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Économie institutionnelle du marché foncier dans deux anciens pays communistes: la République tchèque et la Pologne

Le présent article présente une évaluation du marché foncier en République tchèque et en Pologne après la chute du communisme. L'efficacité du marché foncier est indispensable au bon fonctionnement du secteur agricole. Dans le cas contraire, le marché est grevé par l'inefficacité de certaines unités. Il ressort des analyses que l'état antérieur du secteur agricole détermine très nettement la situation foncière dans ces deux pays. La République tchèque, où le marché foncier est particulièrement rigide, est caractérisée par: des exploitations de grande taille; l'absence d'exploitations agricoles privées pendant la période communiste; des coûts de transaction élevés; et, enfin, une demande et des prix faibles pour les terres après la chute du communisme. En Pologne, où il existait des exploitations agricoles privées pendant la période communiste, le fonctionnement du marché foncier est plus adéquat, et le comportement des agents privés est plus favorable que celui auquel on peut s'attendre dans une économie de marché.

L'article est articulé comme suit: une première section d'introduction, une deuxième et troisième sections traitant du marché foncier dans ces deux pays, et une dernière section présentant des évaluations d'ordre général.

La economía institucional del mercado de tierras en dos antiguos países comunistas: la República Checa y Polonia

En presente artículo se evalúa el mercado de tierras en la República Checa y en Polonia en el período que siguió a la caída del comunismo. Un funcionamiento eficaz del mercado de tierras es importante para que el sector agrícola funcione de forma apropiada. De otro modo, en el mercado existirán unidades ineficaces. De los análisis se deduce claramente que las condiciones iniciales del sector agrícola determinan en gran parte la situación del mercado de tierras en los dos países. En la República Checa, donde durante el comunismo había explotaciones agrícolas enormes pero no privadas, el rígido mercado de tierras posterior al comunismo se caracterizó por costos de transacción elevados, y una demanda y precios de la tierra bajos. En lo que respecta a Polonia, donde ya existían explotaciones agrícolas privadas durante el comunismo, el mercado de tierras funciona de manera más satisfactoria, y el comportamiento de los agentes privados es más favorable a lo que cabría esperar en una economía de mercado. El artículo se presenta del modo siguiente: en la primera sección se ofrece una introducción al problema; las secciones segunda y tercera se ocupan por separado del mercado de tierras en los dos países, y la última sección incluye una evaluación común.

The institutional economics of land market in two former communist countries: the Czech Republic and Poland*

P. Ciaian

Pavel Ciaian can be contacted at the Policy Research Group, Catholic University Leuven,
de Croylaan 42, B-3001 LEUVEN, Belgium

This paper assesses the land market in the Czech Republic and Poland in the period after the fall of communism. The efficient functionality of the land market is relevant for a properly functioning agriculture sector. Otherwise, inefficient units will exist in the market. From the analyses it is evident that, in each country, the condition of the agriculture sector under communism largely determined the subsequent land market situation. In the Czech Republic, which had large cooperative farms and no private farms during the communist era and experienced high transaction costs with low demand and low land prices afterwards, the land market is very rigid. In Poland, however, which had already experienced private farms under communism, the land market works more efficiently and the behaviour of private agents is more in line with what one would expect in a market economy.

The article is set out as follows: the first section provides an introduction to the problem; the second and third sections deal separately with the land market in each of the two countries; and the final section presents a common evaluation.


During the communist period agricultural land in the Czech Republic and Poland was subject to State control, and property rights were not respected. The private sector did not have the power to make decisions regarding the use, acquisition and disposition of property. Even in Poland, where private farming remained predominant under communism, the Polish communist regime never permitted the land market to operate freely and used a variety of measures to exercise tight control over individual farmers. In the case of cooperative farms also, where the land ownership was usually known, the owners had virtually no authority over the use of the land.

During this period Czech agriculture was dominated by large cooperative farms averaging more than 2 000 ha of agricultural land per farm. In contrast, Poland was characterized by small private farms, which averaged 6 ha of agricultural land per farm (Mathijs, 1997).

