We study the capitalisation of subsidies in the European Union (EU) regions in the years 2006-2008, the first years after the introduction of the Common Agricultural Policy (CAP) 2003 reform that decoupled subsidies from production and attached them to land. For this purpose, we use regional aggregated data and estimate the capitalisation rate upon the entire sample and, in a second stage, splitting the sample according to the implementation regime applied by the different EU Member States (MSs), following the three options introduced by the CAP regulations (historical, regional and hybrid model). We find that between 28 and 52 cents per Euro of additional subsidy capitalise into land prices in MSs that adopted the hybrid and the regional model, respectively. We find as well that subsidies do not capitalise in farmland prices in MSs that adopted the historical model.

The capitalisation of decoupled payments in farmland rents among EU regions / Guastella, Gianni; Moro, Daniele; Sckokai, Paolo; Veneziani, Mario. - In: BIO-BASED AND APPLIED ECONOMICS. - ISSN 2280-6172. - 10:1(2021), pp. 7-17. [10.36253/bae-10034]

The capitalisation of decoupled payments in farmland rents among EU regions

Veneziani, Mario
2021

Abstract

We study the capitalisation of subsidies in the European Union (EU) regions in the years 2006-2008, the first years after the introduction of the Common Agricultural Policy (CAP) 2003 reform that decoupled subsidies from production and attached them to land. For this purpose, we use regional aggregated data and estimate the capitalisation rate upon the entire sample and, in a second stage, splitting the sample according to the implementation regime applied by the different EU Member States (MSs), following the three options introduced by the CAP regulations (historical, regional and hybrid model). We find that between 28 and 52 cents per Euro of additional subsidy capitalise into land prices in MSs that adopted the hybrid and the regional model, respectively. We find as well that subsidies do not capitalise in farmland prices in MSs that adopted the historical model.
The capitalisation of decoupled payments in farmland rents among EU regions / Guastella, Gianni; Moro, Daniele; Sckokai, Paolo; Veneziani, Mario. - In: BIO-BASED AND APPLIED ECONOMICS. - ISSN 2280-6172. - 10:1(2021), pp. 7-17. [10.36253/bae-10034]
File in questo prodotto:
File Dimensione Formato  
Guastella et al. (2021) The capitalisation of decoupled payments in farmland rents among EU regions BAE.pdf

accesso aperto

Tipologia: Versione (PDF) editoriale
Licenza: Creative commons
Dimensione 440.45 kB
Formato Adobe PDF
440.45 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11381/2912994
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? 1
social impact