IDEAS home Printed from https://ideas.repec.org/a/gam/jlands/v9y2020i3p96-d336480.html
   My bibliography  Save this article

The Factors Affecting Farmland Rental Prices in Slovakia

Author

Listed:
  • Ivan Takáč

    (Department of European Policies, Slovak University of Agriculture in Nitra, 94976 Nitra, Slovakia)

  • Jarmila Lazíková

    (Department of Law, Slovak University of Agriculture in Nitra, 94976 Nitra, Slovakia)

  • Ľubica Rumanovská

    (Department of European Policies, Slovak University of Agriculture in Nitra, 94976 Nitra, Slovakia)

  • Anna Bandlerová

    (Department of Law, Slovak University of Agriculture in Nitra, 94976 Nitra, Slovakia)

  • Zuzana Lazíková

    (Department of Law, Slovak University of Agriculture in Nitra, 94976 Nitra, Slovakia)

Abstract

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).

Suggested Citation

  • Ivan Takáč & Jarmila Lazíková & Ľubica Rumanovská & Anna Bandlerová & Zuzana Lazíková, 2020. "The Factors Affecting Farmland Rental Prices in Slovakia," Land, MDPI, vol. 9(3), pages 1-18, March.
    • Handle: RePEc:gam:jlands:v:9:y:2020:i:3:p:96-:d:336480
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2073-445X/9/3/96/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2073-445X/9/3/96/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Van Herck, Kristine & Vranken, Liesbet, 2012. "Direct Payments and Land Rents: Evidence from New Member States," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126777, International Association of Agricultural Economists.
    2. Pyykkonen, Perttu, 2005. "Spatial Analysis of Factors Affecting Finnish Farmland Prices," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24541, European Association of Agricultural Economists.
    3. Pavel Ciaian & d'Artis Kancs & Maria Espinosa, 2018. "The Impact of the 2013 CAP Reform on the Decoupled Payments’ Capitalisation into Land Values," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(2), pages 306-337, June.
    4. Deininger, Klaus & Jin, Songqing, 2005. "The potential of land rental markets in the process of economic development: Evidence from China," Journal of Development Economics, Elsevier, vol. 78(1), pages 241-270, October.
    5. Sergio H. Lence & Ashok K. Mishra, 2003. "The Impacts of Different Farm Programs on Cash Rents," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 753-761.
    6. Gunnar Breustedt & Hendrik Habermann, 2011. "The Incidence of EU Per‐Hectare Payments on Farmland Rental Rates: A Spatial Econometric Analysis of German Farm‐Level Data," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(1), pages 225-243, February.
    7. Haixiao Huang & Gay Y. Miller & Bruce J. Sherrick & Miguel I. Gómez, 2006. "Factors Influencing Illinois Farmland Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 458-470.
    8. Ciaian, Pavel, & Kancs, d’Artis & Swinnen, Jo & Van Herck, Kristine & Vranken, Liesbet, 2012. "Rental Market Regulations for Agricultural Land in EU Member States and Candidate Countries," Factor Markets Working Papers 117, Centre for European Policy Studies.
    9. Patton, Myles & Kostov, Philip & McErlean, Seamus & Moss, Joan, 2008. "Assessing the influence of direct payments on the rental value of agricultural land," Food Policy, Elsevier, vol. 33(5), pages 397-405, October.
    10. Liesbet Vranken & Karen Macours & Nivelin Noev & Johan Swinnen, 2007. "Property Rights Imperfections, Asset Allocation, and Welfare: Co-Ownership in Bulgaria," LICOS Discussion Papers 18007, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    11. Vranken, Liesbet & Macours, Karen & Noev, Nivelin & Swinnen, Johan, 2011. "Property rights imperfections and asset allocation: Co-ownership in Bulgaria," Journal of Comparative Economics, Elsevier, vol. 39(2), pages 159-175, June.
    12. Nigel Swain, 1999. "Agricultural Restitution and Co-operative Transformation in the Czech Republic, Hungary and Slovakia," Europe-Asia Studies, Taylor & Francis Journals, vol. 51(7), pages 1199-1219.
