Vol. 2 No. 2 (2013)
Full Research Articles

Transfer of single farm payment entitlements to farm successors: impact on structural change and rental prices in Switzerland

Gabriele Mack
Agroscope Reckenholz Tänikon Research Group socioeconomics 8356 Ettenhausen Switzerland
Anke Möhring
Agroscope Reckenholz Tänikon Research Group socioeconomics 8356 Ettenhausen Switzerland
Stefan Mann
Agroscope Reckenholz Tänikon Research Group socioeconomics 8356 Ettenhausen Switzerland
Published May 17, 2013
Keywords
  • rental market,
  • agent-based modelling,
  • agricultural sector model,
  • structural change,
  • single farm payments
How to Cite
Mack, G., Möhring, A., Ferjani, A., Zimmermann, A., & Mann, S. (2013). Transfer of single farm payment entitlements to farm successors: impact on structural change and rental prices in Switzerland. Bio-Based and Applied Economics, 2(2), 113-130. https://doi.org/10.13128/BAE-10884

Abstract

This paper analyses the impact of tradable and non-tradable single farm payment (SFP) entitlements for farm successors on structural change and the lease market. Using the example of Swiss agriculture, the effects on rental-price trends and farm-exit rates are investigated. An ex-ante normative impact analysis is performed with the agent-based agricultural-sector model SWISSland, which simulates structural change processes and income trends in Swiss agriculture over a period of up to 15 years. A land market implemented at municipality level simulates the plot-by-plot leasing of land to surrounding neighbouring agents that is common in Switzerland. Allocation of plots to tenants as well as lease pricing is modelled taking into account the farm-specific land rents. The results show that personalised SFP entitlements which could not be transferred to a farm successor not only cause an intensification of structural change, but would also thus lead to a substantial reduction in rental prices. SFP entitlements which were successfully transferred to farm successors have only a slight impact on structural change and the rental prices of arable land. Only for grassland in the mountain region does a stronger shift result in a significant reduction in rental prices.

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