Farmland tenure and transaction costs: Public and collectively owned land vs conventional coordination mechanisms in France

Régime de tenure foncière et coûts de transaction: terres publiques et collectives vs mécanismes de coordination classiques en France

Christine Léger-Bosch ()
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Christine Léger-Bosch: Territoires - Territoires - AgroParisTech - VAS - VetAgro Sup - Institut national d'enseignement supérieur et de recherche en alimentation, santé animale, sciences agronomiques et de l'environnement - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - UCA - Université Clermont Auvergne

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Abstract: To preserve farmland in industrialized countries, public initiatives or initiatives from nongovernmental organizations increasingly rely on Long‐term and Full Rights Acquisitions of land (LFRAs). The objective of this article is to help assess whether those actions provide profitable access to land use for lessee farms. We compare the economic implications for farms of this mode of access to land use with the two other main modes: conventional lease arrangements and purchasing transactions. The analysis focuses on the transaction costs relative to the cost of exchange, that is, including purchase/rental price, and to the financial benefits of the transaction. We use original data on costs provided by a survey of farmers within a French region. Our results suggest that the ex ante transaction costs incurred by farmers involved in LFRAs, as a percentage of the exchange cost of accessing land use, are lower than those in purchasing transactions and higher than those in conventional lease arrangements. The difference between the two types of lease arrangements is due to negotiation costs, which are doubled in LFRAs. In conclusion, making the involvement of tenant farmers in the construction of LFRAs more effective would allow these initiatives to better achieve their goals.

Date: 2019
Note: View the original document on HAL open archive server: https://hal.science/hal-02573765v1
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Published in Canadian Journal of Agricultural Economics / Revue canadienne d'agroeconomie, 2019, 67 (3), pp.283-301. ⟨10.1111/cjag.12206⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02573765

DOI: 10.1111/cjag.12206

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