The Factors Affecting Farmland Rental Prices in Slovakia

Ivan Takáč, Jarmila Lazíková, Ľubica Rumanovská, Anna Bandlerová and Zuzana Lazíková
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Ivan Takáč: Department of European Policies, Slovak University of Agriculture in Nitra, 94976 Nitra, Slovakia
Jarmila Lazíková: Department of Law, Slovak University of Agriculture in Nitra, 94976 Nitra, Slovakia
Ľubica Rumanovská: Department of European Policies, Slovak University of Agriculture in Nitra, 94976 Nitra, Slovakia
Anna Bandlerová: Department of Law, Slovak University of Agriculture in Nitra, 94976 Nitra, Slovakia
Zuzana Lazíková: Department of Law, Slovak University of Agriculture in Nitra, 94976 Nitra, Slovakia

Land, 2020, vol. 9, issue 3, 1-18

Abstract: Agricultural land is a limited natural resource with increasing economic value. This study analyses land rental relationships in Slovakia, including legal rental regulations, and identifies the impact of certain factors, such as the European Union Common Agricultural Policy (CAP) payments, and geographical and economic factors on land rental prices. From the results of econometric models, it was found that certain CAP payments have an effect on rental prices, mainly the single area payment scheme (SAPS), payments for agri-environmental-climate schemes (AECS), and animal welfare, which were found to have positive effects. Other important factors found to influence rental prices are economic indicators (such as total revenue share of total costs, share of revenue from agricultural production in terms of total revenue, share of production costs as a percentage of total costs, wages, and number of employees) and geographical factors (such as region or partial production areas). However, the distance of the farm from the district city (LAU 1) and the share of farmland affected by natural constraints do not considerably affect rental prices in Slovakia. Land consolidation is a statistically significant factor according to the models; however, its impact is almost zero. Knowledge of these factors constitutes important know-how, not only for policy makers but also for the actors operating in the land rental market (e.g., landlords, tenants, experts on land valuation, and real estate agents).

Keywords: land rental prices; land ownership; agricultural holdings; European Union Common Agricultural Policy; factors affecting the land rental prices; Slovakia (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2020
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