Dr. Andrzej Zadura Agricultural Property Agency - Poland

ELO - Conference Series 2003/2004Brussels, November 6-7, 2003

CAP Reform: Entrepreneurial Opportunities in the Enlarged EU

How could Enlargement Influence the European Land Market?

Agricultural Areamillion hectares (ha) in 2002

Poland 18.4Hungary 5.9Czech Republic 4.3Lithuania 3.5Latvia 2.5Slovakia 2.4Estonia 1.0Slovenia 0.5Cyprus 0.1

total CC - 9 38.6

Agricultural Areamillion hectares (ha) in 2002

total EU-15 130.4France 29.9Spain 25.4Germany 17.1UK 15.7Greece 3.9Portugal 3.9Source: EU Commission

Poland - Agricultural Area by Usersand Land Types in 2001

(1 000 ha)Agricultural land areaTotal 18 392of which: individual farms 15 550Agricultural land area (total) 18 392of which : arable land 14 046

orchards 268meadows & pastures 1 739Source: Poland - Central Statistical Office

Number of private holdings

Poland - Year in thousand 1990 2 138* 1995 2 048* 2000 1 881*

EU -15 (2000) 6 776 Italy 2 152 Spain 1 287 Greece 814 Germany 472 Portugal 416

Source: Poland - Central Statistical Office, EU -15 - European Commission.

* excluded private agricultural plots of up to 1 hectare of agricultural land.

Poland - Private Holdings by Area Groups in 2001

in percent

Poland - total 100of which: 1.01 - 1.99 ha 23 2.00 - 4.99 34

5.00 - 9.99 24 10.00 – 14. 99 10

15.00 and more 9Source: Central Statistical Office.

Average size of holdings (ha of agricultural land)in 2000

Poland 7.2EU-15 18.7UK 67.7France 42.0Germany 36.3Portugal 9.3Italy 6.1Greece 4.4

Source: Poland -Central Statistical Office, EU-15 European Commission.

Employed in Agriculture, Fishing and Forestry in 2000 (1 000)

Poland 2 727Lithuania 298Hungary 252Czech Republic 237Slovakia 140Latvia 131Slovenia 89Estonia 45Cyprus 15Malta 3 total CC-10 3 937

total EU -15 6 790Italy 1 120

Spain 989Germany 988France 971Greece 671Portugal 616

Source: Polish Central Statistical Office

Polish State Farms (beginning of 90-ties)Agricultural land - public sector, million ha 3.7 - number of state farms 1 666 - average area of state farm (ha) 2 500 - state farm workers 470 000

Agricultural Property Agency (APA)

• formation of land system (structure of farms); • restructuring the agricultural State Treasury property;• sale/lease of agricultural State Treasury property;• management of agricultural resources of State Treasury;• creation of work places connected with restructuring state agriculture;• assistance for former state farms’ workers.

Agricultural Property Stock of the State Treasury (APS)(end of 2002, in thousand ha)

• Land taken over into APS 4 705 in which from: - state farms 3 759 - other sources 946

• Land taken over into APS 4 705 of which: - agricultural land 3 960 - forests and forested areas 169 - ground under water 342 - roads, residential areas, others. 234

Agricultural Property Stock of the State Treasury Land Distribution

(end of 2002, in thousand ha)

Total 4 705in which:- lease 2 408- sale 1 272- free of charge transfer 244- management/administration 116- others 66- contribution into companies 15

Awaiting for disposal 584

Lease/Sale of Agricultural State Treasury PropertyTender Procedures

• public open auction (oral bidding),• public auction of written offers,• tender for specific target groups (farmers, former workers of state farms, members of agricultural co-operatives).

State Land MarketLeasing

period of time - 10 years (option to extend up to 30 years), rent proposed by written offer or oral auction, rent expressed in cash or in kind (cash equivalent of wheat value), rent not charged for agricultural land of class VI, livestock, stocks, production in progress, machines purchased by lessee, the highest bidder (oral bidding), the best lease terms (written offer) win the tender, exemptions from rent (idle land, bad state of subject of lease, creation of new work places), extension of contract - not need new tender, instalment payment scheme for working assets and movable.

Leasing – Private Market

a. small plots of land (3-5 ha) b. often -oral lease contract,

c. short term contracts (3-5 years), d. often - free of charge leasing, rent replaced by payment of land tax or neighbour’s aid.

State Market – Leasehold Rent Amount

Since 1992 the average leasehold rent on the state land market amounted to cash value of 200 kg wheat per hectare (about 100 PLN, i.e. 20 EUR).

Private Market - Leasehold Rent Amount

% of Contracts in 2000

- free of charge leasing, rent replaced by payment of land tax or neighbour’s aid 50 - the leasehold rent of up to 200 PLN/ha 25 - the leasehold rent from 200 to 500 PLN/ha 25 Source: Estimations of Research Institute for Agriculture and Food Economy

State Market - Financial Land Policy

- one purchaser’s ownership cannot exceed 500 ha,- price of state real estate entered into register of monuments can be reduced up to 50%, - instalment payment scheme;a. down payment – at least 20%,b. remaining dues - instalment payment scheme of maximum 15 years,c. interest rate of unpaid cash dues. No interest for unpaid dues expressed in kind.

Poland – Average Prices of Land(PLN per ha)

4.5 PLN = 1 EUR

Year Private Market* State Market**1995 2 421 1 4912000 4 786 3 5542001 5 197 3 4142002 5 042 3 668***

*arable land**agricultural land*** IVquarter of 2002Source: APA, Research Institute for Agriculture and Food Economy

Prices of Agricultural Land in Europe2001

Country EUR/ha

Netherlands 30 000Belgium 30 000

Germany 25 000*Ireland 12 000United Kingdom 11 400

France 10 000Poland 1 400Romania 400

Source: European Real Estate Council* The prices on the area of former German Democratic Republic

are lower about 50%.

EU and EU Area Agreement Nationals who want to be self-employed farmers and who have been legally resident and leasing land in Poland for at least 3 years continuously are the subject of the same procedures as nationals of Poland regarding the purchase of agricultural land and forest (from the date of accession - 1.05.2004).

Poland - European Union RelationsTreaty of Accession - Free Movement of Capital – Agricultural

Land Purchase

Poland may maintain in force for twelve years from the date of accession (01.05.2004) the rules regarding the acquisition of agricultural land and forests by foreigners (permit necessary)

• In the Warmińsko-Mazurskie, Pomorskie,Kujawsko-

Pomorskie, Zachodniopomorskie, Lubuskie, Dolnośląskie,

Opolskie and Wielkopolskie voivodships (voivodship – province

of Poland), the residence and leasing period shall extend to

seven years.

Polish Land Policy -Individual Farmer(Definition)

(Act of April 11, 2003 on Formation of Agricultural system – came into force on July 15, 2003)

natural person, owner or leaseholder of agricultural property, managing farm personally, having proper qualifications, residing in the commune, where at least one part of the property is situated.

Polish Land Policy - Family Farm ( Definition)

managed by individual farmer total area of agricultural land - no more than 300 ha (own and leased).