Easier farmland purchases for foreigners could threaten Czech farmers

Easier farmland purchases for foreigners could threaten Czech farmers

Radio Praha | 22-02-2007

Coilin O'Connor

The Czech government has recently backed proposed legislation that should make it easier for foreigners from EU countries to buy Czech farmland. Until now, foreign EU citizens have been obliged to meet a number of conditions, such as being able to speak Czech, before being able to purchase arable land. If the proposed change in the law is passed, it should bring Czech legislation into line with the rest of the European Union. Nevertheless, critics including the country's biggest farming associations say the move could have devastating consequences for Czech farmers.


The government's announcement that it wants to make it easier for EU citizens to buy farmland in the Czech Republic has caused consternation in Czech farming circles. As agricultural land in the Czech Republic is around ten times cheaper than it is in countries like Holland, many are afraid that Czech farmers won't be able to compete with foreign property speculators.

These concerns are heightened by the fact that most Czech land is not owned by Czech farmers, as the vast majority still rent them at very low prices from the farming cooperatives who succeeded the old communist collective farms. Tomas Petana is vice-president of the Czech Agrarian Chamber:

"We fear that Czech farmers are undercapitalised. They don't have enough money to buy the land they work on. This is simply because they have already had to invest a lot of money -- firstly after the transition from the communist era and then they had to invest during the privatisation period. Afterwards, during the run-up to EU accession, they had to invest a lot of money to meet EU criteria. Now they simply don't have enough money. As nearly 90% of Czech farmers work on rented land, they are very vulnerable to any changes in land prices, ownership and so on."

The Czech Agrarian Chamber argues that changing the law to make it easier for foreigners to buy land in this country should be postponed. In fact, when the Czech Republic negotiated its EU accession terms, it was granted a transition period of seven years before it had to implement EU legislation on allowing foreigners to purchase forests and farmland.

This means that the country does not actually have to introduce the measure that is now being proposed until 2011. Farmer's groups like the Czech Agrarian Chamber say that this period of grace would give farmer's time to get the money together to purchase the land they work on before other EU nationals buy it out from under them.

Tomas Petana says the government should be concentrating on reforming the current situation concerning land ownership before trying to facilitate the rights of foreigners.

"I think it's important to concentrate on land reform -- not by allowing foreigners to buy out all our land. I think it's possible to concentrate on some possibility such as making some cheap credit available to farmers and so on, which would allow them to change the percentage of rented land and owned land."

Although the cabinet has backed the idea of making farmland purchases easier for foreigners, the proposed legislation still has to be passed by parliament and signed by the president. The opposition communist and social democratic parties have indicated that they will vote against the proposals, while some of the government's own civic democrat MPs have also expressed doubts about the wisdom of the plan.
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