POLITICAL RENTS IN THE NEW PARADIGM OF AGRICULTURE – DELIBERATIONS ON THE EXAMPLE OF A REPRESENTATIVE FADN FARM IN POLAND
Journal Title: Roczniki Naukowe Stowarzyszenia Ekonomistów Rolnictwa i Agrobiznesu - Year 2015, Vol 17, Issue 6
Abstract
Since the beginning of human civilization, the land has been creating certain utilities which satisfy human needs. When the dangerous side effects of industrial agriculture have occurred intrinsic land utilities are being discovered anew. They have a nature of public goods and constitute a hard core of the new agriculture paradigm. Despite irreversible accumulation of capital in the anthropogenic environment many new utilities of the land come into existence without additional capital and labour outlay. Since they are public goods, they are paid from taxes in great measure and then by the subsidies for agriculture of CAP. This way an intrinsic land utility takes a form of a financial product and can be called “intrinsic productivity” of land. According to the “induced innovation model of agricultural development” there exist mechanisms for this sector’s participation in contributing to economic development as well as in sharing its benefits. Nonetheless, inefficiencies of the market that distort market signals, constitute a barrier of the latter process. Therefore, so-called “surplus drainage” from agriculture takes place. Author claims that it is possible to objectively measure a “surplus drainage” from agriculture as a result of a market failure, i.e. information asymmetry. For that reason the drainage has to be compensated to correct this failure. The mentioned premises imply that the CAP’s subsidies should not be perceived as the political rents according to its classical definition. Only a part of subsidies left after subtracting a value of “surplus drainage” and a compensation of public goods has a hallmark of the rent. A valuation of these values is an important scientific challenge.<br/><br/>
Authors and Affiliations
Bazyli Czyżewski
Keywords
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