The fall of communism and the resulting privatization and transition of the Czech and Polish economies to market-oriented economies and the abolition of property right restrictions brought the expectation that large inefficient farms would collapse and emerge as smaller family farms similar to those seen in Western Europe. There was also an expectation that a large number of small private farms in Poland would accumulate more land and become larger, or that farms would converge to an optimal size. Also, according to the Coase Theorem, when all rights are freely transferable and transaction costs are zero, then initial portioning of property rights does not matter and through voluntary transactions on the part of individual owners the rights will cluster in such way that the total value of resources will be maximized (Coase, 1960). A prerequisite for this to happen, however, is the existence of a land market, in which farmers who wish to enlarge their holdings can freely buy or rent land and, vice versa, the owners of land or of a large farm with extra land can freely sell or rent out their land.

A functioning land market can be said to exist when land is transferred from less efficient individuals to more efficient ones. The final farm structure will then be composed of only the best-performing units with the optimal holding size. Where this does not occur, the constraints faced by the sector lead to inefficiencies.

The objective of this article is to explore the land markets in the Czech Republic and Poland, identifying factors that have contributed to the post-communism situation. Each country is discussed separately, followed by a summary of the land market situation in both countries.


In order to have a functioning agricultural land market there is a need for somebody to demand land as well as for somebody to supply it. The interaction between both sides will then determine the price of the land or the rent. This section examines both sides of the agricultural land market, that is demand side and supply side, respectively, taking into account aspects such as the potential participants, incentives for agricultural agents to participate, and factors influencing the land market. The interaction between supply and demand is then assessed.

Supply side

Prior to 1989, around 61 percent of Czech agricultural land was organized under cooperatives, 25 percent under State farms, 13 percent under other forms of production organization and only 0.4 percent of land was in private usage (Table 1). All land rights with the exception of ownership rights in cooperative farms were controlled by the State and individuals did not have the power to make decisions concerning the usage, transfer or other rights related to land. After the fall of communism in 1989 and the transformation of the Czech economy to a market-oriented economy, agricultural land was privatized and all property and the majority of ownership rights were transferred to private agents.

Evaluation of the structure of agricultural enterprises in the Czech Republic

Form and size of enterprise





Share of TAA1

Average area

Share of TAA1

Average area

Share of TAA1

Average area

Share of TAA1

Average area

Individual farms











2 561


2 191


1 430


1 394

Other business entities









State farms


6 261


3 558





Other enterprises









1 TAA = total agricultural area.
Source: OECD (1995a) and Zelena zprava (2000).

The privatization process is nearing completion, with around 96.3 percent of all claims settled as of 1999. As a result of this process, the owners to whom the land was resituated during privatization represent the supply side of the land market. Consequently, the supply side is high since, contrary to expectations, the majority of new owners, after receiving their property rights, were not interested in starting farming. Most of them have leased their land back to cooperatives or to other agents. This fact has served to boost land supply. According to VÚZE (1998: 1), individual farmers leased around 60 to 80 percent of the land and cooperatives and other business entities have leased almost 100 percent of the land. In general, the land leasing contracts are short-to-medium term (1-4 years) and the rent is negotiated on a case-by-case basis. This behaviour on the part of the owners can be explained by the following factors:

With regard to size, the cooperatives are considered too large and unsustainable in a competitive environment, especially when the Czech Republic joins the European Union (EU) (see Sarris, Doucha and Mathijs, 1999). It is therefore expected that these large farms will split into smaller units, sell their surplus land or, as the majority of land in their usage is leased, rent less land. Overall, these developments will result in negligible change or an increase in the supply of land over the period of convergence resulting in an optimal farm size. Table 1 shows that the average size of cooperatives has already been reduced from 2 561 ha in 1989 to 1 394 ha in 1999.

Consequently, the analyses of the supply of agricultural land lead to the observation that there is relatively high supply of land for renting or selling in the Czech Republic.

Demand side

The agents who are interested in doing business in agriculture represent the demand side of the land market. The relevant incentive factor for attracting businesses in this sector is profitability; otherwise there is no gain. As indicated in Table 2, the agriculture sector has been unprofitable, which has contributed significantly to low demand for agricultural land.

