Land Market and Land Rent Institutional Option for Land by xiuliliaofz

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									Land transactions in post-socialist
                         Bulgaria


          Violeta Dirimanova
            BULGARIA
          Prague, 7-11 June 2004
             IDARI Workshop
                    Problem background
• Land reform started in the beginning of 1990
• Liquidation of the old cooperatives
• Reallocation of the land to original owners or their
  inheritors
• 1.8 million landowners
• Half of farms are less then 2 ha
            Fragmentations in Bulgaria
                               Average farm’s and plot’s size


         Years                          1908    1925    1934    1944    1997


Average size of a farms        ha        6.5     5.7     4.9     4.3     1.8

Average size of a plot         ha       0.460   0.370   0.360   0.350   0.320

Number of plots              Number     14.13   15.4    13.6    12.28   5.63

 Source: adapted from Yanakieva, 2002
              Observation 1: the results of
                             restructuring
                             Type of farms and share of land

   Type of Farm              Numbers     Share of TAL   Average size

                                              %             ha
Private farms                1 777 122       52.5           1.48

State farms                       980        6.5            311

Co-operatives                   2 900        40.8          815.3

Farming companies                 122        0.7           283.5


    Source: Davidova, 2002
            Observation 2: the results of
             bargaining and contracting


•   Share cropping
•   Substance farmers (renting out/leasing out)
•   Cooperatives (leasing contract)
•   Large commercial farmers (renting contract)
      Observation 3: “Felt” Negative
                              Effect

• Land fragmentation
• Land degradation
• Land abandonment
• Low productivity
• Few formal land transactions
                The research problem


• Agricultural reform in Bulgaria has led to
  land fragmentation
• The government has been unsuccessful in
  its attempts to solve the problem
             Main research questions
• What is the relation between land fragmentation
  and my observations?

• How does land fragmentation affect actors
  behavior and what does it have to do with market
  development and low productivity?

• What is the potential role of government to deal
  with land fragmentation, and what are the
  alternatives?
                              Sub-questions
• What type of problem is land fragmentation and the
  effect on the economic system?

• What is the rational behavior when the rights are
  fragmented? How do people exchange their rights?

• How can costs of exchanging ownership and user
  rights be minimized in Bulgaria?
                Purpose of the study


To propose institutional options for solving
land fragmentation caused problems on the
basis of analyses of land transactions, the
actors‟ behavior and institutional settings
                           Theoretical model
                    INSTITUTIONAL SETTINGS


                     CHARACTERISTICS OF
                          ACTORS

PROPERTY RIGHTS                            GOVERNANCE STRUCTURE
    FORMAL                                     MARKET
    INFORMAL                                   HIERARCHY
                                                COOPERATION

                      LAND TRANSACTIONS


                  RELATIONAL CONTRACTING
                      BETWEEN ACTORS


                        CONTRACT
             Theoretical background

• Transaction Cost Theory (Coase,
  Williamson)

• Theory of Property Rights (Barzel)

• Theory of Agricultural Contracting (Hayami
  and Otsuka)
Proposition and research hypothesis
Main proposition: Agricultural reform has led to land
 fragmentation and the current land transactions further
 deepened the problem.
Sub-proposition 1: Land fragmentation has an impact on
  what is rational in contacting.
Sub-proposition 2: Land fragmentation has an impact on
  restructuring process on farming structure.
Sub-proposition 3: Land fragmentation has „negative‟
  effects.
                               Methodology (1)
• Legislation and literature
• Developing empirical study
   –   set of „comparative‟ single studies
   –   semi - structural interviews
   –   two stages – pilot and main interview
   –   social network method – frequencies of land
       transactions
• Combination between qualitative and quantitative
  method
                      Methodology (2)
• Use empirical data and structure land
  transactions as “bargaining games” between
  owners and users (Hanisch 2003)
• Analyze what is rational behavior in
  different bargaining situations (Hanisch
  2003)
• Analyze policy options in their impact on
  alternative „solutions‟ of these games
Thank you very much for your attention!

								
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