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AFR: Agriculture land prices almost doubled and might reach even EUR 7.000 depending on location

The long-discussed liberalization of selling policies for agriculture land, effective this year prompted lively talks among the stakeholders of one of the few dynamic sectors of Romanian economy. According to Ion Cioroianu, vicepresident of Romanian Farmers Association (AFR), the law will have no benefit in the agriculture since the major deals have already been settled so far.

2014-03-17 12:18:57

"Foreign investors own over 1 million hectares agriculture land in Romania, representing about 12 percent of the overall agriculture amount. This adds to the areas owned by the well-know large Romanain businessmen. I don't see a real problem with the liberalization of land selling prices, since all the large deals have already been signed so far," said Cioroianu.

He also thinks that an up to date land register, the land fusion, irrigation systems and a better accesion to Eu funds are the priorities of a better management for this sector in Romania.

Under the Treaty of Accession to the European Union, Romania is bound to open its land market to EU citizens as of January 1, 2014, which will change the existing ownership regime that allowed only legal entities to buy land. In order to restrict transactions with farmland, the Ministry of Agriculture initiated a bill that cleared Parliament on December 17, 2013, yet with some amendments, one of which refers to the removal of the pre-emption right for people up to 40 year old.

Thus, in the case of sales of farmland outside city boundaries, beginning 2014, the owners can sell under observance of the pre-emption right of individual co-owners, tenants, individual neighbours and the Romanian state. Under the new law, Romanian citizens, citizens of other EU member states, citizens of states that are parties to the European Economic Area Agreement (EEAA), stateless persons residing in Romania, in an EU Member State or a state party to the EEAA, as well as legal persons having the nationality of an EU Member State or of a state that is party to the EEAA will be allowed to acquire land outside city boundaries.

According to data of the Ministry of Agriculture and Rural Development (MADR), at the end of 2011 foreigners were holding more than 700,000 hectares of agricultural land in Romania, representing 8.5 per cent of the country arable surface. In a ranking of foreign land buys, Italy ranked first with 24.29 per cent, followed by Germany with 15.48 per cent and Arab countries with 9.98 percent.
Hungary accounts for 8.17 per cent of the more than 700,000 hectares of land bought in Romania by non-residents, followed by Spain (6.22 per cent), Austria (6.13 per cent), Denmark (4.52 per cent), Greece and the Netherlands (2.4 per cent each) and Turkey (0.78 per cent).

At present, the price of a hectare of farmland can start from EUR 2,000 and can go up to EUR 18,000 , but if the irrigation system is restored, these figures will shoot up towards the EU average of EUR 30,000 plus.

Romania has 13.298 million hectares of farmland of which about 9 million hectares are arable land.

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