Croatia to extend moratorium on sale of farm land to foreigners

The EU countries have taken different actions on the topic. For instance, Hungarian Prime Minister Viktor Orban prevented the sale of agricultural land to foreigners by changing the Constitution. [Shutterstock]

Croatia will soon submit a request to the European Commission to extend a seven-year moratorium on the sale of agricultural land to foreigners, the newest EU member’s assistant minister of agriculture announced on Thursday (20 September). EURACTIV Croatia reports.

“The request is in the phase of translation, in a few weeks, possibly by the end of the month, it will be sent,” Krunoslav Karalić told the parliament’s agriculture committee.

In June 2020, the seven-year moratorium on the sale of state and private farmland to foreign nationals and foreign legal entities expires.

The moratorium, which came into force when Croatia joined the EU in 2013, aims to protect Croatian farmers from global competition. On the basis of the EU Accession Agreement in 2011, the European Commission gave Zagreb the possibility to extend the moratorium for an additional three years.

But the extension request has not been made yet, though the ministry of agriculture has repeatedly said a request for a moratorium is being prepared and will be submitted in a timely manner.

In July, the Croatian Peasant Party (HSS) lawmakers complained that the government had nothing to extend the moratorium. HSS President Krešo Beljak warned that a failure to extend the moratorium “opens the door to foreign capital” and Croatian farmers wouldn’t be able to compete.

Former Agriculture Minister Tomislav Tolušić then said a request would be filed in mid-September, and added that other member states had submitted a similar request several months before the deadline.

Land for foreigners?

Given that Croatia’s rural areas are being abandoned, there are fears that the agricultural land, which is much cheaper compared to other EU member states, will easily fall into the hands of large agricultural and foreign investors.

According to the Agricultural Land Agency, Croatia has a total of 2,695,037 ha of farmland. Although the value of agricultural land in Croatia is estimated at more than €9 billion, the latest Eurostat data shows that Croatia is close to the bottom of the EU average price per hectare of land.

The prices per hectare of farmland are €2,809 in Croatia, followed only by Romania (€2,735) and Estonia (€1,958).

Will it be approved?

The EU countries have taken different actions on the topic. For instance, Hungarian Prime Minister Viktor Orban prevented the sale of agricultural land to foreigners by changing the Constitution.

Slovenia, Romania, the Baltic states and Denmark (as an old member state) have provisions in their laws which make it difficult or impossible to sell land. However, after attempts to extend moratorium by Bulgaria, Slovakia, Hungary, Latvia and Lithuania, the European Parliament launched infringement proceedings against them ‘for restricting competition’.

Karalić was rather optimistic during last week’s debate, saying the moratorium had been granted to “all member states that had such requests so far”. He stated that Croatia will justify its request with data on different agricultural land prices, which are among the lowest in the bloc, data on purchasing power, average wage, etc.

Damir Felak from the conservative Croatian Democratic Union (HDZ) party reminded that when Croatia joined the EU, it signed obligations to be adhered to. The 7 + 3 moratorium should serve to prepare Croatian farmers to be competitive, to buy domestic land instead of buying it from foreigners.

He said that after the moratorium has expired, foreigners will be able to buy the farmland and that the only way for this to be avoided would be a “Croxit”, meaning leaving the EU. He also noted that foreign companies already own farmland in Hungary.

The HSS Interpellation on the Committee was rejected by three votes in favour and six against. Ana Maria Petin (HSS) said the HSS initiative has nevertheless achieved a certain goal. “We have encouraged thinking that the request for a moratorium should be extended,” she said.

[Edited by Zoran Radosavljevic]

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