Farmland Rental Prices in GM Soybean Areas of Argentina: Do Contractual Arrangements Matter?

Abstract

In this paper we study the determinants of the rental price of farmland in the Argentinian Pampas. In particular, we examine the price of lease contracts using a hedonic price model, while controlling for other potential sources of variation. Using firsthand data for 255 plots, our results indicate that both short-term contracts and contracts with sowing pools push rental prices upwards. We also find that soybean yields have a significant impact on land rental prices. These results suggest that if Argentina intends to protect the enormous natural advantage it has for agricultural production, it should consider strictly regulating land rental contracts.