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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.

Suggested Citation

  • Van Herck, Kristine & Vranken, Liesbet, 2011. "Direct payments and rent extraction by land owners: Evidence form New Member States," 122nd Seminar, February 17-18, 2011, Ancona, Italy 99583, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa122:99583
    DOI: 10.22004/ag.econ.99583
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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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    More about this item

    Keywords

    Agricultural and Food Policy;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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