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Decoupled Single Farm Payments of the CAP and Land Rental Prices

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  • Feichtinger, Paul
  • Salhofer, Klaus

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

  • Feichtinger, Paul & Salhofer, Klaus, 2016. "Decoupled Single Farm Payments of the CAP and Land Rental Prices," Discussion Papers DP-65-2016, University of Natural Resources and Life Sciences, Vienna, Department of Economics and Social Sciences, Institute for Sustainable Economic Development.
  • Handle: RePEc:zbw:inwedp:dp652016
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    More about this item

    Keywords

    capitalization; decoupled subsidies; Common Agricultural Policy; land rental prices;
    All these keywords.

    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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