News Ground
Not only the price of land is important in Eastern Europe
Foreign investors in land have shown more interest in Eastern European countries in recent years. Farmers who have hardly any growth opportunities in Western Europe can often grow much more easily in these countries.
When we go to the land prices Looking at the Eastern European countries, the explanation for investing in Eastern Europe is obvious. In a country like Poland, land prices are easily 10 times lower than in the Netherlands. And compared to Romania or Hungary (€2.000 and €4.182 per hectare respectively), the land in Poland is even expensive.
Dissatisfaction among local farmers
However, there is also a flip side to this story. Since the accession of the Eastern European countries to the European Union, the attraction for European investors has increased. These investors sometimes buy tens of thousands of hectares of land, as the Danish Karsko Group has done.
The local farmers are not always happy with this. It makes it more difficult for them to find land and results in a changing form of competition. These large investors are also often in stark contrast to the local farmers, who only farm 10 hectares on average.
Against the Union
Since the competition is partly caused by the accession to the European Union, there is increasingly a movement against the European Union in these countries. A country like Poland therefore wants to prevent more and more land from ending up in foreign hands.
In addition, large farmers receive more subsidies from the European Union, which also causes a lot of dissatisfaction (especially among smaller farmers). In December 2018, this even led to demonstrations. In the plans for the new subsidies from the Common Agricultural Policy, a cap introduced for large companies.
Ukraine
However, there is also dissatisfaction with Eastern European countries that do not belong to the EU-28. Although a country like Ukraine has a ban on land sales, foreign investors still manage to take advantage of the cheap land. Companies like Cargill, for example, buy shares in large Ukrainian agricultural companies, which also causes dissatisfaction among local farmers.
The country has more than 30 million hectares of fertile arable land, making it the largest agricultural area in Europe. Although the international community would prefer Ukraine to lift this ban, the Ukrainian parliament chose to extend the ban for 2018 year in early 1.
Culture plays a part
Although the price of land makes many Western European farmers jealous, culture must also be taken into account. It is not only the attitude towards the large, modern farmers that plays a role, but other culture-related factors are also playing an increasingly important role.
Anne-Jan Doorn
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