Determinants of farmland prices and their local variation

The setting of farmland prices in the market not only reflects existing agricultural activities but also expected potential for development. This study decomposes farmland prices into values representative of current agricultural production and the prospective development potential at the county level in South Korea. The income value of farmland is derived by analysing agricultural revenue and production cost, and the sale value of farmland is estimated by reviewing transaction prices filed with the administrative authority. The difference between income value and sale value is adopted as the development value in this study. The results of the estimation show that the proportion of development value in the price of farmland is remarkably high, with a median proportion of 0.78, indicating that the threat of converting land to non-agricultural use is non-trivial because it remains a financially attractive alternative. In addition, the magnitude of the portion of the development value in the price of farmland varies considerably across counties depending on the distance to nearby metropolitan cities. This implies that agricultural policy should be designed in a locally optimised manner to effectively restrain the conversion of farmland for urban use.

The capitalisation of decoupled payments in farmland rents among EU regions

We study the capitalisation of subsidies in the European Union (EU) regions in the years 2006-2008, the first years after the introduction of the Common Agricultural Policy (CAP) 2003 reform that decoupled subsidies from production and attached them to land. For this purpose, we use regional aggregated data and estimate the capitalisation rate upon the entire sample and, in a second stage, splitting the sample according to the implementation regime applied by the different EU Member States (MSs), following the three options introduced by the CAP regulations (historical, regional and hybrid model). We find that between 28 and 52 cents per Euro of additional subsidy capitalise into land prices in MSs that adopted the hybrid and the regional model, respectively. We find as well that subsidies do not capitalise in farmland prices in MSs that adopted the historical model.

Can Agricultural Disaster Relief Programs Affect Farmland Prices? Empirical Evidence from Farmland Transaction Data

The literature on the capitalization of agricultural policies documents that government subsidies can increase farmland values with attesting empirical evidence found in a variety of agricultural programs. This study argues that the well-documented capitalization effect of agricultural subsidies on farmland prices may not be directly related to the agricultural disaster relief program (ADRP). On the one hand, disaster relief payments can positively capitalize into farmland prices. On the other hand, disaster shocks may result in farm income loss which can decrease farmland prices. This paper empirically examines the overall effect of the ADRP on farmland prices in Taiwan. A unique dataset on 97,864 parcels of farmland transacted in the farmland market is used. By estimating the fixed effect and instrumental variable fixed effect model, a negative overall effect of the incidence and the level of ADRP payments on farmland prices is evident. Moreover, the effect is more pronounced among farmland located in urban areas. This finding provides evidence that the negative stigmatized effect dominates the positive capitalization effect of the ADRP payments on farmland values, especially for farmland located in urban areas (JEL Q15, Q18, Q54).

Understanding Amish Migrations to New Brunswick, Prince Edward Island, and Manitoba

For nearly two centuries, the Amish of Canada inhabited only one province: Ontario. Since 2015, however, Amish families have started to migrate from Ontario to New Brunswick, Prince Edward Island, and Manitoba. This paper seeks to understand both why Amish families felt the need to move out of Ontario and why they chose those specific destinations. It argues that three factors structure Amish interprovincial migrations in Canada: farmland prices, the geography of existing Amish settlements in both Canada and the United States, and the political hospitality of provinces. Most specifically, the paper suggests that Prince Edward Island might be the most Amish-friendly jurisdiction in North America, while Quebec might be the least Amish-friendly jurisdiction of the continent.

Investors’ impact on Czech farmland prices: a microstructural analysis

This paper analyses farmland price formation under investors’ increased demand in the Czech Republic from 2008 to 2014. We adopt a stochastic metafrontier approach to hedonic price modelling and investigate the relative differences in farm and investor pricing. Our results provide evidence of buyer group-specific land valuations, asymmetric price dispersions and their temporal changes. These changes reflect the developments of market microstructures and market-supporting institutions induced by buyer competition. While initially significantly lower due to high market and bargaining power, prices paid by corporate/cooperative farms converged with high-level investor prices over time. Individual and family farms were largely unable to compete at the new price levels.

Changes in Farmland Ownership in Oregon, USA

The ownership of agricultural land has important implications for food systems, the environment, farmer livelihoods, and rural economies, communities, and landscapes. This article examines the changing ownership of agricultural lands in the United States, specifically focusing on Oregon, a state with a history of family farm ownership. I first review historical and recent trends in farmland ownership, including private enclosure, consolidation, investor purchase, development, and rising farmland prices. Next, I examine the county records for all Oregon farm properties that sold between 2010 and 2015. I provide summary statistics about the volume and pace of transactions, price per acre, and the type of owner. I also offer brief cases on top purchasers, attempting to understand their intentions with the farm properties. The findings demonstrate a rapid turnover in Oregon farmland and high prices, though that varies across the state. Agricultural corporations, investment companies, and real estate and development interests are buying large amounts of farmland. I conclude by offering reflections on the implications of the changing ownership and direction for further research.