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An Empirical Investigation of the Linkages between Government Payments and Farmland Leasing Arrangements

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  • Qiu, Feng
  • Goodwin, Barry K.
  • Gervais, Jean-Philippe

Abstract

This article investigates the impacts of decoupled and coupled support payments on farmland rental contract choices using a principal-agent model. We consider cash and share contracts as well as hybrid contracts, which are increasingly prominent in US agriculture. The conceptual framework suggests that restrictions on sharing payments between contracting parties are ineffective and induce an offsetting contractual rearrangement. Empirical results from a multinomial logit model confirm that government support programs have large significant effects on contract choices and that these effects vary by types of subsidies.

Suggested Citation

  • Qiu, Feng & Goodwin, Barry K. & Gervais, Jean-Philippe, 2010. "An Empirical Investigation of the Linkages between Government Payments and Farmland Leasing Arrangements," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49242, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea09:49242
    DOI: 10.22004/ag.econ.49242
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    Cited by:

    1. Abby Kelly & Kalyn T. Coatney & Xiaofei Li & Keith H. Coble, 2020. "Subsidy Incidence in the Presence of Bertrand Suppliers of Complementary Inputs: A U.S. Agricultural Example," Journal of Industry, Competition and Trade, Springer, vol. 20(3), pages 479-501, September.
    2. 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.
    3. Barrett E. Kirwan & Michael J. Roberts, 2016. "Who Really Benefits from Agricultural Subsidies? Evidence from Field-level Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(4), pages 1095-1113.
    4. Zhang, Hongliang & Mu, Jianhong E. & McCarl, Bruce A., 2018. "Adaptation to climate change via adjustment in land leasing: Evidence from dryland wheat farms in the U.S. Pacific Northwest," Land Use Policy, Elsevier, vol. 79(C), pages 424-432.
    5. Kualwik, Jacek, 2016. "Selected problems of farmland valuation and setting rents for its lease," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 252639, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    6. Yueming Cao & Yunli Bai & Linxiu Zhang, 2022. "Plot Size, Adjacency, and Farmland Rental Contract Choice," Land, MDPI, vol. 11(4), pages 1-21, April.
    7. Ricker-Gilbert, Jacob & Mason, Nicole & Chamberlin, Jordan, 2016. "What Is Driving Farmland Rental Prices In Sub-Saharan Africa? Evidence From Malawi," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235819, Agricultural and Applied Economics Association.

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    Keywords

    Agricultural and Food Policy; Environmental Economics and Policy; Industrial Organization; Institutional and Behavioral Economics; Land Economics/Use; Risk and Uncertainty;
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