Interview Adam Oliver
'In Eastern Europe you are still taken seriously as a farmer'
Increasing regulatory pressure, the transition to circular agriculture and a ministry that is struggling with a revenue model for the farmer. Dutch agriculture faces major challenges. Partly because of this, some farmers are considering a new start abroad.
Talked about the opportunities to farm in Eastern Europe Boerenbusiness with Adam Oliver (photo), Agri Business Consultant at Brown & Co. Originally an English real estate agency and consultancy. The company has been active for more than twenty years in advising and brokering for farmers who want to set up a business in Central or Eastern Europe and has branches in Poland and Romania.
In the Netherlands, but also in the UK, Ireland and Germany, for example, the business climate for agricultural entrepreneurs is changing rapidly. Does this increase interest in emigration?
"I follow developments in the Netherlands from a distance. What is happening in the Netherlands fits in with a broader trend. I hear from some of our customers in Germany or Ireland that they fear that what is happening in the Netherlands will affect their vans in about five years' time. applies. The UK is a completely different story. Since Brexit, now three years ago, European support from the CAP has ceased. The UK government has said it will come up with an alternative to European support in the form of a kind of greening premium. How, what and when has never been properly communicated with the sector. Farmers therefore don't really know where they stand."
"Partly because of this, the interest in emigration is increasing somewhat. But moving a farm - especially abroad - is a very big step. In the end, it is a small group that actually crosses the border. In general, we do see that farmers from Northwest Europe who are considering emigration and are looking at further destinations. If you now go from the Netherlands just across the border to Germany, you run a good chance in a few years' time with the same problems that caused you to leave the Netherlands. If you, as a farmer, If you take a step, you also want to be able to move forward for a longer period of time."
Are the opportunities in Eastern Europe not over? The price of land is also rising rapidly there and the same European rules apply there...
"There are still opportunities for enterprising farmers in the former Eastern Bloc. Especially around the turn of the century, there was a lot of interest in agricultural companies behind the recently fallen iron curtain. The former state-owned companies were privatized, but the new companies had difficulty raising capital and therefore had no or difficult access to, for example, better new varieties, machines, plant protection products and fertilizers. Land was seen as a burden more than twenty years ago. This attracted farmers and investors from the west. They were attracted by the low land prices and had experience with the When Poland, the Baltic States and the Czech Republic, among others, joined the EU in 2004, and Romania and Bulgaria in 2007, these countries feared that even more farmers would migrate from the west to the east. for agricultural emigration is small For farmers looking for space, but within d want to remain in the EU, the former Eastern Bloc offers opportunities."
"The business climate in Eastern European countries is also more favorable to farmers. In countries such as the Netherlands, Germany and the UK, agriculture forms a very small group in society. For politicians, they are too small a group to be of electoral importance and the The influence of the agricultural lobby is no longer significant if you compare it with a few decades ago. The situation in Poland or Romania, for example, is comparable to how it was with us two generations ago. If you speak to someone, he or she often has a direct link with agriculture. That person works directly or indirectly in the agricultural sector or is connected to the sector through family. As a farmer, you still really participate in politics. As a result, the administrators and civil servants still have real knowledge about how things are done in agriculture actually matters. The EU rules are the same, but the implementation in local legislation is much better translated into practice. I should note that that agriculture in the east is less intensive than in the west of Europe, which means there is more room for maneuver."
How is the transfer abroad made?
"Many of our customers opt for a second company abroad. A situation that often occurs in practice is that the father stays on the company in the home country and the son manages a company in Poland, for example. There are also entrepreneurs who extensify or downsize and invest the freed-up capital in a new company in Eastern Europe. During the busy periods in spring and autumn, they are often on the farm in Eastern Europe. They also commute back and forth and the day-to-day management is in the hands of a farm manager. It is mainly in arable farming that this method is used. With livestock, the risks of things going wrong in a short time are greater and entrepreneurs generally do not transfer the responsibility as easily. For livestock farmers it is therefore less usual to set up a second company."
And the land prices, what amounts should we consider?
"The land market has changed radically in the last twenty years. The price increase of land in Poland went fast shortly after the turn of the century. That price increase is now leveling off somewhat and you see clear differences between good soil, suitable for arable crops, and soil that is only suitable for is for grassland. The land market has matured there in a sense. To give an idea of the spread in price, the bottom of the market is around € 4.500 per hectare and at the top, for good soil without stones and favorably parceled out paid approximately €35.000 per hectare. The rental rates in Poland vary from approximately €300 to €500 per hectare."
"In Romania, the land market is more complex. Large plots with many different owners who often have less than a hectare in a plot. If you can buy land as a plot, prices range from around €3.500 to €9.000 per hectare. The price difference between the good plots and the lesser one is somewhat less competitive than in Poland. The land market in Romania is still less developed. Lease prices in Romania are also lower than in Poland at around €150 to €300 per hectare. Location is becoming more important for potential customers who are interested in Romania. The south-east of the country is sensitive to drought. In the north that is better, but being able to irrigate or not can make a big difference in yields and therefore the price of land."
Many different owners of a plot. Isn't that a major barrier to setting up a company in Romania?
"The fragmentation of land in Romania deters some buyers, but it doesn't have to be a disadvantage. Many landowners are elderly. They often want to sell over time or the heirs would rather have money than divide the land. As a tenant you can you then gradually take over the land. As a tenant of the land, you have the first right to buy."
"A construction that is often used for customers in Romania is that we look for a running lease company for a customer. For a company with 500 hectares on which the lease runs for another five years, you will have to pay approximately € 250.000 to € 375.000 (€ 500 to € 750 per hectare). The buildings and machines must also be added. From approximately €750.000 to €1.000.000 such an agricultural company can be set up in Romania. That is the real minimum, by the way. A company with 500 hectares of mowing crops is with a good manager and an owner who regularly visits the farm economically viable. Several of our customers do it this way and can earn an income from it. That is quite apart from the increase in the value of the land in the longer term. That was the been very strong in recent years.”
Jurphaas Lugtenburg
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