The positive impact of agricultural policy on the increase of the price of land and land rental prices confirmed the result of much research [5,[17][18][19][20][21][22][23]. In spite of this fact, in less productive new member states, the adoption of a flat rate did not affect the land rental income of landowners [24].…”

Section: Introductionmentioning

confidence: 67%

“…The models explain almost 60% of the variability in land rental prices (adjusted R-square). Many studies confirm that the agricultural policy has a positive impact on the growth of land prices as well as land rental prices [18][19][20][21][22][23]. However, experts recommend that it is better to rely on land rent, rather than land transfer [17].…”

Section: Resultsmentioning

confidence: 99%

The Factors Affecting Farmland Rental Prices in Slovakia

Takáč

Lazíková

Rumanovská

et al. 2020

Land

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Agricultural land is a limited natural resource with increasing economic value. This study analyses land rental relationships in Slovakia, including legal rental regulations, and identifies the impact of certain factors, such as the European Union Common Agricultural Policy (CAP) payments, and geographical and economic factors on land rental prices. From the results of econometric models, it was found that certain CAP payments have an effect on rental prices, mainly the single area payment scheme (SAPS), payments for agri-environmental-climate schemes (AECS), and animal welfare, which were found to have positive effects. Other important factors found to influence rental prices are economic indicators (such as total revenue share of total costs, share of revenue from agricultural production in terms of total revenue, share of production costs as a percentage of total costs, wages, and number of employees) and geographical factors (such as region or partial production areas). However, the distance of the farm from the district city (LAU 1) and the share of farmland affected by natural constraints do not considerably affect rental prices in Slovakia. Land consolidation is a statistically significant factor according to the models; however, its impact is almost zero. Knowledge of these factors constitutes important know-how, not only for policy makers but also for the actors operating in the land rental market (e.g., landlords, tenants, experts on land valuation, and real estate agents).

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“…In the NMS, credit and capital market imperfections play a crucial role in the efficiency of the rural land market, especially for sales transactions. Capital market imperfections may hamper the efficiency of land sales and hence the overall performance of the agricultural market in several ways (Swinnen and Vranken, 2009;Ciaian and Swinnen, 2009;Van Herck et al, 2011). First, where capital markets work imperfectly, land purchases typically have to be financed from own resources.…”

Section: List Of Tablesmentioning

confidence: 99%

Structural and financial risks of land capitalization: lessons of domestic history

Небрат¹,

Gorditsa²,

Gorin³

2020

Ekon. prognozuvannâ

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The article is devoted to the problem of the relationship between expected results and real institutional, structural, and financial consequences of agrarian reforms aimed at the capitalization of land. The purpose of the publication is to summarize the positive and negative experience of the peasant reform of 1861 on changes in the relations of ownership and land use in the budgetary and financial sphere and foreign economic activity. Research is based on the history-institutional methodology using tools of economic comparability, retrospective analysis, and historical reconstruction. It is defined that the opening of the land market and the creation of a system of mortgage land loans allowed to increase the share of private land ownership of peasants, but did not turn them into effective owners and did not solve the problem of peasant land. Rising land prices contributed to the development of land speculation and increased rents, encouraging the farmers to predatory land use and depletion of soils without increasing productivity. The capitalization of land and the expansion of the hired labor market contributed to economic growth, increased government revenues and expenditures, and overcame the chronic state budget deficit. At the same time, the credit indebtedness of peasants grew, while ransom payments depleted peasant farms, reducing the potential for capital formation and investment. The public policy of forcing grain exports and supporting large agribusiness allowed to replenish the gold reserves of the treasury, but also led to the impoverishment of farmers, reduced quality of the exported grain, increased share of fodder crops, and lower share of food crops and finished goods. Intensified international competition to expand the supply of cheap grain led to lower prices, weaker competitive position of domestic exporters, and the growing dependence of the economy on world markets for agricultural products, and the local agrarian business - on foreign capital. The article provides recommendations to the government about taking into account the historical experience in the implementation of modern agrarian transformations, in particular, comprehensive support for farming as the main link of agricultural production and the guarantor of food security of the country. Their implementation will help prevent the risks of over-concentration of land, the proletarianization of the peasantry and its mass migration to cities and abroad, growing environmental problems, and vulnerability of the economy due to increasing dependence on the world markets for agricultural raw materials.

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Direct Payments and Land Rents: Evidence from New Member States

Abstract: This paper analyses the impact of increasing direct payments on land rents in six new

Cited by 12 publications

References 25 publications

The Objectives of Farm Operations—Evidence from a Region in Poland

The Objectives of Farm Operations—Evidence from a Region in Poland

The Factors Affecting Farmland Rental Prices in Slovakia

Structural and financial risks of land capitalization: lessons of domestic history

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