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The incidence of biogas feed-in tariffs on farmland rental rates – evidence from northern Germany

Author

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  • Solveigh Hennig
  • Uwe Latacz-Lohmann

Abstract

This paper investigates the effects of biogas production on farmland rental rates. We clarify the mechanisms by which biogas subsidies can inflate land rents and how regional livestock density may reinforce this effect. We use spatial econometrics to explain arable land rents in northern Germany based on 2010 agricultural census data. The results indicate that increasing biogas density is associated with a significant rise in the rental rates of arable land only in regions with high livestock densities. In biogas-intensive regions, biogas production is estimated to inflate land rents by €61 to €141 per hectare, depending on regional livestock densities.

Suggested Citation

  • Solveigh Hennig & Uwe Latacz-Lohmann, 2017. "The incidence of biogas feed-in tariffs on farmland rental rates – evidence from northern Germany," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 44(2), pages 231-254.
    • Handle: RePEc:oup:erevae:v:44:y:2017:i:2:p:231-254.
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    File URL: http://hdl.handle.net/10.1093/erae/jbw023
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    Citations

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    Cited by:

    1. Stefan Seifert & Silke Hüttel, 2023. "Is there a risk of a winner’s curse in farmland auctions?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(3), pages 1140-1177.
    2. Xinyue Yang & Martin Odening & Matthias Ritter, 2019. "The Spatial and Temporal Diffusion of Agricultural Land Prices," Land Economics, University of Wisconsin Press, vol. 95(1), pages 108-123.
    3. Marten Graubner, 2018. "Lost in space? The effect of direct payments on land rental prices," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(2), pages 143-171.
    4. Plogmann, Jana & Mußhoff, Oliver & Odening, Martin & Ritter, Matthias, 2020. "What Moves the German Land Market? A Decomposition of the Land Rent-Price Ratio," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 69(1).
    5. Henning Schaak & Oliver Musshoff, 2022. "The distribution of the rent–price relationship of agricultural land in Germany," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(3), pages 696-718.
    6. Schaak, Henning & Mußhoff, Oliver, 2020. "A geoadditive distributional regression analysis of the local relationship of land prices and land rents in Germany," FORLand Working Papers 20 (2020), Humboldt University Berlin, DFG Research Unit 2569 FORLand "Agricultural Land Markets – Efficiency and Regulation".
    7. Venus, Terese E. & Strauss, Felix & Venus, Thomas J. & Sauer, Johannes, 2021. "Understanding stakeholder preferences for future biogas development in Germany," Land Use Policy, Elsevier, vol. 109(C).
    8. Hennig Solveigh & Breustedt Gunnar, 2018. "The Incidence of Agricultural Subsidies on Rental Rates for Grassland," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 238(2), pages 125-156, April.
    9. Mtaturu, Japhet Zephyr, 2024. "Farm location and occupational choices in Sub-Saharan Africa: Implications for agricultural households in Tanzania," Emerging Markets Review, Elsevier, vol. 58(C).

    More about this item

    Keywords

    renewable energy act; biogas production; farmland rental rates; spatial econometrics;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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