State Agricultural Land a Hot Topic Ahead of Announced Amendments to the Law

For the second quarter of this year, amendments to the Law on Agricultural Land have been announced, with the stated goals of land consolidation and increased production, which the professional public welcomes while warning of numerous shortcomings of the current law that often does not serve the advancement of agriculture.

The issue of managing state agricultural land has been a hot agricultural topic for years, often causing controversies and tensions. Almost never is everyone satisfied, and there are always those who feel unjustly excluded, pointing fingers at local administrations and accusing them of favoritism based on political or even familial ties.

The President of the Croatian Chamber of Agriculture (HPK), Mladen Jakopović, says that the Chamber has been seeking changes to the Law on Agricultural Land for more than two years, as the current one is not functional and is detrimental to domestic production.

From the Government, HPK demands urgent amendments to the law, and if necessary, a halt to its application by decree and the suspension of all tenders until the law is changed.

It is totally unacceptable, they say in HPK, that one unit of local self-government (JLS) has a limited land maximum of 12 hectares, while another has a thousand or two thousand hectares. In this way, it is not possible to achieve the goals of the strategic plan, and it has an extremely negative impact on the development of certain JLSs and their agricultural holdings, extinguishing many stable economies, they say in HPK.

They believe that the amendments to the law should determine the actual state of agricultural land – within and outside the system, announce tenders for free and neglected land (sales are also desirable), enable the extension of contracts for existing holders whose primary activity is agriculture, and who have respected contracts and economic programs, and determine the maximum amount of hectares that can be purchased/leased according to clearly agreed categories.

Kuskunović: Eliminate Subsidy Hunters

Agricultural analyst Miroslav Kuskunović believes that the new law should prevent a potential ‘war’ among all those who want to acquire land through dubious tenders.

The focus, he says, should be on production, agricultural development, and employment, while strict criteria should eliminate ‘subsidy hunters’ and those operating in the black zone on state land.

– The current Law on Agricultural Land, since its enactment in 2018, has shown numerous contradictions with the goals of increased food production. It further fragments production-technological units and destroys competitive agricultural-economic units of farms that have long been consolidated and arranged, often brought into production after neglected areas have been cleared – says Kuskunović.

In Croatia, as he noted, as much as 70 percent of farmers use less than five hectares, while the average farm size in the EU is 17 hectares. According to the economic value of the economy, we are at 35.3 percent of the EU average, says Kuskunović, noting that agricultural holdings in countries with larger average agricultural areas generally achieve significantly higher economic value of production and productivity.

He believes that the current law, which leads to further fragmentation of parcels, should therefore be amended, and sustainable production-technical units should be established that will be leased to proven agricultural producers who have successful production, pay taxes, participate in the agricultural product market, and have technology for land processing.

– Initiating a broad public discussion and urgently amending the law is a great opportunity for Minister of Agriculture Josip Dabro, because if he considers those advocating for greater production and development, job preservation, investments, and not creating new groups of subsidy hunters through new tenders, he may be able to make a breakthrough in production – says Kuskunović.

HGK: Insist on Productivity and Competitiveness

The Vice President of HGK for Agriculture and Tourism Dragan Kovačević believes it is important for the Ministry to insist on two key principles – productivity and competitiveness when determining tender criteria.

He expects representatives of the HGK Agriculture Association to be included in the drafting of the proposal for the new law or amendments to the existing one, that the law-making process be transparent, and that the final proposal for the law undergo public discussion, which was not the case with the last amendments and supplements.

Kovačević believes that the very announcement of the amendment to the law indicates that the existing one is not in line with the Strategic Plan of the Common Agricultural Policy and long-term goals, especially increasing productivity and competitiveness, which the HGK Agriculture Association has repeatedly warned about.

– The existing Law on State Agricultural Land is contrary to the strategic goals we have set for ourselves, which is best evidenced by the fact that last year the value of agricultural production fell by 240 million euros, and we recorded the historically largest foreign trade deficit in the exchange of agricultural and food products, with the need to emphasize that extremely negative trends continue this year – he said.

On one hand, we are adopting a Law on Consolidation, whose key goal is efficiency and rationalization of production, while on the other hand, we have a law that encourages the fragmentation of large agricultural areas that have been transformed into production-technical units through long-term investment, said Kovačević.

The existing law has given local self-government the discretion to determine the land maximum when announcing tenders, without clearly prescribed criteria, which can be used for daily political purposes to buy votes from voters or councilors, said Kovačević.

He states that Croatia uses 1.45 million hectares of land for agricultural production, of which arable land accounts for 64 percent. Approximately one-third or 300 thousand hectares of arable land is owned by the state, which manages it through local self-government units.

– Given that 85 percent of direct production-related support financed from the Common Agricultural Policy is tied to agricultural areas, i.e., that it is paid per hectare, and that managing state agricultural land is one of the key tools for implementing agricultural policy, it is important for the Ministry to insist on two key principles – productivity and competitiveness – emphasizes Kovačević.

HUP also Calls for Order in State Agricultural Land Leases

The HUP Association of the Food Industry and Agriculture has also recently called for order in the leasing of state agricultural land.

Among other things, they propose that the use of state agricultural land and applications for lease tenders be denied to all agricultural producers who cannot prove legitimate agricultural production on their land registered in ARKOD for the last five years through invoices.

They also propose changing the ratio of production and non-production points with the aim of increasing agricultural production, amending the provision on the maximum area so that the maximum area is prescribed in such a way that the user can obtain a maximum of 100 percent of the area they have registered in ARKOD.

Among the proposals is also a change in fulfilling the criteria of the ratio of conditional livestock and land area for dairy farmers/livestock breeders and a more effective and accurate assessment of the success of dairy farmers/livestock breeders, as well as extending contracts for the temporary use of agricultural land with clear proof of agricultural production on areas under temporary contracts while mandatorily retaining the rental price from the temporary use contract.