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Impact of post-2013 CAP reform on land markets: evidence from farm surveys and farm-level modelling

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  • Viaggi, D.
  • Bartolini, F.
  • Puddu, M.
  • Raggi, M.

Abstract

The connection between policy and other context variables and land markets is at the core of the policy debate, including the present reform of the Common Agricultural Policy. The objective if this paper is to evaluate the impact of the post 2013 CAP policy instruments on the land market in the Province of Bologna (Italy), based on a combination of survey and modelling information. Attention is particularly focused on the regionalization of payments and considers both potential reactions by individual farms and their interaction on the market. Modelling and survey information show a reaction of the land demand to the shift from the historical to the regionalised payments, with opposite reactions by different farms, hence incentives to adaptation through land markets exchange (rent). The regionalized payment seems to be more capitalized into the land value, at the margin, as long as it is less connected to entitlement. As a result, the regionalisation would cause increased rental prices. Survey information, however also reveals a major uncertainty by farmers in interpreting and devising an appropriate reaction to the expected reform.

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Bibliographic Info

Paper provided by International Agricultural Trade Research Consortium in its series Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain with number 152375.

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Date of creation: Jun 2013
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Handle: RePEc:ags:iatr13:152375

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Keywords: Agricultural and Food Policy; Land Economics/Use; Research Methods/ Statistical Methods;

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  1. Laure Latruffe & Chantal Le Mou´┐Żl, 2009. "Capitalization Of Government Support In Agricultural Land Prices: What Do We Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 659-691, 09.
  2. Deininger, Klaus & Jin, Songqing & Nagarajan, Hari K., 2008. "Efficiency and equity impacts of rural land rental restrictions: Evidence from India," European Economic Review, Elsevier, vol. 52(5), pages 892-918, July.
  3. 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), November.
  4. Deininger, Klaus W. & Jin, Songqing, 2005. "Land Sales and Rental Markets in Transition: Evidence from Rural Vietnam," 2005 Annual meeting, July 24-27, Providence, RI 19359, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Oliver Balkhausen & Martin Banse & Harald Grethe, 2008. "Modelling CAP Decoupling in the EU: A Comparison of Selected Simulation Models and Results," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(1), pages 57-71, 02.
  6. Jin, Songqing & Jayne, Thomas S., 2011. "Impacts of Land Rental Markets on Rural Poverty in Kenya," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103907, Agricultural and Applied Economics Association.
  7. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2010. "An integer programming dynamic farm-household model to evaluate the impact of agricultural policy reforms on farm investment behaviour," European Journal of Operational Research, Elsevier, vol. 207(2), pages 1130-1139, December.
  8. Pavel Ciaian & Johan Swinnen, 2005. "Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis," LICOS Discussion Papers 15805, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
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