The cooperatives, represented by their managers and workers, are one of the groups of agents who are the land demanders. In general, they demonstrate a conservative and reluctant attitude to further restructuring and to a large extent still operate as they did during the pre-transition days. One of their objectives during the transition period has been to keep their positions. This stance has sometimes been in conflict with the owners' interests, especially when the owner had intended to withdraw the land from the cooperative. These conflicts of interest have made negotiations regarding land withdrawals more difficult, often leading to an inefficient outcome. In many cases not only has withdrawal not taken place, the negative experience has served as a disincentive to other owners considering withdrawing their land from a cooperative. Consequently, more land has remained in the control of inefficient organizations than might otherwise have been the case and the situation as a whole has contributed to land market rigidity. Overall, the cooperatives will add little to the demand side of the land market; rather, it is expected that they will reduce it, as their size is considered to be too large and therefore unsustainable.

Financial results of the agriculture sector over the period 1993-98 (billion CK1)








Cumulative 1993-98

Profit (+), Loss (-)








1 CK = koruna.
Source: VÚZE (1998).

The second group of agents who enter the demand side are other businesses entities. These comprise the joint stock and limited liability companies that have been created from the former State farms or emerged from the former cooperatives. Their effect on the land market is similar to that of cooperatives.

The most desirable agents, in terms of dominating the agriculture sector, are private individual farms rather than transformed cooperatives or other business entities. Their share of total agricultural land grew from 0.4 percent in 1989 to around 23 percent in 1994 and remained at this level in 1999 (Table 1). This share is still small compared with those of the cooperatives and other business entities, which still dominate the sector with a combined share of around 75 percent of total agricultural land. The main reasons for the low interest of individuals in starting farming and hence the low demand for land are the following:

Summing up the demand-side analyses, it can be observed that there is relatively low demand for agricultural land in the Czech Republic.

Interaction between supply and demand

The above analyses indicate that the land supply highly exceeds the demand for land. Table 3 shows the land bought and sold over the period 1993-99. On average, only around 0.21 percent of total agricultural land is bought and sold each year, which is a small volume compared to around 1.0 percent in EU countries (VÚZE, 1998: 1; Zelena zprava, 2000: 80). Although these figures may give some indication of the land market's functionality, they can be considered as irrelevant as indicators of the existence of an agricultural land market. In the majority of cases agricultural land attracts buyers only when there is a possibility of capital gain by converting its use to non-agricultural purposes (e.g. construction) or when there is a possibility of using it for a small family garden. The value of these transactions, therefore, can hardly be used as a reference for agricultural land market prices. The only land prices available are administratively fixed and are also used for land taxation. They are calculated by taking into consideration land quality, fertility and topography and range from 5 000 kovuny (CK) (145 euro) to CK 135 500 (3 928 euro) per hectare.

With regard to rents, the low demand for agricultural land gives current land users relatively strong powers of negotiation. In the knowledge that the owners would experience difficulty finding a new user and that it would be almost impossible to find a buyer, they therefore offer very low rents. In some situations the rent for low-fertility land only just covers the land tax. In regions where the farms are large (mainly cooperatives), some farmers exploit even further their monopoly position as a single demander for land and therefore the rent they pay is very low or uncertain. Rents in the Czech Republic range from 0.07 percent to 1.8 percent and exceptionally 4 percent of the administrative land price (68-1 330 CK [2-37 euro] per hectare). Act no. 229/1991 determines the minimum level of rent at 1 percent of the sale price of land if the contracting parties do not agree otherwise.

In a world with rational agents, perfect information and zero transaction costs, as neoclassical theory assumes, the land market functions perfectly. This means that the land is transferred from a less efficient farmer to a more efficient one. The transfer is executed without "friction" in a very short time, since everybody knows everything and there are no administrative procedures or other requirements involved in transferring the land. The final market structure eventually consists of only efficient farms. This is because more productive farms can always make a profit by offering a higher price than less productive farms would be able to earn. Therefore all parties will voluntary agree to make the transaction and the less efficient farms immediately disappear from the market. In this way, even when there is a high supply of and low demand for land, as in the Czech Republic, we still should see the same effect. The land price would stabilize at a low level and the gain from the transfer will still exist. Similarly, all inefficient farms (cooperatives) would leave the market. Consequently, a good indicator of land market functionality is the extent to which the real situation differs from the situation when the market works perfectly. If too many inefficient farms continue to operate, then many imperfections in the market can be expected.

