IDEAS home Printed from https://ideas.repec.org/a/zbw/espost/302221.html
   My bibliography  Save this article

“For whoever has will be given more”? Land rental decisions and technical efficiency in Ukraine

Author

Listed:
  • Kvartiuk, Vasyl
  • Bukin, Eduard
  • Herzfeld, Thomas

Abstract

Land rental markets had played a critical role in providing farms access to Ukraine’s agricultural land before the ban on land sales was lifted in 2021. This paper examines whether rental-based land relations can promote land use by more productive farms in the context of imperfect institutions. In particular, we examine whether Ukrainian farms’ decisions to rent land are linked to their agricultural ability. Utilizing a rich panel of more than 16,000 Ukrainian commercial agricultural producers for 2005–2015, we analyze demand-side determinants of participation in the land rental market. The evidence suggests that farms’ total factor productivity is disconnected from their decisions to rent land. Land accumulation appears to be driven by other context-related factors, including existing local land concentration and orientation toward cash crop production. Results call for launching a land sales market and improving rental market infrastructure because these measures can align land rental prices with the value of the marginal product of land.

Suggested Citation

  • Kvartiuk, Vasyl & Bukin, Eduard & Herzfeld, Thomas, 2024. "“For whoever has will be given more”? Land rental decisions and technical efficiency in Ukraine," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 146.
    • Handle: RePEc:zbw:espost:302221
    DOI: 10.1016/j.landusepol.2024.107336
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/302221/1/Kvartiuk_2024_Land_rental_decisions.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.landusepol.2024.107336?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Qiu, Tongwei & Boris Choy, S.T. & Li, Shangpu & He, Qinying & Luo, Biliang, 2020. "Does land renting-in reduce grain production? Evidence from rural China," Land Use Policy, Elsevier, vol. 90(C).
    2. Sabien Dobbelaere & Jacques Mairesse, 2013. "Panel data estimates of the production function and product and labor market imperfections," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(1), pages 1-46, January.
    3. Kvartiuk, Vasyl & Petrick, Martin, 2021. "Liberal land reform in Kazakhstan? The effect on land rental and credit markets," World Development, Elsevier, vol. 138(C).
    4. Barrett, Christopher B. & Bellemare, Marc F. & Hou, Janet Y., 2010. "Reconsidering Conventional Explanations of the Inverse Productivity-Size Relationship," World Development, Elsevier, vol. 38(1), pages 88-97, January.
    5. Deininger, Klaus & Jin, Songqing, 2005. "The potential of land rental markets in the process of economic development: Evidence from China," Journal of Development Economics, Elsevier, vol. 78(1), pages 241-270, October.
    6. de Janvry, Alain & Gordillo, Gustavo & Sadoulet, Elisabeth & Platteau, Jean-Philippe (ed.), 2001. "Access to Land, Rural Poverty, and Public Action," OUP Catalogue, Oxford University Press, number 9780199242177.
    7. Schmidt, Peter & Sickles, Robin C, 1984. "Production Frontiers and Panel Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(4), pages 367-374, October.
    8. repec:lic:licosd:17907 is not listed on IDEAS
    9. repec:zbw:iamodp:158730 is not listed on IDEAS
    10. Marten Graubner & Igor Ostapchuk & Taras Gagalyuk, 2021. "Agroholdings and land rental markets: a spatial competition perspective," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 48(1), pages 158-206.
    11. Biliang Luo, 2018. "40-year reform of farmland institution in China: target, effort and the future," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 10(1), pages 16-35, February.
    12. Pingali, Prabhu, 2007. "Agricultural Mechanization: Adoption Patterns and Economic Impact," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 54, pages 2779-2805, Elsevier.
    13. Hans P. Binswanger & Klaus Deininger, 1997. "Explaining Agricultural and Agrarian Policies in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 1958-2005, December.
    14. Petrick, Martin & Wandel, Jürgen & Karsten, Katharina, 2011. "Farm restructuring and agricultural recovery in Kazakhstan's grain region: An update," IAMO Discussion Papers 158730, Institute of Agricultural Development in Transition Economies (IAMO).
    15. Amartya K. Sen, 1966. "Peasants and Dualism with or without Surplus Labor," Journal of Political Economy, University of Chicago Press, vol. 74(5), pages 425-425.
    16. Eswaran, Mukesh & Kotwal, Ashok, 1986. "Access to Capital and Agrarian Production Organisation," Economic Journal, Royal Economic Society, vol. 96(382), pages 482-498, June.
    17. Martinelli, Pablo, 2014. "Latifundia revisited: Market power, land inequality and agricultural efficiency. Evidence from interwar Italian agriculture," Explorations in Economic History, Elsevier, vol. 54(C), pages 79-106.
    18. Klaus Deininger & Denys Nizalov & Sudhir K Singh, 2018. "Determinants of Productivity and Structural Change in a Large Commercial Farm Environment: Evidence from Ukraine," The World Bank Economic Review, World Bank, vol. 32(2), pages 287-306.
    19. Place, Frank, 2009. "Land Tenure and Agricultural Productivity in Africa: A Comparative Analysis of the Economics Literature and Recent Policy Strategies and Reforms," World Development, Elsevier, vol. 37(8), pages 1326-1336, August.
