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Leasing of agricultural land versus agency theory: the case of Poland

Author

Listed:
  • Renata Marks-Bielska

    (University of Warmia and Mazury in Olsztyn)

  • Agata Zielinska

    (University of Warmia and Mazury in Olsztyn)

Abstract

Motivation: Agency theory examines relations between entities as contract relations, like land owner and tenant. Polish farmland market and its ‘rules of the game’ are still changing after political transformation. Decisions and actions presented by both parts of the lease contract seems to be easier to understand, explain and predict with the research instrumentality of new institutional economy, especially agency theory. Agency relationship is the issue studied by the economists many times, but there is a need to complete it with examples, researches and practical implications. Aim: the determination of the significance of the lease in Polish agriculture with the use of agency theory. Results: Use of the analytical apparatus of agency theory allowed for the indication of critical elements in the lessee/ lessor relation. One of the most important elements of contract specification is the remuneration transferred as part of the relation. Payments in the market of leasing deriving from the Agricultural Property Agency are regulated by the institution of the lease fee. On the other hand, in the case of leases between neighbours, there are both financial instruments (e.g. settlement of tax, resignation from land subsidies for the benefit of the land owner, rent) and non-financial ones (e.g. equivalent in agricultural products, services performed with mechanical equipment, household care). The results of the study have shown that financial forms are the most popular form of payment; most indications referred to resignation from land subsidies (59.6%).

Suggested Citation

  • Renata Marks-Bielska & Agata Zielinska, 2018. "Leasing of agricultural land versus agency theory: the case of Poland," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 17(1), pages 83-102, March.
    • Handle: RePEc:cpn:umkeip:v:17:y:2018:i:1:p:83-102
    DOI: 10.12775/EiP.2018.007
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    References listed on IDEAS

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    1. Maskin, Eric & Tirole, Jean, 1990. "The Principal-Agent Relationship with an Informed Principal: The Case of Private Values," Econometrica, Econometric Society, vol. 58(2), pages 379-409, March.
    2. Ross, Stephen A, 1973. "The Economic Theory of Agency: The Principal's Problem," American Economic Review, American Economic Association, vol. 63(2), pages 134-139, May.
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    Citations

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    Cited by:

    1. Adewale Henry Adenuga & Claire Jack & Ronan McCarry, 2021. "The Case for Long-Term Land Leasing: A Review of the Empirical Literature," Land, MDPI, vol. 10(3), pages 1-21, March.
    2. Dominika Milczarek-Andrzejewska & Jerzy Wilkin & Renata Marks-Bielska & Adam Czarnecki & Anna Bartczak, 2020. "Konflikty o ziemię rolną – perspektywa ekonomiczna," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 4, pages 5-31.
    3. Aneta Bełdycka-Bórawska & Piotr Bórawski & Lisa Holden & Tomasz Rokicki & Bogdan Klepacki, 2022. "Factors Shaping Performance of Polish Biodiesel Producers Participating in the Farm Accountancy Data Network in the Context of the Common Agricultural Policy of the European Union," Energies, MDPI, vol. 15(19), pages 1-25, October.
    4. Marks-Bielska, Renata, 2021. "Conditions underlying agricultural land lease in Poland, in the context of the agency theory," Land Use Policy, Elsevier, vol. 102(C).

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    Keywords

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    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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