Agriculture & Food industry

The government wants to stop the sale of agricultural land for 5 years

The Department of Agriculture has released the draft of the law in the Official Journal BIP that will regulate an agricultural land transaction from 1st May, 2016. It is titled ‘Law on the setting of selling real estate from agricultural property holdings of the treasury and provides a 5-year ban on the sale of state-owned agricultural land.

This agricultural land should now be protected in Poland from speculative buying by foreigners, they advise. The authors of the bill considered, that there is a great possibility of increased interest in the purchase of agricultural land by people who are not actually farmers, from what they have experienced up to now. One aspect of this has been numerous transactions for the purchase of agricultural land by foreign natural and legal people, using Polish citizens as middle-men, who are financed solely for the purpose of purchasing the land and are only owners by title. In reality the land is in the power of use by the foreigners, who are preparing themselves for 1st May, 2016 for the formal takeover. From this date, the 12-year transitional period expires, which Poland negotiated she joined the European Union 2004.

In relation to this, EU foreigners are able to purchase agricultural land in Poland without a need for authorisation from the Interior Ministry.

The PiS government now wants, with the planned new law, to withdraw this option, as the state agency is still the largest owner of disposable agricultural land. Overall, there are still 1.5 million hectares, of once, 4 million hectares of farm land was owned by the state agency which they adopted after the dissolution of state land (PGR) in the early 90’s. Their basic form of management should be the permanent lease. To avoid speculative purchases, the land transaction is to be subjected to a closely monitored control group.

The acquisition of agricultural land can only be awarded to individual farmers. They point out that Polish farmers cannot compete with potential buyers from Western European countries, for financial reasons, because of their lower incomes.

The draft law defines individual farmers as people, who have agricultural training, who can only farm on a maximum of 300 hectares of land and be a resident in the local community for at least 5 years. Furthermore, they should be working within the agricultural sector. This condition shall be considered to be satisfied when their income from the farm is at least a quarter of their revenue from an agricultural area of over 20 hectares.

The restrictions on land sales do not apply when it comes to agricultural land, to be used for a public purpose, such as for housing.

The planned law will come into effect on 30th April, 2016.

Source: Wirtschaftsmarkt Polen (January 2016)