Rural land markets in transition: evidence from 6 Eastern European countries

Whether agriculture can offer a future to the residents of Eastern European transition countries and the extent to which land markets can help overcome large differences between the ownership and the operational distribution of agricultural land are two issues of considerable interest. We explore characteristics common to households who want to expand their agricultural operations and use a household model to identify additional factors that affect households’ ability to access land rental markets. Using data from Albania, Bulgaria, Hungary, Romania, and the Czech and Slovak Republics to test these predictions supports the hypothesis that land markets offer considerable potential to improve productivity but that imperfections in markets for capital goods and credit will lead to differences in the extent to which these are actually being realized. Implications for policy, in particular with respect to the scope and limitations of rental markets, are discussed.