Économie et Statistique n° 444-445 : Land and agriculture, recent developments
Increase in Proportion of Leased Farmland: A Land-Policy Success or Failure?
The main goal of farmland policy is arguably to offer incentives for productive investment, in particular by improving land fertility. In France, one of the pillars of this policy is the tenant-farming statute, which sets the legal framework defining relationships between lessor and lessee and their respective rights. The framework covers such aspects as rent regulation, minimum duration and tacit renewal of leases, right of pre-emption in the event of sale, and compensation for eviction. Yet, despite the fact that tenant farming is a major concern in farm policy-making in most developed countries, little economic research has been conducted on the topic. In France, nearly two-thirds of farmland in 2010 was cultivated by farmers who were not owners but rented it for a fixed amount from a third party. Using data on farmland sales from “Land Use and Rural Settlement Corporations” (Sociétés d'Aménagement Foncier et d'Établissement Rural: SAFERs), we offer various explanations for the uptrend in the proportion of leased farmland since the early 1980s. Our findings suggest that the phenomenon should be seen as a success rather than a failure of land policy, given that its chief goal is not so much to facilitate farmers' access to land ownership as to provide the stability they need to modernize their holdings and raise productivity. The determinants of this rise in tenant farming are demographic (longer period of economic inactivity among retired farmers), sociological (low participation rate of ex-farmers in the land market), and structural (concentration of farms and increase in incorporated farms).