Capitalisation of government support in agricultural land prices in the Czech Republic

Laure Latruffe, Tomas Doucha, Chantal Le Mouël, Tomas Medonos and Vaclav Voltr
Additional contact information
Tomas Doucha: VUZE - Research Institute of Agricultural Economics
Tomas Medonos: VUZE - Research Institute of Agricultural Economics
Vaclav Voltr: VUZE - Research Institute of Agricultural Economics

Post-Print from HAL

Abstract: The recent implementation of CAP area payments (the Single Area Payments, SAP) in the New Member States of the EU raises the question of whether a quick capitalisation of these payments is expected. Evidence of capitalisation of public support to agriculture into land prices indicates that benefits are partly transferred toward landowners rather than toward the targeted population (the producers). This distributional aspect is of particular importance in countries where a large proportion of land is farmed by producers who do not own this land, such as in the Czech Republic where corporate farms and large individual farms cultivate most of the agricultural area of the country, but rent more than 90% of it from millions of private landowners. This study investigates the influence of several types of support on Czech agricultural land prices from private transactions between 1995-2001. The results show that only direct payments have been capitalised into land prices. This capitalisation occurred in spite of the payments' low level and of an imperfectly functioning land market, suggesting that such type of support is most easily transferred to land values. If the rate of capitalisation of such payments continues or even increases in the future (the SAP are relatively high compared with what Czech farmers used to receive before accession), this might threaten the farming activity in this country, as farms are almost only tenanted. And because most of the landowners live in towns, there is a risk of an extreme leakage of support not only outside the farming sector, but also outside the rural sector.

Keywords: LAND PRICE; CAPITALISATION; PUBLIC SUPPORT; DIRECT PAYMENT; république tchèque; europe; agriculture (search for similar items in EconPapers)
Date: 2006-09-22
Note: View the original document on HAL open archive server: https://hal.science/hal-02285587v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in 93. EAAE seminar : Impacts of decoupling and cross compliance on agriculture in the enlarged EU, European Association of Agricultural Economists (EAAE). INT., Sep 2006, Prague, Czech Republic. 12 p

Downloads: (external link)
https://hal.science/hal-02285587v1/document (application/pdf)

Related works:
Journal Article: Capitalisation of government support in agricultural land prices in the Czech Republic (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02285587

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().