    13. Johan Swinnen & Pavel Ciaian & d’Artis Kancs, 2008. "Functioning of Land Markets in the EU Member States," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 51(2), pages 48-62.
    14. Pavel Ciaian & D'Artis Kancs & Johan Swinnen, 2014. "The Impact of the 2013 Reform of the Common Agricultural Policy on Land Capitalization in the European Union," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 36(4), pages 643-673.
    15. Chantal Le Mouel, 2004. "Impacts of alternative agricultural income support schemes on multiple policy goals," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 31(2), pages 125-148, June.
    16. Stephen Devadoss & Viswanadham Manchu, 2007. "A comprehensive analysis of farmland value determination: a county-level analysis," Applied Economics, Taylor & Francis Journals, vol. 39(18), pages 2323-2330.
    17. Mathijs, Erik & Swinnen, Johan F M, 1998. "The Economics of Agricultural Decollectivization in East Central Europe and the Former Soviet Union," Economic Development and Cultural Change, University of Chicago Press, vol. 47(1), pages 1-26, October.
    18. Feichtinger, Paul & Salhofer, Klaus, 2013. "What Do We Know about the Influence of Agricultural Support on Agricultural Land Prices?," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 62(2).
    19. Kilian, Stefan & Anton, Jesus & Roder, Norbert & Salhofer, Klaus, 2008. "Impacts Of 2003 Cap Reform On Land Prices: From Theory To Empirical Results," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44808, European Association of Agricultural Economists.
    20. Feichtinger, Paul & Salhofer, Klaus, 2013. "What Do We Know about the Influence of Agricultural Support on Agricultural Land Prices?," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 62(02), pages 1-15, May.
    21. L. Latruffe & T. Doucha & Ch. Le Mouël & T. Medonos & V. Voltr, 2008. "Capitalisation of government support in agricultural land prices in the Czech Republic," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 54(10), pages 451-460.
    22. Michael J. Roberts & Barrett Kirwan & Jeffrey Hopkins, 2003. "The Incidence of Government Program Payments on Agricultural Land Rents: The Challenges of Identification," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 762-769.
    23. Jianyun Hou & Xuexi Huo & Runsheng Yin, 2017. "Land Rental Market Participation and Its Impact on Fixed Investment and Household Welfare: Evidence from Chinese Apple Production Sites," Sustainability, MDPI, vol. 9(11), pages 1-15, October.
    24. Ciaian, Pavel & Swinnen, Johan F.M., 2006. "AJAE Appendix: Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 88(4), pages 1-10, November.
    25. Alexander Gocht & Wolfgang Britz & Pavel Ciaian & Sergio Gomez y Paloma, 2013. "Farm Type Effects of an EU-wide Direct Payment Harmonisation," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(1), pages 1-32, February.
    26. Ciaian, Pavel, & Kancs, d’Artis & Swinnen, Jo & Van Herck, Kristine & Vranken, Liesbet, 2012. "Sales Market Regulations for Agricultural Land in EU Member States and Candidate Countries," Factor Markets Working Papers 116, Centre for European Policy Studies.
    27. John E. Floyd, 1965. "The Effects of Farm Price Supports on the Returns to Land and Labor in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 73(2), pages 148-148.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marten Graubner, 2018. "Lost in space? The effect of direct payments on land rental prices," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(2), pages 143-171.
    2. Baldoni, Edoardo & Ciaian, Pavel, 2023. "The capitalization of CAP subsidies into land prices in the EU," Land Use Policy, Elsevier, vol. 134(C).
    3. Pavel Ciaian & Edoardo Baldoni & d'Artis Kancs & Dušan Drabik, 2021. "The Capitalization of Agricultural Subsidies into Land Prices," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 17-38, October.
    4. Van Herck, Kristine & Vranken, Liesbet, 2012. "Direct Payments and Land Rents: Evidence from New Member States," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126777, International Association of Agricultural Economists.
