LAND MARKET IMPERFECTIONS AND AGRICULTURAL POLICY IMPACTS IN THE NEW EU MEMBER STATES: A PARTIAL EQUILIBRIUM ANALYSIS

Pavel Ciaian and Johan Swinnen

No 31864, PRG Working Papers from Katholieke Universiteit Leuven, LICOS - Centre for Institutions and Economic Performance

Abstract: This paper analyses how market imperfections affect the welfare effects of introducing the CAP in the new Eastern Member States (NEMS) of the EU. We model how transaction costs and imperfect competition in the land market affect the distribution of policy rents. We find that benefits of direct payments end up with landowners in NEMS also with imperfections in the NEMS land markets. With unequal access to subsidies small tenant farmers may even lose out from the subsidies. Decoupling of payments shifts policy rents to farmers. However, decoupling will constrain productivity enhancing restructuring which would result from accession induced improvements in the land markets. Using reserve entitlements to mitigate this effect reduces the intended benefits on distortions and target efficiency.

Keywords: Agricultural and Food Policy; Land Economics/Use (search for similar items in EconPapers)
Pages: 48
Date: 2005
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:kuliwp:31864

DOI: 10.22004/ag.econ.31864

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