The incidence of agricultural policy on the land market in Poland: Two-dimensional and multilevel analysis

Research has shown that the reform of the CAP which broke the link between subsidies and production (the decoupling reform) has had little effect on farmers' demand for land under the SPS (Single Payment Scheme) system. For this reason, in the conditions of the SPS, there is petrifaction of the structure of agricultural land, and an upward trend in prices on the market for agricultural land should not be expected to continue in the long term. Under the conditions of the SAPS (Single Area Payment Scheme), which applies in the EU-12 new Member States, the position in the market for agricultural land is different. However, most research carried out in Europe relates to the SPS system, where marginal changes in the value of land are identified as a result of the incidence of agricultural policy, as well as quantitative and qualitative attributes of particular properties. Under SAPS, these issues have not been sufficiently investigated. The authors have attempted to fill that gap, constructing a two-dimensional and multilevel econometric model for land prices in a leading agricultural region of Poland based on a sample of 653 transactions in the years 2010-2013. The aim is to determine how policy, as well as various quantitative and qualitative features, including location factors, affect the prices of land under SAPS. The results indicate, among other things, the key importance of the functional type of rural areas - properties in agrotouristic areas gained 43% higher prices on average than those in agricultural areas. Another finding of interest is that LFA and agro-environmental payments decapitalise the value of land.