The pre-emption right in Italian agriculture: A preliminary evaluation of the direct farmer-neighbouring owner’s case

Tenant Favoritism and Right of First Refusals in Farmland Auctions

“…An example denotes a longtime service supplier in procurement auctions, where favoritism is not necessarily made explicit by granting RFRs (Laffont and Tirole 1991). In some European land markets, irrespective of the market mechanism, RFRs for local, neighboring, or tenant farmers are granted, also in Germany where the right can be exercised by rural settlement agencies in case a local farm is willing to pay the price and can demonstrate its need for additional land (Galletto 2018;Moog and Bahrs 2021).…”

“…1 Examples include the 2003 Saskatchewan Farm Security Act (Ferguson, Furtan, and Carlberg 2006;Lawley 2018), direct farmer-neighboring owner's pre-emption rights in Italy (Galletto 2018), and pre-emption rights granted to local farmers in Germany (Moog and Bahrs 2021).…”

The tenant's pre-emption rights in Italian agriculture: An introductory economic evaluation

“…In Germany, the number of land sales in which the PR was involved is reported to have increased from 242 in 2005, to 801 cases in 2011 [ 4 ]. Likewise, the neighbour owner's PR appears quite pervasive in Italian agriculture, affecting most agricultural land sales [ 9 ].…”

“…However, their work demonstrated that the introduction of the PR also leads to inefficient distribution and deadweight losses for the economy. Galletto [ 9 ] made a first evaluation of the neighbouring owner's PR, which was based on an Italian farmers' sample survey. In a choice experiment where it was hypothesised to offer farmers PRs, Moog and Bahrs [ 22 ] showed that farmers attribute a positive benefit to the PR and their willingness to pay for it depends on how the right is structured.…”

“…In the six papers cited by Ref. [ 9 ] PRs refer to rights included in a private contract and only two of these deal with PRs granted by law. All these works focused mainly on the profitability and efficiency of including PRs in a contract and on the social benefits they can determine for society.…”