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Credit Market Imperfections and the Distribution of Policy Rents


  • Ciaian, Pavel
  • Swinnen, Johan F.M.


This article shows that credit market imperfections have important implications for the distribution of policy rents. In a model with land as fixed factor and credit market imperfections, when an area payment is given, land rents go up by more than the subsidy. On aggregate farms may lose from the subsidy. The results depend on the extent to which subsidies have direct and indirect effects on the credit constraints, on whether farms rent or own land, and on farm heterogeneity.

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  • Ciaian, Pavel & Swinnen, Johan F.M., 2008. "Credit Market Imperfections and the Distribution of Policy Rents," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44050, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae08:44050

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    Agricultural policy; imperfect credit markets; policy rents; Agricultural Finance;

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