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Decoupled Single Farm Payments of the CAP and Land Rental Prices

Author

Listed:
  • Paul Feichtinger
  • Klaus Salhofer

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

Abstract

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.

Suggested Citation

  • Paul Feichtinger & Klaus Salhofer, 2016. "Decoupled Single Farm Payments of the CAP and Land Rental Prices," Working Papers 652016, Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Life Sciences, Vienna.
  • Handle: RePEc:sed:wpaper:652016
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    capitalization; decoupled subsidies; Common Agricultural Policy; land rental prices;

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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