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Empirical Evidence of the Distributional Effects of the CAP in New EU Member States

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  • Ciaian, Pavel
  • Pokrivcak, Jan
  • Kancs, d'Artis

Abstract

This study, carried out in the context of the Factor Markets research project, investigates the impact of the SAPS (Single Area Payment Scheme) on farmland rental rates in the new EU member states. Using a unique set of farm level panel data with 20,930 observations for 2004 and 2005 we are able to control for important sources of endogeneity. According to our results, the SAPS has a positive and statistically significant impact on land rents in the EU. However, the estimated incidence is smaller than predicted theoretically. Land rents capture only 19 cents of the marginal SAPS euro, and around 10% of the SAPS benefit non-farming landowners through higher farmland rental prices. As the share of rented land is higher in corporate farms than individual ones, family farms benefit more from the SAPS than corporate farms do.

Suggested Citation

  • Ciaian, Pavel & Pokrivcak, Jan & Kancs, d'Artis, 2013. "Empirical Evidence of the Distributional Effects of the CAP in New EU Member States," Working papers 157117, Factor Markets, Centre for European Policy Studies.
    • Handle: RePEc:ags:famawp:157117
    DOI: 10.22004/ag.econ.157117
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    Cited by:

    1. 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).
    2. Góral, Justyna & Kulawik, Jacek, 2015. "Problem of capitalisation of subsidies in agriculture," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 240758, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).

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    More about this item

    Keywords

    Land Economics/Use;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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