Agricultural Land Prices Research Articles

Testing for regime-switching behaviour in Finnish agricultural land prices

PurposeThis study analyses agricultural land price dynamics in order to better understand price development and to improve forecast accuracy. Understanding the evolution of agricultural land prices is important when considering sound investment decisions.Design/methodology/approachThis study applies threshold autoregression to model agricultural land prices. The data includes quarterly observations on Finnish agricultural land prices.FindingsThe study shows that Finnish agricultural land prices exhibit regime-switching behaviour when using past changes in prices as a threshold variable. The threshold autoregressive model not only fits the data better but also improves the accuracy of price forecasts compared to the linear autoregressive model.Originality/valueThe results show that a sharp fall in agricultural land prices temporarily changes the regular development of prices. This information significantly improves the accuracy of price predictions.

Income or Assets—What Determines the Approach to the Environment among Farmers in A Region in Poland?

The theory about the impact of farm size, income and assets on the environmental approach of farmers is ambiguous. We contribute to the existing discussion in two ways. Firstly, we look for the determinants of the environmental approach. Secondly, we treat farm size as a heterogeneous factor, affected not only by the value of assets but also flows of incomes. The main objective of the article is, therefore, to recognize the impact of assets and income on the environmental approach of agricultural producers. We analyze the results of surveys carried out in 2020 on a group of 120 farms from the Wielkopolska region (Poland), using structural equation modelling (generalized structural equation modelling (GSEM)-multiple indicators and multiple causes (MIMIC) model). Our results indicate that both the income and assets of the agricultural producers have a positive impact on their approach to the environment. However, to a greater extent, the farmer’s approach to the environment is influenced more by income than by assets. This may be influenced by the capitalization of subsidies in the price of agricultural land, which makes this element of farm assets detached from real processes. It is easier for farms with a higher income and assets to realize the orientation towards sustainability.

Agricultural Land Price Convergence: Evidence from Polish Provinces

This research deals with the problem of agricultural land market efficiency using the spatial market integration concept as well as the present value (PV) model. Empirically, it aims to test the convergence of agricultural land prices across Polish provinces. In order to check the law of one price (LOP), good-quality, medium-quality and bad-quality land sales markets are examined separately. Furthermore, this study is complemented by an analysis of the drivers behind agricultural land price convergence. The main method of testing price convergence is the log t regression. The latter was performed in two configurations, i.e., based on trend components of time series extracted using the Hodrick–Prescott filter and the Hamilton filter. Additionally, traditional β- and σ-convergence tests were applied. The obtained results indicated that agricultural land prices tend to converge in relative terms, which means that the provinces share a common long-run growth path. This finding and estimates of traditional convergence tests prove the increasing integration in the agricultural land market in Poland. There is no evidence, however, to support the conclusion that the absolute version of the long-run LOP holds. Moreover, using dynamic fixed effects models, it was identified that for good-, medium- and bad-quality land prices almost the same drivers of convergence apply. The only differences concern the strength of the influence of independent variables on prices of farmland of various types. Additionally, bad-quality land prices are the only ones which are affected by livestock density. Furthermore, estimates of the present value model finally confirmed that the agricultural land sales market in Poland cannot be considered as efficient.

Wyrównywanie się cen gruntów rolnych w krajach Unii Europejskiej

W artykule poruszono problematykę związaną z kształtowaniem się cen ziemi rolniczej w krajach Unii Europejskiej. Poddano weryfikacji hipotezę dotyczącą występowania beta-konwergencji absolutnej cen ziemi rolnej wśród 20 wybranych państw UE. Badania przeprowadzono dla lat 2006 – 2017 z wykorzystaniem modeli absolutnej konwergencji typu beta opartych na danych przestrzennych. Uzyskane wyniki badań potwierdzają występowanie tzw. efektu doganiania na rynku cen ziemi rolnej w Unii Europejskiej. Tym samym w krajach, w których początkowo stwierdzono niższy poziom cen ziemi rolnej następuje szybszy wzrost cen, niż w krajach o początkowo wyższym ich poziomie.

