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Common Agricultural Policy direct payments and distributional conflicts over rented land within corporate farms in the New Member States

Author

Listed:
  • Laure Latruffe

    (Économie et Sociologie Rurales - INRA - Institut National de la Recherche Agronomique)

  • Sophia Davidova

    (Kent Business School - University of Kent [Canterbury])

Abstract

This paper aims to investigate whether distributional issues within corporate farms in the New Member States will be exacerbated by the introduction of the Common Agricultural Policy (CAP) direct payments. The paper focuses on the specific impact of the payments on the land rented to the corporate farms by private landowners. If the latter are not satisfied with the level of rent they receive, they have the option to end their rental contract and withdraw their land from the farm. Before accession to the European Union the landowners did not have strong incentives to withdraw, as the other opportunities available were not associated with higher returns on land ownership. However, this situation might change as the landowners can now cash the CAP direct payments themselves, providing they keep their land in good agricultural and environmental condition. Propositions generated by a simple game, representing the negotiations between a corporate farm manager and an individual landowner about the level of the rent, suggest that the CAP direct payments might induce more rent renegotiations but that overall withdrawals will be infrequent. The results from a survey of landowners in corporate farms in Slovakia and in the Czech Republic seemed to corroborate these a priori expectations. The investigation of the determinants of landowners' intended behaviour showed that what seems to be important in the decision-making is the relationship between landowners and managers. Those landowners who have frequent contacts and close relations with the farm are less likely to withdraw.

Suggested Citation

  • Laure Latruffe & Sophia Davidova, 2006. "Common Agricultural Policy direct payments and distributional conflicts over rented land within corporate farms in the New Member States," Post-Print hal-02285627, HAL.
    • Handle: RePEc:hal:journl:hal-02285627
    Note: View the original document on HAL open archive server: https://hal.science/hal-02285627
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    References listed on IDEAS

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    Cited by:

    1. Zdenka NAGLOVA & Barbora BOBEROVA & Tereza HORAKOVA & Lubos SMUTKA, 2017. "Statistical analysis of factors influencing the results of enterprises in dairy industry," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(6), pages 259-270.
    2. Laure Latruffe & Sophia Davidova & Gejza Blaas, 2007. "The persistence of the corporate farms : they survived the transition but do they have future under the CAP," Post-Print hal-02416847, HAL.
    3. Laurence Amblard & J.P. Colin, 2009. "Reverse tenancy in Romania: Actors' rationales and equity outcomes," Post-Print hal-00454533, HAL.
    4. F. Střeleček & Daniel Kopta & Jana Lososová & Radek Zdeněk, 2012. "Economic results of agricultural enterprises in 2010," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 60(7), pages 315-328.
    5. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    6. F. Střeleček & J. Lososová & R. Zdeněk, 2011. "Economic results of agricultural enterprises in 2009," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 57(3), pages 103-117.
    7. Svoboda, J. & Lososová, Jana & Zdeněk, R., 2015. "Analysis of Operating Costs of Subsidies in the Field of Agriculture of EU Countries," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(4), pages 1-13, December.
    8. Jean-Sauveur Ay & Laure Latruffe, 2013. "The empirical content of the present value model: a survey of the instrumental uses of farmland prices," Working Papers hal-01208917, HAL.
    9. Sauer, Johannes & Davidova, Sophia & Latruffe, Laure, 2009. "Determinants of the Fallowing Decision in Kosovo," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 51072, Agricultural Economics Society.
    10. Jana Lososová & Jaroslav Svoboda, 2013. "Changes in direct payments after 2013 in the Czech agrarian sector," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 61(2), pages 393-404.
    11. Douadia Bougherara & Laure Latruffe, 2007. "Potential impact of Single Farm Payments on French landowners’ decisions to withdraw land from production," Working Papers hal-01939949, HAL.
    12. Latruffe, Laure & Davidova, Sophia, 2006. "CAP Direct Payments and Distributional Conflicts Over Rented Land within Corporate Farms in the New Member States," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25242, International Association of Agricultural Economists.

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