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THE AGRICULTURE MINISTRY WANTS QUALIFIED PEOPLE TO OWN THE LAND

Land ownership rules to change

SLOVAKIA will remove the last barrier for foreigners wishing to acquire agricultural and forest land, as next year people from other European Union countries will be subject to the same conditions as Slovaks, as part of the latest amendment to the Foreign Exchange Act prepared by the Finance Ministry. Yet, it is possible that the state will require potential applicants to have the relevant education and land management experience.

Newrules aim to protect agricultural land.(Source: SME)

SLOVAKIA will remove the last barrier for foreigners wishing to acquire agricultural and forest land, as next year people from other European Union countries will be subject to the same conditions as Slovaks, as part of the latest amendment to the Foreign Exchange Act prepared by the Finance Ministry. Yet, it is possible that the state will require potential applicants to have the relevant education and land management experience.

These requirements are part of the Agriculture Ministry’s draft proposal of a new law on acquiring agricultural land. One of its main changes is to require that people are competent to manage the land and have permanent residence in the municipality where it is located. The ministry will unveil the specific rules by the end of December.

Both the Finance and Agriculture Ministries say the two laws will not conflict with each other.

“The aim of the Agriculture Ministry is to secure the effective usage of the agricultural land for agricultural purposes, and not for building industrial centres or residential construction,” Peter Hajnala, head of the ministry communications department, told The Slovak Spectator.

The opposition, however, says the plan is unconstitutional.

Currently, only foreigners who are Slovak citizens or citizens of any EU country with temporary residence in Slovakia can acquire land which they have been managing for at least three years. According to the amendment, based on international regulations, foreigners with Slovak citizenship and also citizens of any EU country or member of the European Economic Area can acquire land under the same conditions as Slovaks, head of the Finance Ministry press department Radko Kuruc told The Slovak Spectator.

The ministry submitted the amendment to interdepartmental review in mid August. If passed by the government and parliament, the new rules will become effective on May 1, 2014.

The discussion over the amendment was scheduled for September 26, but the government did not pass any decision before The Slovak Spectator went to print.

The conditions will now be set by the Agriculture Ministry. The aim of its new legislation is to protect land from degradation and ensure that it will be used for farming. Moreover, the law should prevent speculative purchases of agricultural land.

Up to 39.82 percent of land has been purchased by people who were difficult to identity and for purposes that were unclear, according to the statistics provided by the ministry. Real estate agencies and law firms have acquired about 60,000 hectares for their clients who do not farm on them, reads the ministry proposal.

However, Zsolt Simon, former agriculture minister and current Most-Híd MP, considers the law to be a “marketing move”, adding that the proposal is at odds with the constitution.

“We are going to limit a big amount of people for a few chosen,” Simon told the Sme daily.
Slovakia can pass measures restricting land acquisition in order to protect nature and the land. Yet, these measures should not discriminate against people from other EU countries. This means that if an Austrian graduated from an agricultural school in Austria, Slovakia would have no reason to prevent him from buying land, Andrej Leontiev, from TaylorWessing e/n/w/c Attorneys at Law, told The Slovak Spectator.

He added that some foreign investors might avoid the prepared legislation. They can purchase the land through a Slovak company employing people who formally meet the criteria, Leontiev explained.

Land for experts only

Two basic conditions for ownership of agricultural land will be graduation from agricultural school and a specified length of time spent farming land that applicants will rent from state. People with an education in agriculture will have to farm the land for a shorter period than those without it. According to the ministry, applicants will be allowed to rent the state-owned land without restrictions. The requirement to farm land for certain period of time will not apply to farmers younger than 40, or to family farms, according to the proposal.

The applicants will also have to have permanent residence in the municipality in which the land is located. If not, the prospective land buyer will have to rent the farm and use it for a certain period of time, the proposal reads. The ministry has not specified how long it will take. Farmers will also have to prove that they are actively farming the land, according to the proposal.

The ministry still has to specify which institution will check whether applicants can acquire the land and issue permits.

The new rules will not affect agricultural land in developed areas or land which, according to the land plan, should be used for non-agricultural purposes, the proposal reads.

The ministry will also not approve the acquisition of land by foreigners outside the European Union whose homelands do not allow Slovaks to buy their land.

Moreover, in response to opening the land market to foreigners, the Agriculture Ministry has launched a new state-run programme, “My Land”, the SITA newswire wrote.

Since the beginning of July, farmers have enjoyed more favourable terms for loans from Slovenská Záručná a Rozvojová Banka (SZRB). The bank requires only a 15-percent share of their resources, with interest rates standing at 3-4 percent.

Farmers can borrow up to €390,000, and repay it within 15 years. The guarantee will be the purchased land. SZRB has allocated €20 million for the project, according to SITA.

The ministry sees some problems

During the interdepartmental review, the Justice Ministry said some measures might not be in compliance with the constitution, ministry spokesperson Alexandra Donevová told The Slovak Spectator. Some proposals might conflict with the constitutional right of ownership, or cases when, for example, people acquire land in an auction or a bankruptcy proceeding. Moreover, the ministry disagreed with the law’s aim to “define groups of people who are eligible to acquire agricultural land”.

Regarding interference with the right of ownership, Hajnala said that they will discuss with the Justice Ministry the measures affected by the Civil Code. He also said the ministry modified the text based on the comments it received by the Justice Ministry and others.

“All ministries will contribute to the paragraph wording of the law, at least through the interdepartmental review,” Hajnala said.

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