Eurasian Geography and Economics vol:54 issue:4 pages:423-443
This paper analyzes the impact of increasing direct payments (DPs) on land rents in six
new EU member states. In these countries agricultural subsidies largely increased as a result of EU
accession. We find that up to 25 percent of DPs are capitalized in land rents. In addition, the results
show that capitalization of DPs is higher in more credit-constrained markets, while capitalization of
DPs is lower in countries where more land is used by corporate farms, reflecting a stronger
bargaining position of corporate farms and unequal access to subsidies in these countries.