    5. repec:zbw:inwedp:652016 is not listed on IDEAS
    6. Paul Feichtinger & Klaus Salhofer, 2016. "Decoupled Single Farm Payments of the CAP and Land Rental Prices," Working Papers 652016, University of Natural Resources and Life Sciences, Vienna, Department of Economics and Social Sciences, Institute for Sustainable Economic Development.
    7. Pavel Ciaian & d’Artis Kancs & Johan Swinnen, 2010. "EU Land Markets and the Common Agricultural Policy," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(3), pages 1-31.
    8. Lin, Wensheng & Huang, Jikun, 2021. "Impacts of agricultural incentive policies on land rental prices: New evidence from China," Food Policy, Elsevier, vol. 104(C).
    9. Ciaian, Pavel, & Kancs, d’Artis & Swinnen, Jo & Van Herck, Kristine & Vranken, Liesbet, 2012. "Rental Market Regulations for Agricultural Land in EU Member States and Candidate Countries," Factor Markets Working Papers 117, Centre for European Policy Studies.
    10. Ciaian, Pavel & Kancs, d'Artis & Swinnen, Johan F.M. & Van Herck, Kristine & Vranken, Liesbet, 2012. "Institutional Factors Affecting Agricultural Land Markets," Working papers 120251, Factor Markets, Centre for European Policy Studies.
    11. Pavel Ciaian & D'Artis Kancs & Johan Swinnen, 2014. "The Impact of the 2013 Reform of the Common Agricultural Policy on Land Capitalization in the European Union," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 36(4), pages 643-673.
    12. Paul Feichtinger & Klaus Salhofer, 2016. "The Fischler Reform of the Common Agricultural Policy and Agricultural Land Prices," Land Economics, University of Wisconsin Press, vol. 92(3), pages 411-432.
    13. Feichtinger, Paul & Salhofer, Klaus, 2016. "Decoupled Single Farm Payments of the CAP and Land Rental Prices," Discussion Papers DP-65-2016, University of Natural Resources and Life Sciences, Vienna, Department of Economics and Social Sciences, Institute for Sustainable Economic Development.
    14. Wensheng Lin & Rongyuan Chen, 2021. "The Capitalization Effect and Its Consequence of Agricultural Support Policies—Based on the Evidence of 800 Villages in China," Sustainability, MDPI, vol. 13(14), pages 1-13, July.
    15. Pavel Ciaian & d’Artis Kancs, 2012. "The Capitalization of Area Payments into Farmland Rents: Micro Evidence from the New EU Member States," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 60(4), pages 517-540, December.
    16. Jerzy Michalek & Pavel Ciaian & d’Artis Kancs, 2014. "Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union," Land Economics, University of Wisconsin Press, vol. 90(2), pages 260-289.
    17. Van Herck, Kristine & Vranken, Liesbet, 2011. "Direct payments and rent extraction by land owners: Evidence form New Member States," 122nd Seminar, February 17-18, 2011, Ancona, Italy 99583, European Association of Agricultural Economists.
    18. Pavel Ciaian & d'Artis Kancs & Maria Espinosa, 2018. "The Impact of the 2013 CAP Reform on the Decoupled Payments’ Capitalisation into Land Values," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(2), pages 306-337, June.
    19. Hennig Solveigh & Breustedt Gunnar, 2018. "The Incidence of Agricultural Subsidies on Rental Rates for Grassland," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 238(2), pages 125-156, April.
    20. O'Donoghue, Cathal & Lopez, Jeremey & O’Neill, Stephen & Ryan, Mary, 2015. "AHedonic Price Model of Self-Assessed Agricultural Land Values," 150th Seminar, October 22-23, 2015, Edinburgh, Scotland 212639, European Association of Agricultural Economists.
    21. Ciaian, Pavel & Pokrivcak, Jan & Kancs, d'Artis, 2013. "Empirical Evidence of the Distributional Effects of the CAP in New EU Member States," Working papers 157117, Factor Markets, Centre for European Policy Studies.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jlands:v:9:y:2020:i:3:p:96-:d:336480. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.