Confusion down on the farm
"The basis for the agricultural system of the State shall be the family farm..."
Art. 23 of the Polish Constitution
Citing these words, the government recently submitted to the Sejm a new draft bill designed to severely restrict the sale of farmland, otherwise referred to as the Agricultural Market Act. Actually, the Sejm is currently reviewing three different bills designed to restrict the sale of farmland, with the other two having been submitted by members of the Sejm on behalf of the PSL and PiS. All three drafts have one common element; to impose significant ownership and lease restrictions on agricultural property, including the introduction of educational and residency requirements and the establishment of size limitations designed to prevent the accumulation of land by an individual or corporation.
The government's proposal would impose a 300-hectare maximum limit on the amount of farmland that any one individual or corporation could own. Even more restrictive, the draft submitted by the PSL would limit the amount of farmland owned by one person or corporation to as little as 100 hectares, depending on the region of the country. To make matters worse, the PSL's draft provides for the imposition of even smaller size restrictions if the individual voivodship so decides. Instead of protecting the family farmer from the "evil of factory farming" as claimed by those who drew them up, these proposed drafts will have the opposite effect, by punishing success and discouraging investment, not to mention placing Polish farmers at a competitive disadvantage to their European Union counterparts. The version submitted by PiS does not impose any size limitations. Perhaps the drafters overlooked Article 20 of the Constitution, which states: "a social market economy, based on the freedom of economic activity and private ownership... shall be the basis of the economic system of the Republic of Poland."
The second restriction imposed by all of these drafts requires the purchaser of a farm to meet certain educational requirements, regardless of whether the purchaser is an individual or a company. Under each of these drafts an individual would have to prove that he or she has either a graduate degree in agriculture or at least five years of practical farming experience. A company, depending on which draft is adopted, will have to satisfy the same educational requirements as an individual. How can a company satisfy these educational requirements? Simple; the drafts submitted by the government and PiS would require that at least 50% of the company's shareholders have a degree in agriculture. Think that's a tough hurdle to reach? Not compared to the draft presented by the PSL. Their version would require 100% of the company's shareholders to satisfy the education requirements. What does this mean? Simply put, any company that I own stock in will not be able to invest in the agricultural sector because I went to law school, not farming school. In this case I think Article 32(2) of the Constitution is applicable: "No one shall be discriminated against in political, social or economic life for any reason whatsoever."
The third major restriction imposed by these drafts requires the purchaser of a farm to actually live on or near the property. The government's draft would require an individual purchaser to personally manage the farm and live on or near it during the entire period of ownership, in effect precluding any possibility of owning more than one farm. A company too would have to satisfy this residency requirement, by which at least 50% of its shareholders would have to live on or near the farm. The draft submitted by the PSL would require an individual owner to live on or near the farm for at least the first 10 years of ownership. And as for companies, let's just say that the PSL does not like corporations. Under their draft a company would have to locate its corporate headquarters on or near the farm, together with each and every shareholder. So much for promoting investment in agriculture... Perhaps the drafters overlooked Article 52 of the Constitution? "The freedom of movement as well as the choice of residence and travel within the territory of Poland shall be ensured to everyone."
Each of these drafts contains many more restrictions, which I simply do not have room to explain in this article. Suffice to say, I hope these drafts never see the light of day, at least not in their current form. In trying to protect the "family farm", the drafters seem to have neglected the rest of the Constitution, not to mention European Union law, which guarantees the free movement of goods, services, people and capital.
Paul Fogo is a senior attorney with the law firm of Miller, Canfield, Paddock & Stone.
Art. 23 of the Polish Constitution
Citing these words, the government recently submitted to the Sejm a new draft bill designed to severely restrict the sale of farmland, otherwise referred to as the Agricultural Market Act. Actually, the Sejm is currently reviewing three different bills designed to restrict the sale of farmland, with the other two having been submitted by members of the Sejm on behalf of the PSL and PiS. All three drafts have one common element; to impose significant ownership and lease restrictions on agricultural property, including the introduction of educational and residency requirements and the establishment of size limitations designed to prevent the accumulation of land by an individual or corporation.
The government's proposal would impose a 300-hectare maximum limit on the amount of farmland that any one individual or corporation could own. Even more restrictive, the draft submitted by the PSL would limit the amount of farmland owned by one person or corporation to as little as 100 hectares, depending on the region of the country. To make matters worse, the PSL's draft provides for the imposition of even smaller size restrictions if the individual voivodship so decides. Instead of protecting the family farmer from the "evil of factory farming" as claimed by those who drew them up, these proposed drafts will have the opposite effect, by punishing success and discouraging investment, not to mention placing Polish farmers at a competitive disadvantage to their European Union counterparts. The version submitted by PiS does not impose any size limitations. Perhaps the drafters overlooked Article 20 of the Constitution, which states: "a social market economy, based on the freedom of economic activity and private ownership... shall be the basis of the economic system of the Republic of Poland."
The second restriction imposed by all of these drafts requires the purchaser of a farm to meet certain educational requirements, regardless of whether the purchaser is an individual or a company. Under each of these drafts an individual would have to prove that he or she has either a graduate degree in agriculture or at least five years of practical farming experience. A company, depending on which draft is adopted, will have to satisfy the same educational requirements as an individual. How can a company satisfy these educational requirements? Simple; the drafts submitted by the government and PiS would require that at least 50% of the company's shareholders have a degree in agriculture. Think that's a tough hurdle to reach? Not compared to the draft presented by the PSL. Their version would require 100% of the company's shareholders to satisfy the education requirements. What does this mean? Simply put, any company that I own stock in will not be able to invest in the agricultural sector because I went to law school, not farming school. In this case I think Article 32(2) of the Constitution is applicable: "No one shall be discriminated against in political, social or economic life for any reason whatsoever."
The third major restriction imposed by these drafts requires the purchaser of a farm to actually live on or near the property. The government's draft would require an individual purchaser to personally manage the farm and live on or near it during the entire period of ownership, in effect precluding any possibility of owning more than one farm. A company too would have to satisfy this residency requirement, by which at least 50% of its shareholders would have to live on or near the farm. The draft submitted by the PSL would require an individual owner to live on or near the farm for at least the first 10 years of ownership. And as for companies, let's just say that the PSL does not like corporations. Under their draft a company would have to locate its corporate headquarters on or near the farm, together with each and every shareholder. So much for promoting investment in agriculture... Perhaps the drafters overlooked Article 52 of the Constitution? "The freedom of movement as well as the choice of residence and travel within the territory of Poland shall be ensured to everyone."
Each of these drafts contains many more restrictions, which I simply do not have room to explain in this article. Suffice to say, I hope these drafts never see the light of day, at least not in their current form. In trying to protect the "family farm", the drafters seem to have neglected the rest of the Constitution, not to mention European Union law, which guarantees the free movement of goods, services, people and capital.
Paul Fogo is a senior attorney with the law firm of Miller, Canfield, Paddock & Stone.
