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Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis

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Pavel Ciaian
Johan F.M. Swinnen

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Abstract

This article analyses how transaction costs and imperfect competition in the land market affect the welfare effects of agricultural subsidies in the new Eastern Member States of the European Union. Benefits of land subsidies end up with landowners in new Eastern Member States also with imperfections in the new Eastern Member States land markets. With unequal access to subsidies, small tenant farmers may even lose out from the subsidies. Decoupling of payments shifts policy rents to farmers, but constrains productivity-enhancing restructuring. Using reserve entitlements to mitigate this effect reduces the intended benefits on distortions and target efficiency. Copyright 2006 American Agricultural Economics Association.

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Article provided by American Agricultural Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 88 (2006)
Issue (Month): 4 (November)
Pages: 799-815
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Handle: RePEc:bla:ajagec:v:88:y:2006:i:4:p:799-815

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Johan F. M. Swinnen, 1999. "The political economy of land reform choices in Central and Eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 7(3), pages 637-664, November. [Downloadable!] (restricted)
  2. Csaki, Csaba & Lerman, Zvi, 2001. "Land And Farm Structure In Poland," Discussion Papers 14998, Hebrew University of Jerusalem, Department of Agricultural Economics and Management. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Johan F.M. Swinnen & Liesbet Vranken, 2007. "Patterns of Land Market Developments in Transition," LICOS Discussion Papers 17907, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  2. Pavel Ciaian & Tomáš Ratinger, 2009. "Income Distribution Effects of EU Rural Development Policies: The Case of Farm Investment Support," EERI Research Paper Series EERI_RP_2009_01, Economics and Econometrics Research Institute (EERI). [Downloadable!]
  3. Ciaian, Pavel & Swinnen, Johan F.M., 2005. "Market Imperfections and Agricultural Policy Effects on Structural Change and Competitiveness in an Enlarged EU," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24463, European Association of Agricultural Economists. [Downloadable!]
  4. Kancs, d'Artis & Ciaian, Pavel, 2008. "Factor Content of Agricultural Trade," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44458, European Association of Agricultural Economists. [Downloadable!]
    Other versions:
  5. Biro, Szabolcs, 2008. "The Hungarian land market after EU Accession," Studies in Agricultural Economics, Research Institute for Agricultural Economics, issue 107, March. [Downloadable!]
  6. Ciaian, P. & Kancs, D. & Pokrivcak, J., 2008. "Comparative Advantages, Transaction Costs and Factor Content in Agricultural Trade: Empirical Evidence from the CEE," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44135, European Association of Agricultural Economists. [Downloadable!]
    Other versions:
  7. Ciaian, Pavel & Pokrivcak, Jan & Drabik, Dusan, 2007. "The Economics Of Farm Organization In Ceec And Fsu," 104th Seminar, September 5-8, 2007, Budapest, Hungary 8527, European Association of Agricultural Economists. [Downloadable!]
  8. Pavel Ciaian & d'Artis Kancs, 2009. "The Capitalisation of Area Payments into Farmland Rents: Theory and Evidence from the New EU Member States," EERI Research Paper Series EERI_RP_2009_04, Economics and Econometrics Research Institute (EERI). [Downloadable!]
  9. Anderson, Kym & Swinnen, Johan, 2007. "Distortions to Agricultural Incentives in Europe’s Transition Economies," Agricultural Distortions Working Paper 48556, World Bank. [Downloadable!]
  10. Laure Latruffe & Sophia Davidova & Elodie Douarin & Matthew Gorton, 2008. "Farm expansion in Lithuania after accession to the EU: The role of CAP payments in alleviating potential credit constraints," Working Papers SMART - LERECO 200806, INRA UMR SMART. [Downloadable!]
  11. Ciaian, Pavel & Swinnen, Johan F.M., 2007. "Distortions to Agricultural Incentives in Central and Eastern Europe," Agricultural Distortions Working Paper 48385, World Bank. [Downloadable!]
  12. Latruffe, L. & Davidova, S. & Douarin, E. & Gorton, M., 2008. "Can the CAP payments facilitate the growth of individual farms in the New Member States post-EU accession?," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43611, European Association of Agricultural Economists. [Downloadable!]
  13. Pavel Ciaian & d’Artis Kancs & Johan F.M. Swinnen, 2008. "Static and Dynamic Distributional Effects of Decoupled Payments: Single Farm Payments in the European Union," LICOS Discussion Papers 20708, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  14. Ghib, M.-L., 2008. "Life annuity program in Romania: is the indemnity high enough to be efficient?," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43554, European Association of Agricultural Economists. [Downloadable!]
  15. Latruffe, Laure & Davidova, Sophia & Douarin, Elodie & Gorton, Matthew, 2008. "Can the CAP payments facilitate the growth of individual farms in the NMS post-EU accession?," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 36861, Agricultural Economics Society. [Downloadable!]
  16. Ciaian, Pavel & Swinnen, Johan F.M., 2008. "Credit Market Imperfections And The Distribution Of Policy Rents: The Common Agricultural Policy In The New Eu Member States," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6591, European Association of Agricultural Economists. [Downloadable!]
    Other versions:
  17. Pavel Ciaian & d'Artis Kancs, 2008. "The Impact of Food Price Shock on Heterogenous Credit Constrained Firms," EERI Research Paper Series EERI_RP_2008_02, Economics and Econometrics Research Institute (EERI). [Downloadable!]
  18. Pietola, Kyosti & Myyra, Sami & Pouta, Eija, 2009. "Fiscal and trade distorting effects of capital gains tax on land sales - empirical evidence from agricultural land market in Finland," Discussion Papers 50040, MTT Agrifood Research Finland. [Downloadable!]
  19. Pablo M Garcia, 2003. "Measuring Willingness-To-Pay in Discrete Choice Models with Semi- Parametric Techniques," EERI Research Paper Series EERI_RP_2003_03, Economics and Econometrics Research Institute (EERI). [Downloadable!]
  20. Pavel Ciaian, 2007. "Land Reform and Productivity Gains with Multiple Market Imperfections," EERI Research Paper Series EERI_RP_2007_01, Economics and Econometrics Research Institute (EERI). [Downloadable!]
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