The price level of German agricultural land has risen to such an extent in 10 years that it has reached an economic limit for many companies. That reports AgriHeute Monday.
Between 2007 and 2015, purchase prices for agricultural land more than doubled on average. An average of about €19.578 is now deposited for one hectare. In the former federal area, the price rose from €16.394 to €29.911 per hectare. In the former GDR states there is an increase from €4.134 to €14.197 per hectare. Tenancy prices rose from an average of €215 to €385 per hectare in that period.
Business expansion hampered
Both purchase and lease prices have climbed to levels in many regions that make it economically difficult for many agricultural companies to protect themselves against loss of leased land or to expand their business by purchasing land.
Foreign investors
The government assumes that foreign investors have contributed to the current market situation. Because of the soil fertility and sustainable land management that this threatens, Germany is pushing for a wide distribution of land ownership. To give farmers a good position on the land market, legislation and regulations need to be amended, as well as more market transparency.
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