Does Taxation Change the Land Strategy of Farmers? Evidences from Albania

Fatmir Guri1, Elena Kokthi2, Eneida Shehu (Topulli)3,Natasha Hodaj4

Abstract

Fallow land is a major issue in Albanian agriculture. According the Faostat figures, nearly 20% (between 16 and 17%) of agricultural land is fallow land, and more than 1 out of five agricultural farms, do not cultivate at least one part of their agricultural land. The agricultural land is a scarce resource in Albania, with 0.4 ha/habitant (FaoStat), Albania is ranked among the countries which have a less surface for habitant, on Balkan peninsula. On this regard, the agricultural policy should provide instruments in order to incite farmers to increase the cultivated land surface. The paper seeks to assess the optimal level of a tax on fallow land which is going to change the farmer strategies, and reduce the surface of the fallow area. It proposes a hypothetic scenario and asses the willingness to pay of owners for leaving their agricultural land not cultivated, and or to rent or sell it to farmers who are willing to cultivate it.

Keywords: Fallow land, land taxation, payment card method, Albania
JEL Code: Q15, Q24, R14, R52

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