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Decoupled Single Farm Payments of the CAP and Land Rental Prices

Listed author(s):
  • Paul Feichtinger
  • Klaus Salhofer

    ()

    (Institute for Sustainable Economic Development, University of Natural Resources and Life Sciences Vienna)

This paper contributes to the discussion on the extent of the capitalization of decoupled direct payments into land rental prices. Based on a dynamic panel model and an extensive dataset for Bavaria for 2005 to 2011, we show that a significant number of Single Farm Payments (SFPs) of the European Union (EU) Common Agricultural Policy (CAP) are captured by landowners rather than by active farmers. However, the degree of capitalization varies considerably among regions, from almost 0 to 56 cents per each additional Euro paid.

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Paper provided by Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Life Sciences, Vienna in its series Working Papers with number 652016.

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Length: 32 pages
Date of creation: Sep 2016
Handle: RePEc:sed:wpaper:652016
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