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Towards measuring political rents in agriculture: case studies of different agrarian structures in the EU

Author

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  • Bazyli CZYZEWSKI

    (Department of Education and Personnel Development, Poznan University of Economics and Business, Poznan, Poland)

  • Anna MATUSZCZAK

    (Department of Macroeconomics and Agricultural Economics, Poznan University of Economics and Business, Poznan, Poland)

Abstract

It is generally believed that the subsidisation of agriculture serves as a payment of political rents to farmers. Here, we attempt to show that characterisation of the entire amount of subsidies as "political rent" is unjustified in the light of the definition of political rent as formulated in the rent-seeking theory. Political rents in agriculture diverge from the definition, since the resources devoted to rent-seeking partly serve to produce public goods - that part cannot be regarded as wastage. Furthermore, if market imperfections cause rents to be captured by other entities (the treadmill theory), then it is even more true that these benefits are not exclusive. However, it is hard to find any attempts to measure the value of political rents. Thus, a novel methodology is proposed for valuing these items, with the aim of calculating the "pure political rent", based on an input-output (I-O) Leontief approach adopting matrices for "representative farms" according to EUFADN typology and on a decomposition of the Hicks-Moorsteen TFP index for the period 2007-2012 for four countries: Slovakia, France, Austria and Poland.

Suggested Citation

  • Bazyli CZYZEWSKI & Anna MATUSZCZAK, 2018. "Towards measuring political rents in agriculture: case studies of different agrarian structures in the EU," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(3), pages 101-114.
    • Handle: RePEc:caa:jnlage:v:64:y:2018:i:3:id:286-2016-agricecon
    DOI: 10.17221/286/2016-AGRICECON
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    References listed on IDEAS

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    1. Andrius Kazukauskas & Carol Newman & Daragh Clancy & Johannes Sauer, 2013. "Disinvestment, Farm Size, and Gradual Farm Exit: The Impact of Subsidy Decoupling in a European Context," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(5), pages 1068-1087.
    2. Timothy J. Coelli & D.S. Prasada Rao & Christopher J. O’Donnell & George E. Battese, 2005. "An Introduction to Efficiency and Productivity Analysis," Springer Books, Springer, edition 0, number 978-0-387-25895-9, June.
    3. Daniel A. Sumner, 2014. "American Farms Keep Growing: Size, Productivity, and Policy," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 147-166, Winter.
    4. Yanwen Tan & Jianbo Guan & Hamid Reza Karimi, 2013. "The Impact of the Subsidy Policy on Total Factor Productivity: An Empirical Analysis of China's Cotton Production," Mathematical Problems in Engineering, Hindawi, vol. 2013, pages 1-8, March.
    5. Zhuo Chen & Wallace E. Huffman & Scott Rozelle, 2011. "Inverse Relationship Between Productivity And Farm Size: The Case Of China," Contemporary Economic Policy, Western Economic Association International, vol. 29(4), pages 580-592, October.
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