Development of Market Prices of Agricultural Land within the Conditions of the EU
No 3/2013, September
Abstract
Market prices of agricultural land in the world have increased significantly in recent years. Important factors in regard to this trend are not only the fact that land is a basic, irreplaceable resource for the production of food and natural resources of each country, but also the fact that it is generally perceived as a favorable holder of capital, not succumbing to the effects of inflation. Market prices of agricultural land and the rent level in individual EU member countries are affected by historical development, the size structure of agricultural businesses, legislation, regulation of the land market, natural conditions and the intensity of agricultural production (e.g. the Netherlands). Market prices of agricultural land in the Czech Republic are monitored by the Czech Statistical Office (CSO), Institute for Agricultural Economics and Information (IAEI) and Ministry of Agriculture (MoA), but output of the data base is not comparable within a time series 1993-2012, as institutions work with differing methodology. On the basis of the description of prices of agricultural land and regression analysis, the hypothesis that the market price of agricultural land for agricultural use in the Czech Republic is affected primarily by its quality was not confirmed. The official (administrative) price is only an orientational and subsidiary tool for the determination of the market price. The development of the agricultural land market in the Czech Republic was affected by the privatization of land after 2000. According to an estimate (of the author), after the completion of privatization, and also in view of changes in tax policy, the prices of transacted land for agricultural use can decline within 3 years (2014) by up to 30%. It is probable that the demand will be focused on transactions with land for speculative and investment purposes, as, according to world trends, the average increase in value of investments in land in a time of economic crisis is higher (6-7% p.a.) as compared to investments in stock markets (1.8-2.2%).The article has been processed as part of VZ MSM 6046070906 “The economy of resources of Czech agriculture and their effective utilization within multifunctional agricultural-food systems”.
Keywords
Agricultural land, arable land, market price of agricultural land, official price of agricultural land, quality of land, subsidies, tenure.