9 July 1999

More Hungarian farms hit market

A SECOND wave of farms is coming to market in Hungary, providing fresh opportunities for Western farmers, Henry Wilkes of FPD-Savills told a Royal Show seminar.

"It is a myth that there are no farms available," he said. There were plenty of units which Hungarian nationals and firms bought soon after the end of communism, which they now found hard to farm profitably. Foreigners were prevented from owning land in Hungary, he said, but renting was commonplace. Leases typically lasted 5-10 years, averaging £25/ha (£10/acre) on state farms and £37/ha (£15/acre) on private holdings. These leases often incorporated "options to purchase" when Hungary joins the EU, providing opportunities for significant capital gains. Plenty of encouragement to foreign investors was available from the government, including 30% investment grants and tax allowances of up to 100%, Hungarian official Julia Nyers told the seminar.

But Dr Nyers warned that the Hungarian government was negotiating a 10-year derogation when it joins the EU, to continue blocking foreigners from owning land. &#42