Measuring the effectiveness of land consolidation: An economic approach based on selected case studies from Poland

Land consolidation projects (LCP) are the most effective method for quick amendment of poor land fragmentation parameters. At the same time, they are costly due to both a long time horizon and auxiliary projects, in particular, road construction and improvement of field drainage or irrigation systems. The range of changes in parcel arrangement after consolidation varies, as does the economic efficiency of LCPs related to the changes. The paper proposes a approach to the assessment of LCPs that takes into account the production and income effects, which influence the income of farmers participating in consolidation processes, and potential benefits, such as the increased value of farmland and the effect of improved quality of cadastral documentation. Static and dynamic economic feasibility indices were calculated. In the latter case, a thirty-year life of the project and a 2.5 % discount rate were assumed. The study involved six projects completed in Poland under the European Union Rural Development Programme 2007-2013. The effectiveness of the investments was found to vary significantly. The calculated payback period was most often a few to several dozen years, depending on the project, index, and scope of considered effects. It has been demonstrated that if potential economic rents are included, the estimated payback period for an LCP can be reduced several times. It was further concluded that it is necessary to develop a method for the valuation of non-production effects of LCPs such as social, environmental, and landscape benefits.