Agricultural land bought and sold, 1993-98

Land market








Cumulative 1993-98

Share of TAA1









1 TAA = total agricultural area.
Source: VÚZE, 1998; Zelena zprava, 2000.

It seems that these are the sorts of problem faced by the Czech Republic since inefficient farms, such as cooperatives and other business entities, operate on around 75 percent of the agricultural land. The issue of transaction costs is relevant in explaining this fact. No information system for land prices exists and the potential buyer or seller of land does not have a reference for agricultural land prices, or there may be uncertainty that the rent is going to be paid, as has already been mentioned above. Therefore an owner has to be prepared to spend time and money searching for a suitable party with whom to deal, gathering the necessary information on land prices, all the legal procedures needed to complete a contract and then enforcing the subsequent user of land to pay the rent. Moreover, specifically in transition countries, owners face additional expenses when they wish to withdraw land from the cooperatives: these relate to the cost of all the legal procedures and also the costs incurred during negotiations with the managers of the cooperatives, who in some situations oppose withdrawals.

The combination of high transaction costs on the one hand and the low probability of finding a buyer or tenant, uncertain and low rents, the non-existence of agricultural land prices and the low profitability of the agriculture sector on the other hand make land transactions unprofitable and lead to land market failure. Arrow (1969: 48) pointed this out very clearly: "Market failure is not absolute. It is better to consider a broader category, that of transaction costs, which in general impede and in particular cases completely block the formation of markets." The consequence of this situation is that owners are not interested transferring land from inefficient farms to more efficient ones, since the rent or sale price would not cover the costs incurred (transaction costs). Therefore the land remains under the usage of inefficient production units such as cooperatives.


The Polish agriculture sector differs significantly from that of the Czech Republic in terms of the share of private farms and average farm size. Already during the communist period the sector was dominated by private farmers, with around 76 percent of total agricultural land being under private usage. This share increased to 84 percent in 1999 (Table 4). The private farms are small, averaging 6.3 hectares per holding in 1990 increasing slightly to 7 hectares in 1998.

Evaluation of the structure of agricultural enterprises in Poland


Private farms

State farms



Shareof TAA1 (%)




Average area (ha)


2 924


Number of farms

2 138 000

1 112

2 240


Share of TAA1 (%)




Average area (ha)


1 786.0


Number of farms

2 144 000

1 752

2 186


Share of TAA1 (%)




Average area (ha)




Number of farms

2 041 380

1 953

2 467


Share of TAA1 (%)




Average area (ha)




Number of farms




1 TAA = total agricultural area.
Source: OECD, 1995b, PSI, 2000, PMAD, 2001.

An agricultural land market that is functioning efficiently is expected to facilitate the transaction of land from less efficient farmers to more efficient ones. Consequently, in the Polish case it is both desirable and expected that private farms will grow in size if the market is working, since the huge numbers of small farms are considered highly inefficient. First, however, the following question might be asked: Why did farm size not increase to an optimal size during the communist period, when private farming was predominant and the market should have been working properly? This can be explained by the fact that property rights were significantly restricted and farmers could not appropriate all the benefits arising from land ownership. The policy towards private farmers was discriminatory1 and they faced an uncertain future with the risk of collectivization. This situation significantly diminished the incentive for farmers to build up a prosperous farm. Moreover, the lack of a competitive market meant that farmers were not subject to pressure to achieve higher efficiency, for instance by growing in size and benefiting from economies of scale. The Polish agriculture market was closed to outside competitors and there were shortages of agricultural products, which made it easy for farmers to sell their products with little effort. The shortages of agricultural products had a further impact on the land market: they stimulated families to own land and to produce for their own consumption in order to avoid being dependent on the uncertain procurement of food products on the market. In this way, land transfers of a smaller size for this purpose were stimulated. In summary, the institutional endowment of the communist period served to make the land market rigid and inefficient, which has stimulated the fragmentation of land rather than its concentration into larger and more efficient units.

