Where Have All the Farmers Gone? EU Accession and Structural Change in Bulgaria.

The accession to the European Union (EU) led to dramatic changes in agricultural employment in the new member states and several studies indicate that the introduction of stringent requirements related to food quality was the main reason for the dramatic decline in the number of farmers. This is expected to have important welfare implications for the rural population as especially small, poor farmers, who are not able to make the necessary investments, would be excluded from the value chain. This paper uses a unique dataset based on a panel survey of 295 farm households in the North and South Central Region of Bulgaria. There are four main results. First, we find evidence of a large outflow of agricultural labour from dairy farming activities and 55% of the farm households, which we interviewed in 2009 and that were supplying to a dairy processor in 2003, stopped supplying in 2009. Second, the survey results show that when asked about the main reasons for quitting, households mention the ageing of the household and health problems, but not an increase in quality regulation. Third, we find that an increase in off farm employment alternatives have contributed positively to the decrease in dairy deliveries. Fourth, we find no evidence of negative welfare implications for those farm households who stopped their commercial dairy activities.

Direct payments and rent extraction by land owners: Evidence form New Member States

Since the accession of the eight Central and Eastern European countries, farmers in these countries started to receive substantial agricultural subsidies. Agricultural subsidies alter farmer production incentives and thus factor demand and factor prices. Hence, agricultural support has an impact on land rents. This paper analyses the impact of the introduction of direct payments on land rents in the new member states and correlates econometrically land rental price data with support measures while controlling for other effects. The impact of direct payments on land rents is not only found to be statistically significant, but also economically important as 15% of the direct payments are capitalized in land rents in the new member states.Land rental prices, Farm subsidies, New member states, Agricultural and Food Policy, Q12, Q18,

Agricultural Productivity in Transition Economies

Productivity Analysis,

Direct Payments and Land Rents: Evidence from New Member States. Factor Markets Working Document No. 62, August 2013

This Factor Markets Working Paper analyses the impact of increasing direct payments on land rents in six new EU member states in which agricultural subsidies largely increased as a result of their EU accession. The authors find that up to 25 eurocents per additional euro of direct payments is capitalised in land rents. In addition, the results show that capitalisation of direct payments is higher in more credit constrained markets, while capitalisation of direct payments is lower in countries where more land is used by corporate farms

Institutional Factors Affecting Agricultural Land Markets

This paper analyses the main institutional factors affecting the rental and sales markets for agricultural land. Particular attention is paid to the effects of the common agricultural policy on land markets, and more specifically the underlying mechanism through which agricultural subsidies are capitalised into land values and farmland rents. This paper also provides a broad overview of the empirical studies that estimate the impact of agricultural support policies on land rents and land prices. Various other fundamental factors that affect agricultural land markets are discussed, such as land market institutions and regulations, transaction costs, credit market constraints and levels of profitability, the legal means of contract enforcement and land use alternatives.