Will Belgium regulate the land market?

Last week, the Belgian federation Fedagrim called on the Belgian government to intervene more actively in the land market message Felt. Fedagrim wants a land bank, whereby the land price will be further regulated.

Much less farmland
The rationale for regulation is clear, so suggests Fedagrim. Since 1990, about 12% of all land in Europe has been withdrawn from agriculture, which is equivalent to 22 million hectares or an area the size of Romania. This process is also underway in the Netherlands. Since 1980, the agricultural area has decreased by 251.947 hectares, according to figures from the CBS.

In Europe a lot of land is owned by relatively few owners. About 3% of European companies cultivate about 50% of European agricultural land. The majority of those companies (80%) only own 14,5% of the land. That puts pressure on prices. In Belgium the average land price has already risen to €45.000 per hectare and in The Netherlands it is even €60.000 per hectare.

System of France sounds attractive
The rising prices are the reason for Fedagrim to look for alternatives. The best alternative is found in France, where the market has been regulated by SAFER since the 60s. The organization carries out land use planning from regional associations, with the aim of promoting the agricultural sector.

According to the Belgian federation, the system of France has several advantages:

1. The associations ensure that the land price Relatively low stays. About €6.000 per hectare is paid; in Northern France it is €10.000. This is because the agency can intervene if land is sold for non-agricultural purposes. The supply can therefore be kept the same. In addition, this also ensures that there are fewer potential buyers, because 'real farmers' are preferred. SAFER also has insight into the transactions and can act as an intermediary.
2. Young farmers can find land relatively easily in France. In 2014, 34% of the land was made available to new farmers. Also, economies of scale and the number of mega companies in the country are still limited. 
3. The system in France ensures, among other things, that the land for agricultural purposes remains in the agricultural sector.

Best project must be leading
Fedagrim also wants to set up a land bank in Belgium, which corresponds to the French model. This bank must gain insight into all transactions, via the notary and the selling party. The bank must also be able to buy and sell land. The highest price should not be leading for the sale, but (just like with SAFER) the best project should be leading.

The 'best project' is determined on the basis of various criteria: the financial viability of a company and the prevention of speculation on the real estate market. The land should also only be available to 'real farmers'.

Cons
However, such a system naturally has drawbacks, such as a complex administration. Dutch brokers also run into this. SAFER would also not always act completely independently. However, the introduction of such a system in Belgium could eventually lead to a fall in the price of land. That is positive for many, but a lot less positive for those who have invested in land at the current price level.