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The persistence of the corporate farms: they survived the transition but do they have future under the CAP

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  • Latruffe, Laure
  • Davidova, Sophia
  • Blaas, Gejza

Abstract

The newly emergent landowners in the 1990s left their land in the corporate farms due to the low level of farm profitability and the high risk in the general economic environment. The accession to the EU and the introduction of the CAP Single Area Payment (SAP) could induce incentives to landowners to withdraw their land if they are not satisfied with the level of rent. The negotiations between the corporate farm managers and the landowners concerning the rent level have been conceptualised as a simple two-player one-shot game. Overall conclusion is that although the SAP might induce more landowners to ask for a rent increase, it is unlikely that they will massively withdraw their land from the corporate farms. However, financially constrained farms might quickly loose their capacity to compete for land in the conditions of an increased land demand.

Suggested Citation

  • Latruffe, Laure & Davidova, Sophia & Blaas, Gejza, 2007. "The persistence of the corporate farms: they survived the transition but do they have future under the CAP," 104th Seminar, September 5-8, 2007, Budapest, Hungary 7799, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa104:7799
    DOI: 10.22004/ag.econ.7799
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