Agricultural subsidies and land rental prices: New evidence from meta-analysis

The capitalization of agricultural subsidies is highly relevant to sustainable agricultural development. This study applies meta-analysis to systematically investigate the overall mean effects of capitalization of agriculture subsidies in China, the EU, and the USA. We explore capitalization rates across different types and recipients, including potential sources of heterogeneity. Our primary objective is to address the debate of whether agricultural subsidies are ultimately capitalized into land rental prices. Results show that the overall mean effect of subsidies on land capitalization in the European Union (5.5%) is greater than that in the United States (2.9%), with no significant and positive effects observed in Chinese markets. Additionally, we conclude that decoupled payments may not reduce the capitalization of agricultural subsidies in the European Union and the USA. Notably, agricultural subsidies received by landowners/contractors tend to be lower than those received by tenants. Finally, the capitalization of agricultural subsidies is influenced by several potential sources of heterogeneity, including farmland scales, aggregated data, sample sizes, lagged subsidies, and the starting and ending dates of publications. These findings provide comprehensive insights into the capitalization of agricultural subsidies and offer practical policy recommendations for the effective mitigation of capitalization rates.