Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis |
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| Authors: | Pavel Ciaian Johan F.M. Swinnen |
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| Affiliation: | Pavel Ciaian is a researcher at the LICOS Centre for Transition Economics at the University of Leuven (KUL) and at the Slovak Agricultural University in Nitra;. Johan F.M. Swinnen is Professor of Economics and Director of the LICOS Centre for Transition Economics at the University of Leuven (KUL) and Senior Research Fellow at the Center for European Policy Studies (CEPS) in Brussels. |
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| Abstract: | This article analyses how transaction costs and imperfect competition in the land market affect the welfare effects of agricultural subsidies in the new Eastern Member States of the European Union. Benefits of land subsidies end up with landowners in new Eastern Member States also with imperfections in the new Eastern Member States 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, but constrains productivity-enhancing restructuring. Using reserve entitlements to mitigate this effect reduces the intended benefits on distortions and target efficiency. |
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| Keywords: | agricultural policy imperfect competition land market transaction costs |
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