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

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

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.

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File URL: http://www.factormarkets.eu/system/files/FM58%20Empirical%20evidence%20...%20%20CAP%20in%20New%20EU%20MSs-3.pdf
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Paper provided by Centre for European Policy Studies in its series Factor Markets Working Papers with number 170.

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Length: 25 pages
Date of creation: Aug 2013
Date of revision:
Handle: RePEc:eps:fmwppr:170
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  8. Plantinga, Andrew & Lubowski, Ruben & Stavins, Robert, 2002. "The Effects of Potential Land Development on Agricultural Land Prices," Working Paper Series rwp02-012, Harvard University, John F. Kennedy School of Government.
  9. Pavel Ciaian & Johan Swinnen, 2005. "Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis," LICOS Discussion Papers 15805, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  10. Rainey, Ronald L. & Dixon, Bruce L. & Ahrendsen, Bruce L. & Parsch, Lucas D. & Bierlen, Ralph W., 2005. "Arkansas Landlord Selection of Land-Leasing Contract Type and Terms," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 8(01).
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  17. Chantal Le Mouel, 2004. "Impacts of alternative agricultural income support schemes on multiple policy goals," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(2), pages 125-148, June.
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  19. Frédéric Courleux & Hervé Guyomard & Fabrice Levert & Laurent Piet, 2008. "How the EU Single Farm Payment should be modelled: lump-sum transfers, area payments or… what else?," Working Papers SMART - LERECO 08-01, INRA UMR SMART.
  20. Jerzy Michalek & Pavel Ciaian & d’Artis Kancs, 2014. "Capitalization of the Single Payment Scheme into Land Value: Generalized Propensity Score Evidence from the European Union," Land Economics, University of Wisconsin Press, vol. 90(2), pages 260-289.
  21. Salhofer, K., 1996. "Efficient income redistribution for a small country using optimal combined instruments," Agricultural Economics, Blackwell, vol. 13(3), pages 191-199, February.
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  24. 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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  27. Salhofer, K., 1996. "Efficient income redistribution for a small country using optimal combined instruments," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 13(3), February.
  28. Ciaian, Pavel & Swinnen, Johan F.M., 2006. "AJAE Appendix: Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis," American Journal of Agricultural Economics Appendices, Agricultural and Applied Economics Association, vol. 88(4), November.
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  32. Stefan Kilian & Klaus Salhofer, 2007. "Single Payments of the CAP: Where Do the Rents Go?," Discussion Papers 012007, Technische Universität München, Environmental Economics and Agricultural Policy Group, revised 2008.
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