The Purchase of Agricultural Land a Well Thought out Process in the Agribusiness Enterprises

The changing economic environment has and will continue to have an impact on the price of agricultural land and lease. It is the possession of this main asset for production (agricultural land) that is becoming increasingly important for the processes in the Agribusiness enterprises. The purpose of the article is to explore and present possible models for assessing the need to own agricultural land and how this asset affects the processes in the Agribusiness enterprises. The results focus on the need to identify and build a proper strategy in the Agribusiness enterprises, trends and processes in the pricing of land properties. The subject of the study is the determinants leading to changes in the prices of the agricultural land and lease, and their impact on the processes in the Agribusiness enterprises. The survey covers processes related to price dynamics, both at national level and external effects, determining trends in the country.

The Relationship between Food Production, Agricultural Land, Rice Production, and Rice Price: An Empirical Study on Thailand and Viet Nam

The Relationship between Food Production, Agricultural Land, Rice Production, and Rice Price: An Empirical Study on Thailand and Viet Nam

Impact of land use on coastline change of island cities: A case of Zhoushan Island, China

Anthropogenic activities have an important effect on the natural coastlines of island cities as a result of urbanization and population agglomeration in developing countries. In order to identify the relationships between land use and coastline changes in the typical island city, this study used land use data, remote sensing technology, and geographic information system (GIS) technology to analyze the land use situation and coastline changes in the coastal zone of Zhoushan Island in China. The results show that, from 2012 to 2017, the coastal land area of Zhoushan Island increased from 121.54 km2 to 126.00 km2. New agricultural land accounted for the highest proportion of total land use growth (46.86%), followed by residential land, land for street, and transportation and industrial land. The length of the coastline increased from 137.98 km to 142.7 km. The indicators of agricultural land, industrial land, land price, and production coastline had a significant positive impact on the rate of coastline changes. Moreover, the coastline was more than just a natural coastline but also had 336 multiple functions in terms of production, daily living, leisure, and transportation. The study found that the rapid growth of tideland reclamation-based, land reclamation-based aquaculture, and the harbour/port construction-based logistics industry are the main reasons for the continuous changes in coastlines.

DIVERSIFICATION OF AGRICULTURAL LAND PRICES IN VARIOUS VOIVODSHIPS AND YEARS AND THEIR IMPACT ON THE LEVEL OF RENTS AND PRODUCTION AND FINANCIAL INDICATORS OF PLANT FARMS

The purpose of the article is to determine the diversification of agricultural land prices in three voivodships: Lubelskie, Mazowieckie and Wielkopolskie in 2010-2017 along with searching for its causes and impact on other factors determining the efficiency of production on plant farms type 15 (according to FADN specializing in the cultivation of cereals, plants oily and high-protein). The work uses FADN and GUS (Central Statistical Office) data. Relations between land prices and rentals and basic indicators of economic and financial efficiency were analyzed. Based on the research, a positive impact of low land prices on the efficiency of agricultural activity was indicated. It was also pointed out that the premises for the different methods of settling rent costs arising from the data and the large variation in the level of rents paid.

Land price diffusion across borders – the case of Germany

ABSTRACT Land market regulations are often justified by the assumption that activities of foreign and non-agricultural investors drive up prices in domestic land markets. However, empirical knowledge about the dynamics of agricultural land prices across borders is sparse. Using the German reunification as a natural experiment, we study the effect of the former inner German border on the dynamics of agricultural land prices in East and West Germany. We apply a land price diffusion model with an error correction specification to analyse spatial agricultural land markets. A novel feature of our model is its ability to distinguish price diffusion within states and across state borders. We provide evidence for a persistent border effect given that the fraction of spatially integrated counties is larger within states than across the former border. Moreover, we observe non-significant error correction terms for many counties along the former border. From a policy perspective, it is striking to realize that even 25 years after German reunification, pronounced land price differences persist. It is quite likely that price diffusion through existing borders within the EU would take even more time given language barriers, different institutional frameworks, and information asymmetries between domestic and foreign market participants.

