Assessing impacts of CAP reform in France and Germany

The 2003 CAP Reform left EU member states much room for national implementation. The farm group model EU-FARMIS is applied to quantify the effects of the reform and the impacts of the options for national implementation. The analysis is done for France and Germany because their implementation schemes adequately reflect the broad range of options. It is found that cereal and fodder maize production is reduced both in France and Germany. In contrast, the acreage of other arable fodder crops, of set-aside and of non-food crops is expanded. While bull fattening is substantially reduced in both countries, suckler cow production is extended in France due to partial decoupling, but reduced in Germany due to full decoupling. Sectoral income effects measured in Farm Net Value Added are similar. The regional implementation of decoupling in Germany induces a significant redistribution of direct payments and therefore causes differences in income effects depending on farm type, location and size.CAP Reform, decoupling, farm group model, FADN, Agricultural and Food Policy, Land Economics/Use,

Do development projects link smallholdrs to markets?

The objective of this paper is to understand the mechanisms by which development projects facilitate market linkage of smallholder farmers based on panel data from Nicaragua. We find that activities related to entrepreneurial practices have positive and statistically significant effect on commercialization. We also find that increased commercialization is positively correlated with total bean sales income, suggesting a positive indirect effect of the activities. Other activities demonstrate no positive and robust effect on commercialization while direct positive effects on sales income can be observed. This implies that market linkage of smallholder farmers require different sets of intervention tools than traditional farm technical assistance

PRICE FORMATION IN AGRICULTURAL LAND MARKETS HOW DO DIFFERENT ACQUIRING PARTIES AND SELLERS MATTER?

This paper sets out to empirically analyse land price formation in Saxony-Anhalt with the aim to quantify the impact of sellers’ and acquiring parties’ structural identity on land prices. We use a hedonic price regression with a detailed data set covering the years 2009–2010. Besides productivity, neighbourhood and location attributes, we control for the major privatization agency as a seller, farmers as sellers or buyers and if tenants purchase the land. The model is estimated using spatial-econometric techniques where weight matrices are not only based on pure air distances, but also on travel time. We further take into account that price levels of adjacent parcels have an impact but only if they are observed prior to the respective price formation process. We find that prices realised by the major privatization agency are on average higher, and if the former tenant purchases the land, a lower price is realized

FORCED SALES AND FARMLAND PRICES

In this paper we analyse agricultural land prices in the state Brandenburg. Our objective is to understand the price formation in foreclosures. Knowledge of the impact of foreclosures is desirable for the determination of mortgage lending values. The effect of foreclosures can be decomposed into two parts. First, the effect of a pressured sale, which will likely reduce the realized price compared with an unpressured sale and second, the effect of an auction, which may lead to a price premium. The empirical analysis is based on a rich data set of land prices in Brandenburg between 2000 and 2011 provided by the “Oberer Gutachterausschuss für Grundstückswerte”. The treatment effect of forced sales is derived by means of a statistical matching approach. Our results show that on average prices premia rather than price discounts are realized in forced sales of agricultural land. The price differential between forced and nonforced sales, however, is not constant but depends on the land market conditions

Forced Sales and Farmland Prices

In this paper we analyse agricultural land prices in the German Federal State of Brandenburg within the period 2000-2011. Our objective is to understand the price formation process in foreclosures. One effect of foreclosures relates to pressured sales, which likely lead to a price discount, and another effect relates to public auctions leading to a price premium. The overall effect is derived using direct covariate matching. Our results show that on average, price premia rather than price discounts are realized in forced sales of farmland. The price differential, however, is not constant and depends on prevailing land market conditions

REVISITING THE RELATIONSHIP BETWEEN LAND PRICE AND PARCEL SIZE

Hedonic land price models often use parcel size as an explanatory variable. Empirical analyses, however, are rather ambiguous regarding the direction and the size of the effect of this variable on farmland values. The objective of this paper is to investigate this size-price relation in detail and to derive recommendations for an appropriate specification of hedonic land price models. Our analysis consists of three steps. First, we conduct a meta-analysis based on a comprehensive literature review. Second, we analyze a dataset of more than 80,000 land transactions in Saxony-Anhalt, Germany, using the non-parametric locally weighted scatterplot smoothing (LOWESS) estimator. This unconditional smoothing algorithm identifies negative size-price relations for very small and large plots, whereas it finds a positive relation for medium plot. We use this finding in our third step, a hedonic land price model, in which the size-price relation is modelled conditional on land and buyer characteristics. From these steps, we conclude that the complex relationship between land price and plot size cannot be captured by a simple functional form since it is affected by several economic factors, such as economies of size, transaction cost, and financial constraints

REVISITING THE RELATIONSHIP BETWEEN LAND PRICE AND PARCEL SIZE

Hedonic land price models often use parcel size as an explanatory variable. Empirical analyses, however, are rather ambiguous regarding the direction and the size of the effect of this variable on farmland values. The objective of this paper is to investigate this size-price relation in detail and to derive recommendations for an appropriate specification of hedonic land price models. Our analysis consists of three steps. First, we conduct a meta-analysis based on a comprehensive literature review. Second, we analyze a dataset of more than 80,000 land transactions in Saxony-Anhalt, Germany, using the non-parametric locally weighted scatterplot smoothing (LOWESS) estimator. This unconditional smoothing algorithm identifies negative size-price relations for very small and large plots, whereas it finds a positive relation for medium plot. We use this finding in our third step, a hedonic land price model, in which the size-price relation is modelled conditional on land and buyer characteristics. From these steps, we conclude that the complex relationship between land price and plot size cannot be captured by a simple functional form since it is affected by several economic factors, such as economies of size, transaction cost, and financial constraints