The Incidence of Government Program Payments on Agricultural Land Rents: The Challenges of Identification

Roberts, Michael J.; Kirwan, Barrett E.; Hopkins, J. W.

doi:10.1111/1467-8276.00481

Cited by 121 publications

(83 citation statements)

References 5 publications

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“…The elasticity is much higher than the one for payments based on output or on income: 0.89 for pasture plots, 0.61 for garden plots. This figure is in line with studies in the US in the 90es, such as Lence androberts et al (2003), who found an increase of land prices by 0.13 to 0.85 dollars for one more dollar of public support. The fact that one additional unit of payment results in an increase of less than one land price unit was also given evidence by rutherford et al (1990) using a general equilibrium model.…”

Section: Resultssupporting

confidence: 90%

Capitalisation of government support in agricultural land prices in the Czech Republic

Latruffe¹,

Doucha²,

Mouel³

et al. 2008

Agric. Econ. - Czech

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The recent implementation of the CAP Single Area Payments in the EU New Member States raises the question of whether a quick capitalisation of these payments is expected. Capitalisation of public support to agriculture into land prices indicates that the benefits are partly transferred toward landowners rather than toward producers. This distributional aspect is of particular importance in countries where a large proportion of land is farmed by producers who do not own this land. This study investigates the influence of several types of support on Czech agricultural land prices from private transactions between 1995–2001. The past period direct payments have been capitalised at the strongest rate, despite their low level and imperfections on the land market, suggesting that such support is most easily transferred to land values. A continuing capitalisation might threaten the farming activity, as farms are almost only tenanted. And because most of the landowners live in towns, there is a risk of an extreme leakage of support not only outside the farming sector, but also outside the rural sector.

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Section: Resultssupporting

confidence: 90%

Capitalisation of government support in agricultural land prices in the Czech Republic

Latruffe¹,

Doucha²,

Mouel³

et al. 2008

Agric. Econ. - Czech

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show abstract

“…This can be explained by the fact that decoupled subsidies are often land based, conditioned on other policy measures, and interact with farm characteristics (e.g., farm credit constraint) (Goodwin, Mishra, and OrtaloMagné 2003;Lence and Mishra 2003;Roberts, Kirwan, and Hopkins 2003;Kirwan 2009;Ciaian and Kancs 2012;Barnard et al 1997;Patton et al 2008). Our estimates contrast somewhat with the estimates of Kilian et al (2012), according to which the SPS increases the capitalization by an additional 15% to 19% above the previous coupled subthe full sample and 0.5% in the hybrid and the decoupling subsamples.…”

Section: May 2014 Land Economics 274 Figurementioning

confidence: 99%

“…According to Goodwin, Mishra, and OrtaloMagné (2003), Weersink et al (1999), Lence and Mishra (2003), Roberts, Kirwan, and Hopkins (2003), Kirwan (2009), Ciaian and Kancs (2012), Barnard et al (1997), and Patton et al (2008), the capitalization rate of coupled subsidies into land values varies between 20% and 100%, whereas the capitalization rate of decoupled subsidies is usually found to be lower, namely, between 20% and 80%.…”

Section: Introductionmentioning

confidence: 99%

Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union

Michalek¹,

Ciaian²,

Kancs³

2014

Land Economics

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“…There is a literature on the political economy of pass-through for government subsidies (e.g., Lence and Mishra, 2003;Roberts, Kirwan, and Hopkins, 2003). Conventional wisdom based on Ricardian rent theory suggests that landowners, who are often stylized as the owners of the most limiting resource, should have the bargaining power to ensure that they receive all benefits.…”

Section: Resultsmentioning

confidence: 99%

Does a Rising Biofuels Tide Raise All Boats? A Study of Cash Rent Determinants for Iowa Farmland under Hay and Pasture

Hennessy

Edwards

2008

Journal of Agricultural &Amp; Food Industrial Organization

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Iowa's farmland consists of over 16% hay crops and pastureland, a significant portion of which is under cash rental contracts. This study investigates the comparative relationships between cash rental rates for cropped land and non-cropped land, where the latter includes hay and pastureland. We find that higher crop prices resulting from biofuel demand induces land use conversion from non-cropped land to crop production and thus bids up non-cropped land rents. Compared with changes in cropped land cash rents, non-cropped farmland rents could increase by a higher percentage. Non-cropped land cash rental rates are largely determined by crop and feeder cattle prices, population density, soil quality, and proportion of non-cropped land in a specific area. A primary effect of ethanol subsidies is the redistribution of income between corn growers and livestock producers, whereby higher livestock feed costs together with increasing hay and pastureland cash rents harm the dairy and feedlot beef sectors. Our study shows that, because of the positive effect on rents, the policies have an indeterminate effect on landowners operating in the cow-calf sector.

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The Incidence of Government Program Payments on Agricultural Land Rents: The Challenges of Identification

Cited by 121 publications

References 5 publications

Capitalisation of government support in agricultural land prices in the Czech Republic

Capitalisation of government support in agricultural land prices in the Czech Republic

Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union

Does a Rising Biofuels Tide Raise All Boats? A Study of Cash Rent Determinants for Iowa Farmland under Hay and Pasture

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