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Land Market Imperfections And Agricultural Policy Impacts In The New Eu Member States : A Partial Equilibrium Analysis

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  • Ciaian, Pavel
  • Swinnen, Johan F.M.

Abstract

This paper analyses how market imperfections affect the welfare effects of introducing the CAP in the new Eastern Member States (NEMS) of the EU. We model how transaction costs and imperfect competition in the land market affect the distribution of policy rents. We find that benefits of direct payments end up with landowners in NEMS also with imperfections in the NEMS land markets. With unequal access to subsidies small tenant farmers may even lose out from the subsidies. Decoupling of payments shifts policy rents to farmers. However, decoupling will constrain productivity enhancing restructuring which would result from accession induced improvements in the land markets. Using reserve entitlements to mitigate this effect reduces the intended benefits on distortions and target efficiency.

Suggested Citation

  • Ciaian, Pavel & Swinnen, Johan F.M., 2005. "Land Market Imperfections And Agricultural Policy Impacts In The New Eu Member States : A Partial Equilibrium Analysis," PRG Working Papers 31864, Katholieke Universiteit Leuven, LICOS - Centre for Institutions and Economic Performance.
    • Handle: RePEc:ags:kuliwp:31864
    DOI: 10.22004/ag.econ.31864
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    References listed on IDEAS

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    1. Nigel Swain, 1999. "Agricultural Restitution and Co-operative Transformation in the Czech Republic, Hungary and Slovakia," Europe-Asia Studies, Taylor & Francis Journals, vol. 51(7), pages 1199-1219.
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    3. Rizov, Marian & Swinnen, Johan F.M., 2004. "Human capital, market imperfections, and labor reallocation in transition," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 745-774, December.
    4. Hertel, Thomas W & Brockmeier, Martina & Swaminathan, Padma V, 1997. "Sectoral and Economy-Wide Analysis of Integrating Central and Eastern Europe Countries into the EU: Implications of Alternative Strategies," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 24(3-4), pages 359-386.
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    7. World Bank, 2001. "Poland - The Functioning of the Labor, Land and Financial Markets : Opportunities and Constraints for Farming Sector Restructuring," World Bank Publications - Reports 15457, The World Bank Group.
    8. Vranken, Liesbet & Swinnen, Johan F.M., 2003. "Land Markets In Transition: Theory And Evidence From Hungary," PRG Working Papers 31880, Katholieke Universiteit Leuven, LICOS - Centre for Institutions and Economic Performance.
    9. Weber, Gerald, 2000. "The CAP's Impact on Agriculture and Food Demand in Central European Countries after EU Accession: Who Will Lose and Who Will Gain?," 2000 Conference, August 13-18, 2000, Berlin, Germany 197224, International Association of Agricultural Economists.
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