    20. Lerman, Zvi & Sedik, David & Pugachov, Nikolai & Goncharuk, Aleksandr, 2007. "Rethinking agricultural reform in Ukraine," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 38, number 92325.
    21. Huy, Hoang Trieu & Nguyen, Trung Thanh, 2019. "Cropland rental market and farm technical efficiency in rural Vietnam," Land Use Policy, Elsevier, vol. 81(C), pages 408-423.
    22. Min, Shi & Waibel, Hermann & Huang, Jikun, 2017. "Smallholder participation in the land rental market in a mountainous region of Southern China: Impact of population aging, land tenure security and ethnicity," Land Use Policy, Elsevier, vol. 68(C), pages 625-637.
    23. Siddhartha Dasgupta & Thomas O. Knight & H. Alan Love, 1999. "Evolution of Agricultural Land Leasing Models: A Survey of the Literature," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 21(1), pages 148-176.
    24. Biliang Luo, 2018. "40-year reform of farmland institution in China: target, effort and the future," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 10(1), pages 16-35, February.
    25. Besley, Timothy, 1995. "Property Rights and Investment Incentives: Theory and Evidence from Ghana," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 903-937, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. C. S. C. Sekhar & Namrata Thapa, 2023. "Rural market imperfections in India: Revisiting old debates with new evidence," Development Policy Review, Overseas Development Institute, vol. 41(5), September.
    2. Deininger, Klaus & Nizalov, Denys & Singh, Sudhir K, 2013. "Are mega-farms the future of global agriculture ? exploring the farm size-productivity relationship," Policy Research Working Paper Series 6544, The World Bank.
    3. Deininger, Klaus & Hilhorst, Thea & Songwe, Vera, 2014. "Identifying and addressing land governance constraints to support intensification and land market operation: Evidence from 10 African countries," Food Policy, Elsevier, vol. 48(C), pages 76-87.
    4. Kvartiuk, Vasyl & Petrick, Martin, 2021. "Liberal land reform in Kazakhstan? The effect on land rental and credit markets," World Development, Elsevier, vol. 138(C).
    5. Klaus Deininger & Denys Nizalov & Sudhir K Singh, 2013. "Are mega-farms the future of global agriculture? Exploring the farm size-productivity relationship for large commercial farms in Ukraine," Discussion Papers 49, Kyiv School of Economics.
    6. C.S.C Sekhar & Namrata Thapa, 2021. "Agricultural Market Imperfections And Farm Profitability In India," IEG Working Papers 440, Institute of Economic Growth.
    7. Deng, Xin & Xu, Dingde & Zeng, Miao & Qi, Yanbin, 2019. "Does early-life famine experience impact rural land transfer? Evidence from China," Land Use Policy, Elsevier, vol. 81(C), pages 58-67.
    8. Thomas Vendryes, 2014. "Peasants Against Private Property Rights: A Review Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 971-995, December.
    9. Holden, Stein T. & Otsuka, Keijiro, 2014. "The roles of land tenure reforms and land markets in the context of population growth and land use intensification in Africa," Food Policy, Elsevier, vol. 48(C), pages 88-97.
    10. C.S.C. Sekhar, 2021. "Price or income support to farmers? Policy options and implications," IEG Working Papers 420, Institute of Economic Growth.
    11. Taylor, Matthew P.H. & Helfand, Steven M., 2021. "The Farm Size – Productivity Relationship in the Wake of Market Reform: An Analysis of Mexican Family Farms," 2021 Conference, August 17-31, 2021, Virtual 315138, International Association of Agricultural Economists.
    12. Heath Henderson & Leonardo Corral & Eric Simning & Paul Winters, 2015. "Land Accumulation Dynamics in Developing Country Agriculture," Journal of Development Studies, Taylor & Francis Journals, vol. 51(6), pages 743-761, June.
    13. von Braun, Joachim & Mirzabaev, Alisher, 2015. "Small Farms: Changing Structures and Roles in Economic Development," Discussion Papers 210464, University of Bonn, Center for Development Research (ZEF).
    14. Heltberg, Rasmus, 1998. "Rural market imperfections and the farm size-- productivity relationship: Evidence from Pakistan," World Development, Elsevier, vol. 26(10), pages 1807-1826, October.
    15. Omotilewa, Oluwatoba J. & Jayne, T.S. & Muyanga, Milu & Aromolaran, Adebayo B. & Liverpool-Tasie, Lenis Saweda O. & Awokuse, Titus, 2021. "A revisit of farm size and productivity: Empirical evidence from a wide range of farm sizes in Nigeria," World Development, Elsevier, vol. 146(C).
    16. Mengistu Assefa Wendimu & Arne Henningsen & Tomasz Gerard Czekaj, 2017. "Incentives and moral hazard: plot level productivity of factory-operated and outgrower-operated sugarcane production in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 48(5), pages 549-560, September.
    17. Akhmadiyeva, Zarema & Herzfeld, Thomas, 2021. "How does practice matches land laws in Central Asia?," Land Use Policy, Elsevier, vol. 109(C).
    18. Kvartiuk, Vasyl & Herzfeld, Thomas, 2019. "Welfare effects of land market liberalization scenarios in Ukraine: Evidence-based economic perspective," IAMO Discussion Papers 287762, Institute of Agricultural Development in Transition Economies (IAMO).
    19. Yuanyuan Chen & Mu Li & Zemin Zhang, 2023. "Does the Rural Land Transfer Promote the Non-Grain Production of Cultivated Land in China?," Land, MDPI, vol. 12(3), pages 1-16, March.
    20. Ferreira, Marcelo Dias Paes & Féres, José Gustavo, 2020. "Farm size and Land use efficiency in the Brazilian Amazon," Land Use Policy, Elsevier, vol. 99(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:espost:302221. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.