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Development of Market Prices of Agricultural Land within the Conditions of the EU

Author

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  • Pletichová, D.
  • Gebeltová, Z.

Abstract

Market prices of agricultural land in the world have increased significantly in recent years. Important factors in regard to this trend are not only the fact that land is a basic, irreplaceable resource for the production of food and natural resources of each country, but also the fact that it is generally perceived as a favorable holder of capital, not succumbing to the effects of inflation. Market prices of agricultural land and the rent level in individual EU member countries are affected by historical development, the size structure of agricultural businesses, legislation, regulation of the land market, natural conditions and the intensity of agricultural production (e.g. the Netherlands). Market prices of agricultural land in the Czech Republic are monitored by the Czech Statistical Office (CSO), Institute for Agricultural Economics and Information (IAEI) and Ministry of Agriculture (MoA), but output of the data base is not comparable within a time series 1993-2012, as institutions work with differing methodology. On the basis of the description of prices of agricultural land and regression analysis, the hypothesis that the market price of agricultural land for agricultural use in the Czech Republic is affected primarily by its quality was not confirmed. The official (administrative) price is only an orientational and subsidiary tool for the determination of the market price. The development of the agricultural land market in the Czech Republic was affected by the privatization of land after 2000. According to an estimate (of the author), after the completion of privatization, and also in view of changes in tax policy, the prices of transacted land for agricultural use can decline within 3 years (2014) by up to 30%. It is probable that the demand will be focused on transactions with land for speculative and investment purposes, as, according to world trends, the average increase in value of investments in land in a time of economic crisis is higher (6-7% p.a.) as compared to investments in stock markets (1.8-2.2%). The article has been processed as part of VZ MSM 6046070906 “The economy of resources of Czech agriculture and their effective utilization within multifunctional agricultural-food systems”.

Suggested Citation

  • Pletichová, D. & Gebeltová, Z., 2013. "Development of Market Prices of Agricultural Land within the Conditions of the EU," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 5(3), pages 1-14, September.
    • Handle: RePEc:ags:aolpei:157586
    DOI: 10.22004/ag.econ.157586
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    References listed on IDEAS

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    1. Hurrelmann, Annette, 2008. "Analysing agricultural land markets as organisations: An empirical study in Poland," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 338-349, July.
    2. Pavel Ciaian & d’Artis Kancs & Johan Swinnen, 2010. "EU Land Markets and the Common Agricultural Policy," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(3), pages 1-31.
    3. Shagaida, Natalya, 2007. "Agricultural land market in Russia and large corporate farms," 102nd Seminar, May 17-18, 2007, Moscow, Russia 10014, European Association of Agricultural Economists.
    4. Lloyd, T A & Rayner, A J & Orme, C D, 1991. "Present-Value Models of Land Prices in England and Wales," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 18(2), pages 141-166.
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    Agricultural and Food Policy;

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