Slovakian Land Acquisition Ban Is a Joke

Farmer working in the fields
Image by stockmedia.cc - stockarch.com || Creative Commons

Like in several other East European states (Hungary, Lithuania, for starters), Slovak government tried hard to come up with a populist solution following the expiration of the moratorium on land sale to foreign nationals. Riding on the wave of historical fear (foreigners will come and buy out the soil of our fathers!), Slovak government quickly came up with a new protective law. It’s rather complicated, but in general, it forbids any agricultural landowner to sell land (2000 square meters and more) freely to just anyone. The willing seller has to actively search for an interested local farmer and offer him the land for “usual” price first.

While officially presented as a law to protect Slovak land from foreign “speculators”, the law serves mainly the interests of local agro-barons. Slovak agricultural production is controlled by a handful of large agricultural companies (average farm size in Slovakia is among the highest in the whole EU), which are renting land for extremely low prices (for historical reasons). The law helps them to control their positions in regions.

The ban hit mostly ordinary people. Many (often elderly) people in Slovakia hold titles to agricultural land, which they are renting to local agricultural companies, which are usually some kind of transformed remnants of the previous socialistic forced cooperatives. The law significantly reduces options to sell for these people, thus reducing the market price of their property often by multiples. Especially in the poorer regions of Slovakia, the owned land plot is the single valuable property they own and a good sale could mean richer retirement for these people.

Naturally, bigger investors and speculators are always one step ahead of the law. If really interested, and assisted by lawyers, any foreign investor can circumvent the law by buying Slovak agricultural company with the land it owns. Or even much simpler tricks were employed (recently countered by a new law change). Sellers could simply state, they are relatives with the investors, and the ban would not apply.

However, it was only a recent event, which fully exposed the ridiculous nature of the ban. When a new investor (Jaguar Land Rover) announced large investment in Slovakia, government promised 7 million square meters of agricultural land for the new factory in the speed of light. It even promised to implement stricter laws concerning land appropriation (in case some owner wasn’t willing to sell the land freely) and speeding up the process of urban planning (turning agricultural land to a construction allowed land). Sadly, a group of (Slovak) insiders was even enabled to cheat dozens of local people into selling their ground few days before the investment was announced, before the price went up 10-20 times.

Suddenly, foreigners taking control of Slovak agricultural land are no problem for the government.

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