Économie et Statistique n° 444-445 - 2011Land and agriculture, recent developments
Urban Influence on Farmland Prices and its Impact on Agriculture
The many land-related issues in peri-urban areas include conversion of farmland, forests, and natural land to urban use, capital gains generated by urbanization, and conservation of land resources for non-market purposes or for future generations. These issues are settled in the land market, where economic agents compete for land use. The highest bidder acquires the right to choose the type of use in compliance with existing regulations. We seek to shed light on the farmland market's response to the current peri-urbanization trend in France. For this purpose, we study the volumes and intended uses of plots traded, as well as price formation, using econometric models on individual data prepared from notifications of sales filed with “Land Use and Rural Settlement Corporations” (Sociétés d'Aménagement Foncier et d'Établissement Rural: SAFERs). In the most agriculturally oriented market segment (land intended for farm use, purchase by a farmer, no buildings), land prices are influenced by the urban system. The price decreases as one moves away from large cities and urban clusters, and it varies in step with population size and growth. However, these effects do not play an identical role in the three regions selected for our study: the Côte-d'Or and Nord départements and the Toulouse region. The “monocentrism” of Toulouse and Dijon stands in contrast to the “polycentric” pattern in the Nord.