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.
Highlights
The authors of the paper aimed to confirm that capitalisation of subsidies is an actual issue which has not been sufficiently analysed in scientific studies so far
It can be concluded that capitalisation of subsidies in the value of assets is a side effect of interventionism in agriculture, with a broader multichannel impact on the economy
The following may be listed as representative ones: Problem of capitalisation of subsidies in agriculture
Summary
The authors of the paper aimed to confirm that capitalisation of subsidies is an actual issue which has not been sufficiently analysed in scientific studies so far This phenomenon requires multifaceted characterisation, and evaluation of its impact on the national and the EU economy, as it is an important side effect of interventionism in agriculture. The authors reviewed the works of American and European researchers[1] and, at the end, illustrated the analysed phenomenon by an example based on the Polish market of agricultural land. At this point, it should be emphasised that so far an overwhelming number of research and analyses devoted to the issue has been done by American researchers It should be pointed out that capitalisation of support, subsidies outflow and opportunistic behaviour of the very farmers in agricultural markets, and liveliness of their investments (recently, for instance, among our fruit farmers) provoke a careful response to the arguments for retransfer of the value generated in agriculture by state intervention mechanisms (Czyżewski A. 2007; Czyżewski B. 2008)
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