Land, Labour and Capital Markets in European Agriculture: Diversity under a Common Policy. CEPS Paperback. October 2013

Well-functioning factor markets are an essential condition for the competitiveness and sustainable development of agriculture and rural areas. At the same time, the functioning of the factor markets themselves is influenced by changes in agriculture and the rural economy. Such changes can be the result of progress in technology, globalisation and European market integration, changing consumer preferences and shifts in policy. Changes in the Common Agricultural Policy (CAP) over the last decade have particularly affected the rural factor markets. This book analyses the functioning of factor markets for agriculture in the EU-27 and several candidate countries. Written by leading academics and policy analysts from various European countries, these chapters compare the different markets, their institutional framework, their impact on agricultural development and structural change, and their interaction with the CAP. As the first comparative study to cover rural factor markets in Europe, highlighting their diversity − despite the Common Agricultural Policy and an integrated single market − Land, Labour & Capital Markets in European Agriculture provides a timely and valuable source of information at a time of further CAP reform and the continuing transformation of the EU's rural areas.

Agriculture, Food and the TTIP: Possibilities and Pitfalls. CEPS Special Report No. 99/December 2014. TTIP Series No. 3 and Paper No. 1 in the CEPS-CTR project “TTIP in the balance’’

Progress in agriculture and food issues in the TTIP talks will largely be determined by the level of ambition in the negotiations as a whole. If ambitions are modest, a low-level agreement could probably be reached that includes some limited commitments on agricultural market access and food regulations. These could include promises of mutual support in the area of opening up agricultural markets through the WTO and of further Transatlantic cooperation in trying to resolve conflicts over food regulations. Bolder ambitions would allow more scope for tackling the difficult problems, though at the cost of time. It would be unfortunate if the opportunity were not taken to make some significant progress in removing some longstanding irritants in the area of agricultural policy and food regulations: this is where the economic gains are likely to be significant and the spill-overs useful. This paper argues the case that it is worthwhile making the effort to secure a constructive and imaginative agreement on agriculture and food regulations in the TTIP. A fairly detailed suggestive list of potential sub-deals in agro-food, supported by the analysis in the paper, is the most concrete one of a series of policy conclusions

Drivers of agricultural capital productivity in selected EU member states. Factor Markets Working Paper No. 30, September 2012

The aim of this Working Paper is to provide an empirical analysis of the marginal return on working capital and fixed capital in agriculture, based on data gathered by the Farm Accountancy Data Network from seven EU member states. Particular emphasis is placed on the detection of credit market imperfections. The key idea is to provide farm group-specific estimates of the shadow price of capital, and to use these to analyse the drivers of on-farm capital use in European agriculture. Based on Cobb Douglas estimates of farm-type specific production functions, we find that working capital is typically used in more than economically optimal quantities and often displays negative marginal returns across countries and farm types. This is less often the case with regard to fixed capital, but it is only in a small set of sectors where access to fixed capital appears severely constrained. These sectors include field crop and mixed farms in Denmark, dairy farms in East Germany, as well as mixed farms in Italy and the UK. The relationship between farm financial indicators and the estimated shadow prices of capital varies considerably across countries and sectors. Among the farms with a high shadow price for fixed capital in Denmark, high debt levels and little owned land tended to induce more intensive capital use, which may reflect the liberal Danish banking system. In East Germany, Italy and the UK, high debt levels made farmers more tightly capital constrained. Hence, in the latter group of countries, more traditional mechanisms of capital allocation based on debt capacity seemed to be at work. As a general conclusion, EU agriculture appears to be characterised by overcapitalisation rather than by credit constraints.

The Role of Pluriactivity in Farm Exit and Labour Supply Decisions. Factor Markets Working Document No. 67, August 2013

EDITED VERSION TO BE PUBLISHED SOON Pluriactivity has been a topic of research in agriculture for the best part of a century. It is a term which has both broad and narrow definitions and hence is subject to multiple interpretations. This paper considers two forms of pluriactivity: within the farm gate pluriactivity, also commonly referred to as farm diversification, and beyond the farm-gate pluriactivity, also known as multiple job holding. Previous studies of pluriactivity have shown that it can inhibit the natural process of structural change in the farm sector, by allowing small and unprofitable farms to survive with the support of income from outside the sector. In this paper, two empirical models of pluriactivity are estimated using farm level data for Ireland. The first examines the impact of on-farm diversification on off-farm labour supply, while the second investigates the relationship between off-farm labour supply and farm exit which is specified in the context of retirement and non-succession. The result of the first model suggests that farms that engage in within the farm gate pluriactivity are less likely to engage in beyond the farm gate pluriactivity, in other words more diversified farmers are less likely to work off farm. The second model confirms previous findings in the literature that part-time farmers have a reduced probability of having a farm successor. While the model results are specific to the Irish case, they do provide some value insights into the impacts of pluriactivity on structural change in farming.

Quantifying Non-Tariff Measures for TTIP. Paper No. 12 in the CEPS-CTR project ‘TTIP in the Balance’ and CEPS Special Report No. 116/July 2015

This paper provides an overview of methods employed to quantify non-tariff measures (NTMs) and then analyses their differences and looks at what these mean for the Transatlantic Trade and Investment Partnership (TTIP) negotiations. The authors find several similarities in the approaches taken. Because all studies conclude that NTMs matter, they argue that policy-makers are right to focus on ‘regulatory cooperation’ in TTIP. Given the significant differences in NTMs across sectors, policy-makers are urged to dive deep into sector-specific elements of NTMs and focus on those sectors where the largest potential gains can be made (i.e. where NTMs are highest, such as in agriculture, automobiles, steel, textiles and insurance services). An area identified for further research is the fact that unlike trade taxes (i.e. tariffs), regulatory barriers to trade are not generally targeted as the primary policy objective, but rather stem from other strategic policy concerns such as consumer safety and/or social and environmental protection. This element should be further investigated.