The Theory of Agricultural Price Bubble & Price Crash in Global Economy

Agricultural prices play greater role in living Economics. Since many decades’ farmers faced declining agricultural prices and low prices in developing countries. Therefore, in these countries agricultural price policies are under closer appraisal. Government and policy makers worry about inflation. Economic precision is required in determining prices. This understanding led to conception of the study. The specific objectives are to review various agricultural price theories, research evidences and construct the theory of agricultural price bubble and crash and their effect on macro economy and suggest measures to improve. The study reviews various agricultural price theories, concepts, policies, research gaps and do meta-analysis and formulated the theory of Agricultural prices bubble and price crash. Since 1950, many development economists and practitioners prophesy in developing countries is that low agricultural commodities prices discourage poverty alleviation. Many countries are unable to make successful pricing policies due to there is not enough operative methodological and theoretical support for decision-making. According to the economic theory of cooperativism, the entities come closer to the pecking order theory. Unexpected changes and changes in regulations can have significant impact on the profitability of farming activities. “Demand channel" is the crucial factor in elucidation of commodity price growth. Future prices moments in agriculture have fat-tailed distributions and display quick and unpredicted price jumps. World Trade Organization study highlights the importance of strengthening multilateral disciplines on both import and export trade interventions to food price fluctuations to reduce beggar-thy-neighbor unilateral trade policy. The theory of NAFTA regionalism did not lead to regionalization and not increasing share of intraregional international trade. In EU countries land rents in modern agriculture causing upward trend in agricultural land prices. Information friction, agricultural supports, agricultural price & trade policies, agricultural price transmission are responsible price fluctuations. In economic theory, asymmetric price transmission has been the subject of considerable attention in agricultural gaps. Selection of forecasting models are based on chaos theory. Chaos in agricultural wholesale price data provides a good theoretical basis for selecting forecasting models. This theory can be applied to agricultural prices forecasting. Novelties in agricultural products fluctuations research offer scientific basis in planning of agricultural production.

AGRICULTURAL LAND PRIVATIZATION IN POLAND

The aim of the article is to present the process of agricultural land privatization in Poland, taking into account the role that this policy has played in terms of shaping the Polish agricultural model, based on family households. The purpose of the agrarian system shaping policy is the protection and development of family households. To this end, the said group of agricultural households is being granted privileges in terms of access to agricultural land. From an economic point of view, it translates into replacing market allocation with political decisions. The sale of agricultural land on behalf of the state was conducted by the Agricultural Property Agency (APA), which on 1 September 2017 was merged with the Agricultural Market Agency and transformed into the National Center for Agricultural Support. Between 1992 and 2017, a total of over 2.6 million ha of agricultural land (amounting to 55% of all acquired land) was sold. Natural persons acquired a total of 81% of privatized agricultural land, 19% of which was acquired by legal entities. In the years 2005-2017, the prices of agricultural land demonstrated an upward trend. The prices obtained by the Agency were very close to private market prices. The average price amounted to EUR 4,504 per 1 ha in the case of state-owned land and EUR 4,716 per 1 ha in the case of private land.

Konwergencja typu sigma cen gruntów rolnych w państwach Unii Europejskiej

W artykule poruszono problematykę zależności pomiędzy cenami ziemi rolniczej w państwach Unii Europejskiej. Celem artykułu jest próba uzyskania odpowiedzi na pytanie czy ma miejsce zmniejszanie się zróżnicowania poziomu cen gruntów rolnych w krajach Unii Europejskiej. Analizie poddano ceny gruntów rolnych w wybranych państwach UE w latach 2006 – 2016. Badaniu poddano występowanie konwergencji w trzech wymiarach: w całej Unii Europejskiej, pomiędzy państwami tzw. starej Unii oraz pomiędzy tzw. nowymi krajami UE. W wyniku przeprowadzonych analiz potwierdzono występowanie zjawiska sigma-konwergencji cen gruntów rolnych w całej UE. Stwierdzono również, że w tzw. nowych państwach UE oraz pomiędzy państwami należącymi do tzw. starych państw UE nie zachodzi zjawisko sigma-konwergencji cen gruntów rolnych.

