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The influence of agricultural support on sale prices of French farmland: A comparison of different subsidies, accounting for the role of environmental and land regulations

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  • Latruffe, Laure
  • Piet, Laurent
  • Dupraz, Pierre
  • Mouël, Chantal Le

Abstract

We investigate the determinants of agricultural land price in several regions in France over the period 1994-2011 using individual plots transaction data, with a particular emphasis on agricultural subsidies and nitrate zoning regulations. We found a positive but relatively small capitalisation effect of the total subsidies per hectare. We found evidence that agricultural subsidies capitalised at least to some extent. However, the magnitude of such a capitalisation depends on the region considered, on the type of subsidy considered, and on the location of the plot in a nitrate surplus zone or not. Only land set-aside premiums significantly capitalise into land price, while single farm payments have a significant positive capitalisation impact only for plots located in a nitrate surplus zone.

Suggested Citation

  • Latruffe, Laure & Piet, Laurent & Dupraz, Pierre & Mouël, Chantal Le, 2013. "The influence of agricultural support on sale prices of French farmland: A comparison of different subsidies, accounting for the role of environmental and land regulations," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152372, International Agricultural Trade Research Consortium.
  • Handle: RePEc:ags:iatr13:152372
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    1. J Cavailhès & S Degoud, 1995. "L'évaluation du prix des terres en France. Une application aux effets de la réforme de la PAC," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 36, pages 49-77.
    2. Patton, Myles & Kostov, Philip & McErlean, Seamus & Moss, Joan, 2008. "Assessing the influence of direct payments on the rental value of agricultural land," Food Policy, Elsevier, vol. 33(5), pages 397-405, October.
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    5. Laure Latruffe & Chantal Le Mouël, 2009. "Capitalization Of Government Support In Agricultural Land Prices: What Do We Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 659-691, September.
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    Cited by:

    1. Paul Feichtinger & Klaus Salhofer, 2016. "The Fischler Reform of the Common Agricultural Policy and Agricultural Land Prices," Land Economics, University of Wisconsin Press, pages 411-432.

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    Keywords

    Farm land price; agricultural subsidies; capitalisation; regulations; nitrate surplus area; France; Agricultural and Food Policy; Farm Management; International Development; Land Economics/Use;

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