Key Issues and Developments in Farmland Sales Markets in the EU Member States and Candidate Countries. Factor Markets Working Paper No. 12, February 2012

This paper describes recent developments in sales markets of agricultural land in selected member states of the European Union and its candidate countries. Analysis focuses on the importance of the sales market for agricultural land, the average size of transacted plots, and the evolution and magnitude of the land sales prices. The share of agricultural land sold on the market is relatively stable in most of the old member states, with the exception of Finland, the Netherlands and the UK, where a more dynamic market is observed. For the new member states, the sales market for agricultural land is strongly affected by public sales under the ongoing land privatisation programmes, while strong variation prevails in the private sales market. Substantial differences are also observed in both the average size of the transacted plots and the sales prices. For the latter, price regulations partially explain the heterogeneity in the evolution of sales prices.

Key Issues and Developments in Farmland Rental Markets in EU Member States and Candidate Countries. Factor Markets Working Paper No. 13, February 2012

In this paper, we describe recent developments in the rental market for agricultural land in selected EU member states and candidate countries. The analysis focuses on the importance of the rental market as well as on the evolution of rental prices. It appears that the share of rented land in the total utilised agricultural area varies considerably among member states. In the old member states, the share of rented land ranges between 18% in Ireland and 74% in France, while in the new member states (NMS) it ranges from 17% in Romania to 89% in Slovakia. For the former, different strategies to provide tenure security to tenants can explain differences in the importance of rental markets. Changes in the significance of land rental have also reflected changes in institutions and in economic and political conditions. In the NMS, diverse approaches to land reform have resulted in assorted ownership structures and hence in differences in the share of rented land. Regarding rental prices, governments impose price restrictions on agricultural land rents in some countries, such that large divergences are observed in rental prices between and within member states.

The Reallocation of Agricultural Labour across Sectors: An Empirical Strategy for Micro Data. Factor Markets Working Document No. 45, May 2013

This paper presents an empirical methodology for studying the reallocation of agricultural labour across sectors from micro data. Whereas different approaches have been employed in the literature to better understand the mobility of labour, looking at the determinants to exit farm employment and enter off-farm activities, the initial decision of individuals to work in agriculture, as opposed to other sectors, has often been neglected. The proposed methodology controls for the selectivity bias, which may arise in the presence of a non-random sample of the population, in this context those in agricultural employment, which would lead to biased and inconsistent estimates. A 3-step multivariate probit with two selection and one outcome equations constitutes the selected empirical approach to explore the determinants of farm labour to exit agriculture and switch occupational sector. The model can be used to take into account the different market and production structures across European member states on the allocation of agricultural labour and its adjustments.

Influence of Agricultural Support on Sale Prices of French Farmland: A comparison of different subsidies, accounting for the role of environmental and land regulations. Factor Markets Working Document No. 51, June 2013

This paper investigates the determinants of agricultural land price in several regions in France over the period 1994-2011, using individual plot transaction data, with a particular emphasis on agricultural subsidies and nitrate zoning regulations. It found a positive but relatively small capitalisation effect of the total subsidies per hectare. The data revealed that agricultural subsidies capitalised, at least to some extent, but the magnitude of such a capitalisation depends on the region considered, on the type of subsidy considered, and on the location of the plot in a nitrate surplus zone or not. Only land set-aside premiums significantly capitalise into land price, while single farm payments have a significant positive capitalisation impact only for plots located in a nitrate-surplus zone.

The Empirical Content of the Present Value Model: A survey of the instrumental uses of farmland prices. Factor Markets Working Document No. 53, June 2013

After reviewing the Present Value Model (PVM), in its basic form and with its major extensions, the authors carried out a literature review on the instrumental uses of farm land prices; namely what land prices may reveal in the framework of the PVM. Urban influence, non-market goods and climate change are topics where the PVM used with applied data may reveal farmers’ or landowners’ beliefs or subjective values, which are discussed in this paper. There is also extensive discussion of the topic of public regulations, and how they may affect land price directly, or through its present value.

The Impact of the SFP System on Italian Farmland Prices and Tenure Contracts. Factor Markets Working Document No. 65, August 2013

EDITED VERSION TO BE PUBLISHED SOON. The aim of this paper is to contribute to the estimation of the potential effects of the CAP reform on propensity to transaction, particularly comparing the effect of different new instruments/policy settings with the current policy (CAP health check) used as a baseline. The work is focused on three of new policy instruments within the post 2013 CAP reform proposal: regionalization, greening and capping. The first and second are analysed in more detail. The analysis will be based on a survey of farmers in the Province of Bologna, Emilia Romagna, Italy. The questionnaire focuses on mechanism of access to land and related incentives towards different land use/economic behaviour. The survey includes information about respondent characteristics (farm, farmer, household and payments received) and stated intention about potential changes in land operated under alternative agricultural policy scenarios (particularly the post-2013 reform proposals).

Europe's growth problem (and what to do about it). Bruegel Policy Brief 2013/03, April 2013

The issue: The European Union's pre-crisis growth performance was disappointing enough, but the performance has been even more dismal since the onset of the crisis. Weak growth is undermining private and public deleveraging,and is fuelling continued banking fragility. Persistently high unemployment is eroding skills, discouraging labour market participation and undermining the EU’s long-term growth potential. Low overall growth is making it much tougher for the hard-hit economies in southern Europe to recover competitiveness and regain control of their public finances. Stagnation would reduce the attractiveness of Europe for investment. Under these conditions, Europe's social models are bound to prove unsustainable. Policy Challenge: The European Union's weak long-term growth potential and unsatisfactory recovery from the crisis represent a major policy challenge. Over and above the structural reform agenda, which vitally important, bold policy action is needed. The priority is to get bank credit going. Banking problems need to be assessed properly and bank resolution and recapitalisation should be pursued. Second, fostering the reallocation of factors to the most productive firms and the sectors that contribute to aggregate rebalancing is vital. Addressing intra-euro area competitiveness divergence is essential to support growth in southern Europe. Third, the speed of fiscal adjustment needs to be appropriate and EU funds should be front loaded to countries in deep recession, while the European Investment Bank should increase investment.