Abstract
Agricultural land is a limited natural resource with increasing economic value. This study analyses land rental relationships in Slovakia, including legal rental regulations, and identifies the impact of certain factors, such as the European Union Common Agricultural Policy (CAP) payments, and geographical and economic factors on land rental prices. From the results of econometric models, it was found that certain CAP payments have an effect on rental prices, mainly the single area payment scheme (SAPS), payments for agri-environmental-climate schemes (AECS), and animal welfare, which were found to have positive effects. Other important factors found to influence rental prices are economic indicators (such as total revenue share of total costs, share of revenue from agricultural production in terms of total revenue, share of production costs as a percentage of total costs, wages, and number of employees) and geographical factors (such as region or partial production areas). However, the distance of the farm from the district city (LAU 1) and the share of farmland affected by natural constraints do not considerably affect rental prices in Slovakia. Land consolidation is a statistically significant factor according to the models; however, its impact is almost zero. Knowledge of these factors constitutes important know-how, not only for policy makers but also for the actors operating in the land rental market (e.g., landlords, tenants, experts on land valuation, and real estate agents).
Highlights
Agricultural land is a limited natural resource and, as a result of its decline, is becoming an increasingly valuable economic asset
Many studies confirm that the agricultural policy has a positive impact on the growth of land prices as well as land rental prices [18,19,20,21,22,23]
The agricultural land market is a focus of interest for many domestic and foreign researchers, as agricultural land is a limited natural resource with an increasing value
Summary
Agricultural land is a limited natural resource and, as a result of its decline, is becoming an increasingly valuable economic asset. It follows that the agricultural land market is still a focus of many researchers [1,2,3,4,5,6,7], as well as national and supranational (EU) politicians, (e.g., [8] or the law-making process on land consolidation, including rental relationships in Slovakia). Most of the papers are related to the impact of policy interventions on the agricultural land market.
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