After 1989, when the Polish economy was transformed into a market economy, almost all property right restrictions were abolished, and owners could make decisions regarding the use, acquisition and disposition of property.

Supply side

For reasons of efficiency, the land owned or rented by less efficient farmers is one key source of the land market supply in an economy in transition. Obviously, this is dependent on the performance of the economy as a whole, because farmers who withdraw from the agriculture sector have to be integrated into other sectors of the economy. In Poland, the opposite situation has developed. During the transition period the unemployment rate increased sharply and has stayed at a relatively high level (13 percent in 1999) leading to the situation whereby agriculture is the sector that has absorbed the spare labour force. As a result, the sector is overcrowded, with around 4.3 million people working in agriculture, accounting for almost 27.4 percent of total employment.

In October 1991, the Agricultural Property Agency of the State Treasury (APAST) was established, which has responsibility for privatizing the State farms, mainly through sale or leasing. In total, the Agency took over a total of 3.5 million ha, which represents the potential for the supply side of the land market. Up to the end of 1999, the Agency had sold around 854 400 ha of land. More frequently, the Agency used leasing agreements. These agreements were usually long term and in most cases with the possibility of extension. The average plot size of the leased land and sold land in 1999 was 10.7 ha and 7.6 ha, respectively.

A further source of the land supply is motivated by other factors, not necessarily related to efficiency. Land may become available because the preferences of farmers have changed or unexpected circumstances have occurred. For instance, a farmer may decide he is no longer interested in farming and would prefer to move out of agriculture. He will therefore sell or rent out his land. Alternatively, some unexpected situation may arise in a landowner's family that may force him to sells some or all of his plots.

Demand side

The demand side of the land market consists of private individuals who buy or rent land with an expectation of gaining from it. However, low profitability and expensive credits make it difficult for interested buyers to find the necessary financial resources for land acquisition or payment of rent. For this reason smaller plots are usually preferred. In terms of credits, according to the Institute of Agricultural and Food Economics (IAFE) (2000: 2), rent contracts with APAST were cancelled for around 297 000 ha in 1999 - representing an increase with regard to the previous year. The main reason for the cancellations was considered to be the difficulties farmers were experiencing in paying their debts. In theory, the primary and most desirable group that is supposed to demand land comprises the best-performing farms interested in enlarging their holdings, followed by new entrants. Another relatively important group of buyers comprises individuals seeking to use the land to produce food for their own consumption. According to the Polish Ministry of Agriculture and Rural Development (PMAD) (2000: 14-15) 12.7 percent of private owners produce only for their own consumption and 37.4 percent produce mainly for their own consumption and only occasionally sell any surplus. They are induced by the facts that per capita income is still relatively low in Poland and the share of food expenditure as a proportion of total expenditure is high- 28 percent2 compared with the EU level of 14 percent over the period 1992-94.

The relatively low level of education in rural areas also contributes to demand for land.3 Farmers with little education have highly specific human capital and would not be expected to withdraw from agriculture because the value of their labour is low in the general labour market and especially so in the market for skilled labour. It is therefore expected that they will buy or rent additional land.

Interaction between supply and demand

The amount of land subject to market turnover is relatively high. It increased from 515 400 ha in 1991 to a peak of 1 186 300 ha in 1995 before returning to lower levels of 780 000 ha in 1999 (Figure 1). This pattern was mainly affected by the creation of APAST, which led to a 350 percent increase in newly leased land in 1994 and an increase in land sold - with the highest increase (around 130 percent) in 1997. The average plot size of sold or leased land per transaction is higher for APAST transactions (7.6 ha and 10.7 ha respectively) than for transactions between farmers (3 ha and 4.7 ha respectively).

