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Land Rental Markets and Household Farms in Transition: Theory and Evidence from Hungary

  • Johan Swinnen
  • Liesbet Vranken

This paper analyses the determinants of household farms?participation in land rental markets in transition countries and what affects their access to land through rental markets. We derive several theoretical hypotheses on the impact of households?management ability, land endowment, land quality and prices, transaction costs in the land market, rural credit and labour market constraints. We test the hypotheses combining a representative dataset on land rental activities of more than 1,400 Hungarian household farms with data from the Hungarian Central Statistical Office. We find that land rental markets reallocate land to households with better farm management capacities and less endowed with land. Households combine buying and renting of land to extend their farms. The continued domination of large farm organizations in some regions restricts household's access to land. Rural credit and labour market imperfections have an important impact on land rental markets.

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File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp129.pdf
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Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 12903.

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Length: 35 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:lic:licosd:12903
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  1. de Janvry, Alain & Gordillo, Gustavo & Sadoulet, Elisabeth & Platteau, Jean-Philippe (ed.), 2001. "Access to Land, Rural Poverty, and Public Action," OUP Catalogue, Oxford University Press, number 9780199242177, March.
  2. Emmanuel Skoufias, 1995. "Household Resources, Transaction Costs, and Adjustment through Land Tenancy," Land Economics, University of Wisconsin Press, vol. 71(1), pages 42-56.
  3. Lerman, Zvi, 2001. "Agriculture in transition economies: from common heritage to divergence," Agricultural Economics, Blackwell, vol. 26(2), pages 95-114, November.
  4. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  5. Lerman, Zvi, 2001. "Agriculture in transition economies: from common heritage to divergence," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 26(2), November.
  6. Mathijs, Erik & Swinnen, Johan F M, 1998. "The Economics of Agricultural Decollectivization in East Central Europe and the Former Soviet Union," Economic Development and Cultural Change, University of Chicago Press, vol. 47(1), pages 1-26, October.
  7. Swinnen, Johan F. M. & Gow, Hamish R., 1999. "Agricultural credit problems and policies during the transition to a market economy in Central and Eastern Europe," Food Policy, Elsevier, vol. 24(1), pages 21-47, February.
  8. Swinnen, Johan F. M., 2002. "Political reforms, rural crises, and land tenure in western Europe," Food Policy, Elsevier, vol. 27(4), pages 371-394, August.
  9. Yang Yao, 2000. "The Development of the Land Lease Market in Rural China," Land Economics, University of Wisconsin Press, vol. 76(2), pages 252-266.
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