Project Details
Projekt
Is regulation of agricultural land markets warranted? - A microstructural investigation
Subject Area
Agricultural Economics, Agricultural Policy, Agricultural Sociology
Term
since 2017
Project identifier
Deutsche Forschungsgemeinschaft (DFG) - Project number 317374551
Recently proposed stricter regulation of farmland markets has been justified by the perceived risk of farmers being “priced out of the market”. This risk is suspected to have increased because of new demand for land from non-agricultural forces. In Phase I, we analysed such justifications by estimating the price-impacts of investors, urbanisation and of existing regulation itself.In Phase II we plan to maintain our overall objective to investigate the impacts of and the justifications for land market regulation but broaden our perspective in three ways by considering other market outcomes than prices, other potential drivers of farmland prices and adding a new study region. This broadening is important because keeping prices within the reach of local farmers is merely a means to farmland regulation’s ultimate aim: maintaining a healthy and sustainable local farming structure. Moreover, recent changes on farmland markets may be driven by other societal concerns and policies than land market efficiency, such as sustainability goals. We therefore want to study in Phase II which impact renewable energy policies and urbanization have on farmland prices but also on other outcomes such as crop diversity. The impacts of policies like subsidies for growing renewable energy crops on farmland markets may be indirect, by altering the costs and incentives of famers and thus their local market power. We thus do not only aim at estimating direct, reduced-form effects but also at uncovering indirect affects via modelling the market-microstructure. We therefore also expand our econometric methodology to Structural Equation Models. Identifying such effects needs rich data from areas with spatial and temporal variation in policies and drivers. We thus plan to add North Rhine-Westphalia to our existing study region of Berlin-Brandenburg. Both regions are exposed to some of the same non-agricultural drivers of land markets, but obey different farming structures and farmland price levels, creating an interesting contrast.
DFG Programme
Research Units