Land transacted between 1991 and 1999 ('000 ha)

Type of transaction










1  Bought/sold land











Transaction between farmers




















2  Newly leased land











Transaction between farmers




















3  Non-market transactions of land










Total market transactions (1+2)





1 186.3

1 146.7




Total transactions (1+2+3)

1 142.4

1 069.9

1 004.2

1 353.1

1 554.4

1 533.7

1 294.3

1 180.3

1 130

1 APAST =Agricultural Property Agency of the State Treasury.
Source: IAFE (2000).

A significant proportion (ranging from 24 percent to 55 percent during the period 1991-99) of total land transactions were non-market (e.g. transfers due to inheritance). These transactions are not economically motivated but can have a substantial effect on the land market; for instance, the inheritance custom of dividing land among all sons significantly contributes to ownership fragmentation.

The price of land has increased sharply, from 790 zlotys (Zl) in 1991 to 4 390 Zl in 1999. However, when these prices are adjusted to take inflation into account they have been relatively stable. The only major change was observed in 1994 and 1995 when land prices decreased substantially in comparison with the previous years, by 10 percent and 7 percent, respectively. This occurrence, however, coincided with the increase in newly leased land by APAST.

Total land market turnover as a proportion of total agricultural land over the period 1991-99 stood at 4.47 percent. That this is significantly higher than EU level of around 1 percent can be explained by the fact that the Polish agriculture sector is in transition. Moreover, if the land market works properly, we should see that farms will grow in size to become more efficient and larger units. If the land market does not work properly, farmers will face constraints contributing to land market rigidity, which will not allow them to expand. Table 4 shows that the average amount of land per private farm has not changed significantly. It was 7 ha in 1998 - just slightly higher than the 1990 figure of 6.3 ha. This obviously indicates that relevant constraints are present in the market, causing inefficiencies.

As already mentioned above, the lack of jobs in other sectors of the economy seems to be the major constraint. Also, the low level of education of the rural population causes additional difficulties for farmers in adjusting to the employment market, by increasing human asset specificity. The imperfect credit marke4 and the low profitability of the agriculture sector made it risky for farmers to invest in additional land - contributing to rigidity or favouring transactions of smaller plots.

With regard to the supply of State land available through APAST, even though it represented a considerable source of land for farmers who might wish to increase the size of their holdings there was relatively little interest in it, mainly because most of the State land is situated in the north and west of Poland while private farms dominate in the other regions. This regional separation of demand and supply, coupled with the low profitability of the agriculture sector, stifled potential interest on the part of both private farmers and new entrants.

Another obstacle to an efficient land market in Poland is the high fragmentation of farms into small plots. Some 43 percent of farms are split into four or more plots and on 45 percent of farms the furthest plot was more than 2 km away from the site of the farm (European Commission, 1998: 51). This causes difficulties when negotiating the leasing or selling contract: for instance, if an owner intends to sell or rent land consisting of more than one plot, the plot dispersion may not fit into the buyer's existing land structure. The seller will therefore be forced to search for other potential buyers, incurring an increase in transaction costs.


Comparing the land market situation in the Czech Republic and Poland, it seems that the initial conditions play an important role in explaining the differences in the period after the fall of communism.

In Poland, which had experienced private farming already during the communist period, the land market works much better. An indicative land price does exist, and the behaviour of agricultural agents is more in line with what one would expect in a market economy. However, several constraints are still in place, such as an imperfect credit market, low profitability of the agriculture sector, high unemployment and the low level of education in rural areas, which restrict the market's ability to work more efficiently. Furthermore, additional inefficiencies result from the strong cultural attachment to small-scale farming in many areas in Poland, predominantly in the southeast.

In the Czech Republic the agricultural land market is much more rigid. Agriculture in the pre-transition period was dominated by cooperatives and State farms, with the result that former farmers have lost touch with the farming way of life; moreover, a new generation of farmers, which could form the new farmer class, does not exist. The high costs of transferring land, low demand, low land prices and uncertain rents impede the efficient functioning of the land market. The consequence is a very rigid market with no indicative land price, few land transactions and land remaining under the usage of inefficient units.

