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What are the Restrictions on the Purchase of Farmland in Different Countries?

As it is known, the Georgian Constitutional Court invalidated the Moratorium on the acquisition of agricultural land by foreign citizens. According to the parliamentary majority, it coincided with the beginning of active work on the formation of new regulations on this matter. Proceeding from this, the Ministry of Economy of Georgia decided not to renew the land privatization, which are state-owned.

“We will develop such  regulations that will not violate the rights of skilled and qualified investors as well as  the banking system. With regard to the suspension of the privatization process by the Ministry of Economy, it was necessary to wait for the development of a new law that will take into account international practice, in order the  land privatization not to lead to an increase in social problems and unpredictable developments,”- Economy Minister Giorgi Kvirikashvili said.

According to him, agricultural land must be sold, but regulation and restrictions are  needed.

How things work in this area in the developed countries of Europe? How the right to sell agricultural land to foreigners is regulated there?

Germany: Procedures for purchase of agricultural land are regulated by a special law, which imposes certain restrictions on foreign individuals and legal entities. The consent of a special regulatory body is required for minimum purchase of the land (in each region of Germany it is different). A regulator determines whether anyone has a preferential right to purchase the land – in most cases, the German government encourages consolidation of farm land and therefore, German citizens owning land near the area to be privatized, have the priority right to buy it.

The country has a very strict attitude to inappropriate use of agricultural land, so one of the prerequisites for privatization is the presence of sound business plan for the use of the land plot only for the purpose of agricultural production.

Sweden: Individuals of foreign nationality can buy agricultural land without any restrictions, but in regions with low population it needs a special permit.

To obtain this, the applicant must have the appropriate education or experience (sometimes both together), in some cases the buyer is required to live on the land he bought.

Austria: Acquisition or receiving of agricultural land in long-term lease by a foreign citizen is possible in the case of authorization from the regional authorities. In particular, the relevant authority determineswhether or not the privatization will cause any harm to social, economic, or cultural interests.

Greece: The main constraint is permission from the Ministry of Defense if a foreign national wishes to buy land in the area adjacent to the state border. In the case of direct investment, as a rule, a permit is fast and without problems.

Tighter restrictions on agricultural land operate in the countries that have recently joined the European Union, as they had feared that after the opening of the market, farmers from developed countries would use the economic problems of local citizens and buy land cheaply.

In Estonia, there are no restrictions on the acquisition of agricultural land of less than 10 hectares. In order to buy more than 10 hectares, a citizen of any country in the European Union must be married to a citizen of Estonia, live in the country for at least three years, and be engaged in farm business.However, he has the right to buy just the land plot , which he took earlier in rent and on which he works at the time of the submission of the application for the purchase of land.

According to official information, currently foreign nationals own 19 000 hectares of land in Georgia, that is 0, 7% of the total agricultural land in the country.