PROBLEM OF CAPITALISATION OF SUBSIDIES IN AGRICULTURE

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PROBLEM OF CAPITALISATION OF SUBSIDIES IN AGRICULTURE

Journal Title: Zagadnienia Ekonomiki Rolnej - Year 2015, Vol 342, Issue 1

Abstract

The capitalisation of the subsidies is a process of depositing them in the rental rates, prices of farmland and values of farm’s assets. For example, the capitalisation of direct payments is the part of rent increase due to the introduction of these payments. Generally, it is evaluated as a negative impact, which may be in conflict with the improvement of competitiveness of farms. The capitalisation of support is a major source of inefficiency of direct transfers to agriculture, particularly those designed to improve the income situation of farmers. Empirical studies differ as to the level of capitalisation, its mechanisms, dynamics and conditions. To sum up the foregoing and the results of previous studies, it is clear that the capitalisation of subsidies in agriculture is a fact. Its source, nature, intensity and consequences are conditioned in many ways.

Authors and Affiliations

Justyna Góral, Jacek Kulawik

Keywords

agricultural land prices direct payments decoupled support land rent CAP reform capitalisation of subsidies Agriculture rental rates

EP ID EP188867
DOI -
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