Impact of post-2013 CAP reform on land markets: evidence from farm surveys and farm-level modelling
The connection between policy and other context variables and land markets is at the core of the policy debate, including the present reform of the Common Agricultural Policy. The objective if this paper is to evaluate the impact of the post 2013 CAP policy instruments on the land market in the Province of Bologna (Italy), based on a combination of survey and modelling information. Attention is particularly focused on the regionalization of payments and considers both potential reactions by individual farms and their interaction on the market. Modelling and survey information show a reaction of the land demand to the shift from the historical to the regionalised payments, with opposite reactions by different farms, hence incentives to adaptation through land markets exchange (rent). The regionalized payment seems to be more capitalized into the land value, at the margin, as long as it is less connected to entitlement. As a result, the regionalisation would cause increased rental prices. Survey information, however also reveals a major uncertainty by farmers in interpreting and devising an appropriate reaction to the expected reform.
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