The Spatial and Temporal Diffusion of Agricultural Land Prices

In the last decade, many parts of the world experienced severe increases in agricultural land prices. This price surge, however, did not take place evenly in space and time. To better understand the spatial and temporal behavior of land prices, we employ a price diffusion model that combines features of market integration models and spatial econometric models. An application of this model to farmland prices in Germany shows that prices on a county-level are cointegrated. Apart from convergence toward a long-run equilibrium, we find that price transmission experiences short-term adjustments caused by neighboring regions.

Price volatility of agricultural land in Poland in the context of the European Union

In this paper the price volatility of land in Poland is examined during the years 1992-2016. The analysis concentrates particularly on stationarity, variation and GARCH. Differences in land price changes in particular provinces in Poland are presented and land prices in Poland are compared with other EU countries. The land market in Poland is diverse. Purchasers can buy land from private owners in the market and from the government’s Agricultural Property Agency. Generally, land offered by the Agricultural Property Agency is cheaper, but it is also more difficult to purchase. The authors of the paper used and analyzed quarterly price data from the main Statistical Office in Warsaw in PLN. The survey found high variability for land prices in Poland. The price of agricultural land has increased significantly since the integration of Poland into the EU. In 2016 the average price of land from the (APA) Agricultural Property Agency increased by 791% and the average price of private agricultural land increased by 690.2% in comparison to 2004. The prices of land differ regionally in Poland. In 2016 compared to 2005 the price of land increased the most in Warmińsko-Mazurskie voivodeship (587,2%), Opolskie voivodeship (547,8%) and Lubuskie voivodeship (534,9%). In 2016 in comparison to 2005 the price of agricultural land increased the least in Małopolskie voivodeship (252,6%), Podlaskie voivodeship (295,0%) and Łódzkie voivodeship (304,9%). The study presents the descriptive statistics of agricultural land. The coefficient of variation of price changes in the years 2005-2016 was the highest in Slovakia (69,8%), Romania (60,4%) and Estonia (59,4%) and the lowest in Italy (9,2%) and France (12,1%). The ADF test (Augmented Dickey-Fuller test) shows that the agricultural land prices data can be classified as not stationary. The implication of the GARCH (Generalized Autoregressive Conditional Heteroskedasticity) model of price volatility of agricultural land is that conditional volatility cannot be confirmed.

Selection and significance evaluation of agricultural parcels determinants

Many different characteristics affect the land prices. This work attempts to analyse the characteristics of agricultural parcels, which significantly affect the variability of agricultural land prices. The article presents the methodology of selection land parcel characteristics, rules for the selection of factors and possibility of automatic acquisition of data in mass valuation process. The research aims at selecting determinants of agricultural land parcels price and evaluate theirs significance in a local market for the purpose of land values map elaboration. Using advanced statistical analysis of a non-linear influence of a parcel inherent characteristics on its price we proved that in the relatively small area, like commune, only a few characteristics are essential, They are: parcel size, shape and location expressed by distance to the commune centre, paved roads and homestead buildings. Therefore, these ones should be used for elaboration of land values map. Soil quality and a cropland type although significant for the land prices do not diversify land prices in local market. The novelty of the research relays on determination of non-linear influence of parcel characteristics on variation of agricultural land values based on the correlation ratio (h eta). The research was conducted for the undeveloped agricultural lands located in south-west Poland, the rural municipality Krotoszyce.

Analysis of the Agricultural Land Market Transactions in Selected Regions of Slovakia in the Years 2007–2016

