Crumbled and scattered parcels, inaccessible fields, frauds with farming subsidies, and problems with floods and droughts – this is the reality of Slovak agriculture. Extreme fragmentation makes it impossible to use land efficiently.
Chaos in the relationships between owners and tenants complicates the work of municipalities, farmers, and government agencies.
On average, one parcel of land is owned by 11 owners, and the average owner has a share in 22 parcels. There are more than 100 million co-ownerships registered.
Land consolidation brings order to land ownership. In our publication, Land Consolidation: The Chance for a Real Reform, we analyze the potential benefits of this process.
The Slovak Ministry of Agriculture has announced the launch of land consolidation in 168 cadastral areas (132,500 ha) for 45 million euros. We looked at the possible valorization of these agricultural plots, as well as at some examples from abroad where the impact of land consolidation on variable farming costs, CO2 emissions, and land rental prices was studied.
The analysis offered both new and borrowed estimates of the benefits for the Slovak farming sector:
The budget of the Ministry of Agriculture and Rural Development for 2019 is 1.193 billion euros. The planned land consolidation costs are about 3.7% of the total budget.
The possible future market value of the land in the mentioned cadastral areas can increase from an extremely pessimistic estimate of 15.9 million euros up to the more optimistic 662.5 million euros.
Land consolidation will facilitate investments in the individual municipalities, both commercial (construction) or non-commercial (cycle paths, nature trails).
Making the Slovak Land Fund more efficient and transparent will open a chance to reform the state land ownership.
In Germany, land consolidation calculations include generated investments and created jobs, impact on tourism, and construction cost savings.
Land consolidation reduces variable cultivation costs. If we count with the lowest German value of additional revenue of 20 euros per hectare, Slovak farmers can get about 2.7 million euros per year for a total area of 132,500 ha.
The increase in rent income varied from 3% to 108% in various areas of Germany.
In our publication, we conclude that the consolidation can increase the value of land and bring many indirect benefits, especially saving costs for communities, farmers, and ordinary people.
However, transitional effects on agriculture also need to be considered. Land consolidation can lead to significant changes in the relationships between owners and tenants.
The future challenges include the commitment to continue the land consolidation during the upcoming election cycles, transparent land selection for the consolidation, or the connection with the Rural Development Program.
INESS will continue to build awareness of the positive effects of land consolidation, for a more transparent land ownership scheme in Slovakia.