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- Title
Lost in space? The effect of direct payments on land rental prices.
- Authors
Graubner, Marten
- Abstract
Decoupled direct payments are a major tool of agricultural policy to support farm income. Since these subsidies are tied to land, the question arises as to who benefits from them when farmers are not the landowners. While theoretical models commonly predict that most of the payments transfer to land prices, empirical findings show that this incidence is low instead. Approaching the issue from the perspective of spatial competition, this paper produces results consistent with empirical evidence. Incidence varies with the competitiveness of the market, ranging from perfect subsidy transfer under specific conditions to low or zero incidence for most of the cases considered.
- Subjects
AGRICULTURAL policy; FARM income; LAND leasing &; renting; RENT subsidies; AGRICULTURAL subsidies
- Publication
European Review of Agricultural Economics, 2018, Vol 45, Issue 2, p143
- ISSN
0165-1587
- Publication type
Article
- DOI
10.1093/erae/jbx027