Polish land rule changes benefit UK producers

14 December 2001




Polish land rule changes benefit UK producers

By Simon Wragg

UK producers with a vested interest in farming in Poland look set to benefit from a rethink on proposals governing ownership of farmland.

Poland, which hopes to become an EU member state in 2004, had been pursuing a derogation preventing foreign investors buying farmland for the first 18 years of membership.

But a change of government has reopened the debate on land ownership, says Adam Oliver of Brown & Cos Poland office.

"If the most radical proposals reported in local media were adopted, UK businesses farming in Poland under rental or lease agreements before EU membership may be able to purchase freehold title within two to three years of accession," says Mr Oliver.

Some negotiations have already begun. After government elections last September, Polish officials offered to cut the bar on overseas investors to freehold title from 18 years to 12 years, in exchange for freer movement of workers to neighbouring member states.

"Since these proposals have come from within the new government itself, it could be reasonable to assume that a rethink is taking place," says Mr Oliver.

"Land ownership is a sensitive issue given Polands history and the fact that 28% of the population work directly in agriculture. Overseas investment is welcomed by the government, but it wants to see their own nationals compete for farmland which is valued at only 10-15% of the EU average."

One UK farmer in Poland welcomes the first sign of a rethink. Gerald Rivett, who farms 340ha (840 acres) at Grojec, south of Warsaw, says removing barriers to freehold title will allow UK producers to invest with confidence.

"We are currently caught in a trap. Most lease agreements are given for 10 years and have no compensation for tenant improvements. In latter years of an agreement, the risk of not getting a return on the capital increases, which is a major concern.

"Unless UK producers can realistically expect to obtain the freehold title, capital improvements could dry up," he says.

Although no official proposal has been put forward, Mr Rivett is optimistic that reform will take place. "The closer Poland comes towards EU membership the greater the pace of change will be. We can expect to hear more news on the land debate early next year.

"There is an attractive future for farming in Poland given the right political will. We are currently getting 19p/litre for milk and milling wheat sells for £95/t, while some input costs are much lower than in the UK," says Mr Rivett.

"I would like to continue farming here – it has the potential to be a world leader. But, if bars to freehold title remain in place, the only option for UK producers is to marry a Polish girl who could acquire the title," he says.

"In many cases that is not as bad as it sounds." &#42

Fertile ground… Potential changes to land ownership rules in Poland will benefit UK producers, allowing them to invest with confidence.


See more