Of particular importance in the Czech Republic and in Poland, as former communist countries, is the credible commitment of the State to respecting property rights. If farmers believe that the State will restrict their rights sometime in the future, then they will take this into consideration when making decisions. Therefore they may have less incentive to buy land or they will offer a lower price since they expect that in future they will not be able to appropriate all the benefits from the land. Related to this, Riker and Weimer (1995: 94) point out that: "the post-communist countries face severe problems in establishing the credibility of their systems of property rights for several reasons. First their governments have yet to achieve levels of stability that makes policy at least somewhat predictable. ... Second, ... there does not seem to be a broad and deep understanding of the role of private property in market economies." Also Mason (1992) found that "majorities of residents of the post-communist countries supported values and policies associated with the socialist system, even though large majorities also expressed disfavour toward socialism. ... Third, both historical and current experience of these countries undermines credibility". Consequently, the problems with credibility and non-market behaviour of the agents might be additional factors leading to the inefficient land market observed in both countries.


Arrow, K.J. 1969. The organization of economic activity: issues pertinent to the choice of market versus non-market allocation. In Analysis and evaluation of public expenditures: the PBB-System. Joint Economic Committee, 91st Congress, 1st Session, Vol. 1. Washington, DC, Government Printing Office.

Coase, R.H. 1960. The problem of social cost. Journal of Law and Economics, 3: 1-44.

European Commission. 1998. Agricultural situation and prospects in the Central and Eastern European Countries: Poland. Working Document, European Commission (DG VI), June.

IAFE. 2000. Rynek Ziemi Rolniczej. Institute of Agricultural and Food Economics, Warsaw.

Mason, D. 1992. Attitudes towards the market and State in post-communist Europe. Paper presented at the annual meeting of the American Association for the Advancement of Slavic Studies, Phoenix, Arizona, USA.

Mathijs, E. 1997. An historical overview of Central and Eastern European land reform. In J.F.M. Swinnen, ed. Political economy of agrarian reform in Central and Eastern Europe. p. 33-53. Aldershot, UK, Ashgate Publishing. 432 pp.

OECD. 1995a. Review of agricultural policies: Czech Republic 1995. Paris.

OECD. 1995b. Review of agricultural policies: Poland 1995. Paris.

OECD. 2000. Agricultural policies in emerging and transition economies. Paris.

PMAD. 2000. SAPARD - Operational programme for Poland. Proposal as of 12 September 2000. Polish Ministry of Agriculture and Rural Development, Warsaw.

PMAD. 2001. Note on Polish agriculture. Polish Ministry of Agriculture and Rural Development, Warsaw.

PSI. 2000. Maly Rocznik Statystyczny. Warsaw, Polish Statistical Institute.

Riker, W.H. & Weimer, D.L. 1995. The political economy of transformation, liberalization and property rights. In J.S. Banks & E.A. Hanushek, eds. Modern political economy: old topics, new directions, p. 80-107. Cambridge, UK, Cambridge University Press.

Sarris, A.H., Doucha, T. & Mathijs, E. 1999. Agricultural restructuring in central and eastern Europe: implications for competitiveness and rural development. European Review of Agricultural Economics, 26(3): 305-329.

VÚZE. 1998. Puda 1998. Výzkumný ústav zemedelské ekonomiky [Research Institute of Agricultural Economics], Prague.

Zelena zprava. 2000. Zprava o Stavu Zemedelstvi CR za Rok 1999. Prague, Czech Ministry of Agriculture.

* This research was undertaken with support from the European Union's Phare ACE Programme 1998. The content of the publication is the sole responsibility of the author and in no way represents the views of the Commission or its services.

1 Because State farms and cooperatives were favoured as agricultural production units, private farmers were discriminated against in terms of input supply shortages, higher input prices, higher taxes and compulsory delivery of output, among others.

2 The actual share will be even higher because it is extremely unlikely that production for own consumption is reported.

3 More than a half of the population (54 percent) have completed only basic or primary education, and only 1.9 percent progressed to tertiary education (these indicators for urban districts are 31.4 percent and 9.8 percent, respectively) (PMAD, 2000: 11).

4 Preferential credits are available for farmers in Poland, including those for land acquisitions, but because banks consider agriculture to be very risky they require high guarantees. In addition, Polish farmers traditionally use their own funds to finance investments - a practice that is against profit maximization behaviour.

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