Abstract Despite the fact that the agricultural land market in Slovakia has developed in recent years, the overwhelming part of agricultural land in Slovakia is utilized in the form of rent. Only a small part is managed by the landowners themselves. It is therefore necessary to create mechanisms that would make it easier for both beginners and experienced farmers to acquire land as a basic factor of production. It is also important to create conditions enabling agricultural land to continue to serve its purposes and be acquired by persons who are competent for the management of the land and will manage it in compliance with the criteria of good agricultural and environmental practice. Research and analysis of factors affecting the land market and the rental market with agricultural land will also play an important role in these directions. During the evaluated period 2007–2016, we analyzed 244,374 land plots of agricultural land in twelve districts of the Slovak Republic (hereinafter referred also as SR). In the twelve districts of Slovakia, from 2007 to 2016, the average market price agricultural land without a distinction of size categories showed a fluctuating trend. Higher values of the average market price of agricultural land were recorded in the first years of the reviewed period. The highest value of the average market price was recorded in 2008 and amounted to 2.76 €.m−2. During the monitored period, from 2007 to 2011, the average market price had always values exceeding 1 €.m−2. In the reviewed twelve districts of Slovakia during the monitored period, the sold area of agricultural land represented acreage of 100,574 ha. From this acreage, the largest share (58.41%) scored arable land followed by permanent grassland with a share of 40.92%. Orchards marked the 0.43% share of the total acreage and the smallest share (only 0.23%) of the total sales was represented by vineyards.

LAND PLOTS VALUATION IN LAND CONSOLIDATION IN SLOVAKIA: A NEED FOR A NEW APPROACH

The spatial and functional rearrangement of a territory in the process of land consolidation (LC) requires the prior valuation of the land and comparison with the proposed state. This is one of the most difficult stages of the project. The official (information) price of agricultural land is at present determined on the basis of comparing the boundaries of land areas and spatial distribution of the soil-quality ecological units (SQEU). This procedure does not reflect the real value of land and leads to disagreements particularly with large differences in price levels in the neighborhood. Therefore, the authors suggest establishing pricing information using a multicriteria evaluation, into which enters SQEU (through a single price area for the projection unit) as well as the development factor and location factor. The methodological approaches and procedures for land valuation on agricultural land in the LC are illustrated by the example of the cadastral area of Skačany (in northwestern Slovakia). The authors argue that a new approach is more objective to the owners and simplifies the entire process in compliance with the criteria of proportionality.

What does precision crop production hold for the future of soil science and plant nutrition?

The concept of precision agriculture is straightforward at the scientific level but even basic goals are blurred at the level of everyday practice in the Hungarian crop production despite the fact that several elements of the new technology have already been applied. The industrial and the service sectors offer many products and services to the farmers but crop producers do not get enough support to choose between different alternatives. Agricultural higher education must deliver this support directly to the farmers and via the released young graduates. The price of agricultural land must be higher if well-organized data underpin the production potential of the fields. Accumulated database is a form of capital. It must be owned by the farmers but in a data-driven economy its sharing will generate value for both farmers and the society as a whole.
 We present a methodological approach in which simple models were applied to predict yield by using only those yield data which spatially coincide with the soil data and the remaining yield data and the models were used to test different sampling and interpolation approaches commonly applied in precision agriculture. Three strategies for composite sample collection and three interpolation methods were compared. Multiple regression models were developed to predict yields. R2 values were used to select among the applied methods.

Designing a Meta-Synthesis Model of Affecting Drivers of Land Use Changes by Systematic Review of Previous Studies

The main goal of this study is to identify the most important factors affecting land use change based on previous literature. The method used is qualitative and a type of meta-study known as meta-synthesis. We review the purpose of each study, data collection methods and research design/questions for this task. We perform a systematic search based on keywords used in articles on land use change and transformation of land in the following databases: Scopus, Springer, and Science Direct for articles from 1976 to 2015. After reviewing 63 articles out of 286 articles, we identified 5 dimensions and 28 factors as the most important indicators of land use change in various domestic and foreign studies. The results of this study show that the most important dimensions of land use change are economic, demographic and climate. The most important drivers are urban population, average rainfall, and changes in the price of agricultural land.

Specific of agricultural land's price formation

Abstract The land issue is strategically important for any country, and countries like Georgia it is vitally important. In the work below we concentrate attention around the issue of putting agricultural land in the international free market. The problem is analyzed in condition of land price, land rent, demographic situation, agricultural subsidies and so on. As conclusion we represent opinion that, it is unacceptable to put Georgian agricultural land in international free turnover, because country can lose significant part of agricultural land and the possibility of development profitable agricultural sector.