Income Distribution Effects of EU Rural Development Policies: The Case of Farm Investment Support

This paper analyses income distribution effects of investment support granted under the EU Rural Development Policies (RDP). In the short-run and with perfect credit markets, the size of gains for farms depends on the extent to which investment additionality is enforced. If additionality is not enforced, farms gain an important share of the total support but do not have incentive to increase capital use. If additionality is enforced, gains for farms are lower and farms can even lose. With imperfect rural credit markets, farms would most likely prefer to increase capital use even without enforcement of investment additionality and total welfare increases. In the long-run farm benefits from this investment may be enhanced because of the multiplier effect. Introducing minimum thresholds as eligibility criteria may deter small farms from uptaking the investment support even if investment additionally is not enforced. Benefits from investment support are shared with capital suppliers. Gains of capital suppliers depend on the size of the capital supply elasticity and are conditional on the EU support to increase farm capital demand.Rural development policies, policy rents, policy modelling, farm investment.

Ownership and Investment Behaviour in Transition Countries: A Case Study of Collective and Corporate Farms in the Czech Republic. Factor Markets Working Paper No. 17, February 2012

Cooperative and corporate farms have retained an important role for agricultural production in many transition countries of Central and Eastern Europe. Despite this importance, these farms' ownership structure, and particularly the ownership's effect on their investment activity, which is vital for efficient restructuring and the sector's future development, are still not well understood. This paper explores the ownership-investment relationship using data on Czech farms from 1997 to 2008. We allow for ownership-specific variability in farm investment behaviour analyzed by utilizing an error-correction accelerator model. Empirical results suggest significant differences in the level of investment activity, responsiveness to market signals, investment lumpiness, as well as investment sensitivity to financial variables among farms with different ownership characteristics. These differences imply that the internal structure of the Czech cooperative and corporate farms will be developing in the direction of a decreasing number of owners and an increasing ownership concentration

Land, Labour and Capital Markets in European Agriculture: Diversity under a Common Policy. CEPS Paperback. October 2013

Well-functioning factor markets are an essential condition for the competitiveness and sustainable development of agriculture and rural areas. At the same time, the functioning of the factor markets themselves is influenced by changes in agriculture and the rural economy. Such changes can be the result of progress in technology, globalisation and European market integration, changing consumer preferences and shifts in policy. Changes in the Common Agricultural Policy (CAP) over the last decade have particularly affected the rural factor markets. This book analyses the functioning of factor markets for agriculture in the EU-27 and several candidate countries. Written by leading academics and policy analysts from various European countries, these chapters compare the different markets, their institutional framework, their impact on agricultural development and structural change, and their interaction with the CAP. As the first comparative study to cover rural factor markets in Europe, highlighting their diversity − despite the Common Agricultural Policy and an integrated single market − Land, Labour & Capital Markets in European Agriculture provides a timely and valuable source of information at a time of further CAP reform and the continuing transformation of the EU's rural areas

Seasonal time series with missing observations

summary:Popular exponential smoothing methods dealt originally only with equally spaced observations. When time series contains gaps, smoothing constants have to be adjusted. Cipra et al., following Wright’s approach of irregularly spaced observations, have suggested ad hoc modification of smoothing constants for the Holt-Winters smoothing method. In this article the fact that the underlying model of the Holt-Winters method is a certain seasonal ARIMA is used. Minimum mean square error smoothing constants are derived and compared with those of Cipra

Income Distribution Effects of EU Rural Development Policies: The Case of Farm Investment Support

This paper analyses income distribution effects of investment support granted under the EU RDP. It shows that implementation details of the support (the size of allocated funds, enforcement of additionality, eligibility limits) and market conditions (farm heterogeneity, farm access to credit, short-run versus long-run effects) affect income distribution effect of farm the investment support. With certain implementation of the support farms may gain part or even full support (when the additionality is not enforced and the total support is relatively small), while under different conditions farmers may loose (with perfect enforcement of the additionally and with significant increase in capital price). The implementation details interact with market structure and also determine the income distribution effects of the investment support. Introducing minimum thresholds as eligibility criteria may deter small farms from uptaking the investment support while maximum eligibility threshold may restrict big farms to take desired level of support. Benefits from investment support are shared with capital suppliers. Gains of capital suppliers depend on the size of the capital supply elasticity and are conditional on the EU support to increase capital prices

Income Distribution Effects of EU Rural Development Policies: The Case of Farm Investment Support

This paper analyses income distribution effects of investment support granted under the EU RDP. It shows that implementation details of the support (the size of allocated funds, enforcement of additionality, eligibility limits) and market conditions (farm heterogeneity, farm access to credit, short-run versus long-run effects) affect income distribution effect of farm the investment support. With certain implementation of the support farms may gain part or even full support (when the additionality is not enforced and the total support is relatively small), while under different conditions farmers may loose (with perfect enforcement of the additionally and with significant increase in capital price). The implementation details interact with market structure and also determine the income distribution effects of the investment support. Introducing minimum thresholds as eligibility criteria may deter small farms from uptaking the investment support while maximum eligibility threshold may restrict big farms to take desired level of support. Benefits from investment support are shared with capital suppliers. Gains of capital suppliers depend on the size of the capital supply elasticity and are conditional on the EU support to increase capital prices

Structure, Innovations and Performance of the Czech Dairy Value Chain

The effective knowledge transfer and innovation activities in the agri-food supply chain may push all producers in the vertical to improve their competitiveness while saving resources. In the paper the innovation activities and knowledge transfer in the dairy value chain in the Czech Republic are examined in order to assess the potential for enhancing sustainable dairy production. A particular attention is given to the collaboration with R&D organisations and other important agents. Concurrently the role of the structural changes is considered. The methodological approach builds on the concept of the sectoral system of innovation. Based on statistical figures and face to face interviews the increasing dynamics in the innovation process is observed, however, farmers and processors are in their innovation activities disconnected and their collaboration with research institutions and other companies is rather low. The main innovation objectives as well as drivers and barriers of the collaboration are specified

The adoption effect of Common agricultural policy of the European union at development of the czech economy

The objective of this paper is to demonstrate some economywide effects of the adoption of Common Agricultural Policy. The general equilibrium approach is applied. The model is designed as a static computable general equilibrium one. The model structure reflects basic neoclassical assumption, i.e. producers maximize their profit and consumers maximize utility while the government wishes to balance its budget. The scenarios follow the debate about the extent of CAP available for candidate countries. Selected macro and sectoral economic indicators are used to assess the magnitude of scenarios impacts on the national economy. Model simulations indicate that positive aspects of accession prevail over negative ones in the most respects.common agricultural policy, EU enlargement, general equilibrium model, agrarian sector