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Direct payments and rent extraction by land owners: Evidence form New Member States

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  • Van Herck, Kristine
  • Vranken, Liesbet

Abstract

Since the accession of the eight Central and Eastern European countries, farmers in these countries started to receive substantial agricultural subsidies. Agricultural subsidies alter farmer production incentives and thus factor demand and factor prices. Hence, agricultural support has an impact on land rents. This paper analyses the impact of the introduction of direct payments on land rents in the new member states and correlates econometrically land rental price data with support measures while controlling for other effects. The impact of direct payments on land rents is not only found to be statistically significant, but also economically important as 15% of the direct payments are capitalized in land rents in the new member states.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 122nd Seminar, February 17-18, 2011, Ancona, Italy with number 99583.

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Date of creation: 10 Feb 2011
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Handle: RePEc:ags:eaa122:99583

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Keywords: Land rental prices; Farm subsidies; New member states; Agricultural and Food Policy; Q12; Q18;

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Cited by:
  1. Ciaian, Pavel & Kancs, d'Artis & Swinnen, Johan F.M. & Van Herck, Kristine & Vranken, Liesbet, 2012. "Sales Market Regulations for Agricultural Land in EU Member States and Candidate Countries," Working Papers 120249, Factor Markets, Centre for European Policy Studies.

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