Rural land prices to stay well below EU averages

Poland and the European Union are set to officially close negotiations on the controversial land purchase issue on March 21 but landowners who expected that property prices to soar to EU levels should shelve their hopes for years to come, according to agriculture sector experts. EU nationals who have leased Polish land since 2001 or earlier will be able to buy it as soon as Jan. 1, 2004, according to a Poland-EU agreement reached last week. But non-farmers will not be allowed to buy land until 12 years after accession and European farmers show too little enthusiasm about Polish soil to push up the price. "Now that it will be possible to rent land and then buy it, there will be some growth, but the price won't even double," said Agnieszka Alińska, who monitors prices in Poland and the EU at the Institute of Agriculture and Food Economics (IERiGŻ). "The rise will not be so high as to reach EU price levels as farmers would wish." While the price of land in Poland averaged zł. 2,628 per hectare in 2000, the European standard was some zł. 40,000, according to Alińska.

The Polish land price hasn't moved for years, despite the approaching EU accession. "Prices haven't changed because there is no demand, as farmers have no money," said Elwira Laskowska, a land valuation expert at the Warsaw Agricultural University (SGGW). Chris Schmitz, a German farmer who rents 500 hectares near southwestern Jelenia Góra and pays annual rent of zł. 3,000-zł. 4,000 to the state treasury, said land in Poland is several times cheaper than in Saxony but farmers in Germany receive much more state aid. "In Germany, a farmer gets some DM 1,000 ($455) in subsidies per hectare while in Poland they get nothing," Schmitz said. "Many people here ask me to find a German who'd like to buy their land but it's not enough that the land is cheap. You also need good conditions." Schmitz's 500 hectares are part of 124,000 hectares that the state treasury lets to foreign nationals, accounting for less than 0.01% of all agricultural land in Poland. The common belief in Poland that European farmers are waiting to buy out Polish land is highly exaggerated, according to Dorota Metera, agricultural expert at the World Conservation Union (IUCN). "It is only the German, Dutch and some Danish farmers who may be interested in Polish land, because they can produce in Poland and sell in Germany, due to the geographic proximity," Metera said. "There are some 400,000 farmers in Germany, of which 1% at the most may consider moving to Poland, so their influence on land prices in Poland will be minuscule."

Companies that focus on non-agricultural enterprises could be interested in a long-term investment in Polish land but they won't be allowed to buy until 2015, Alińska said. Guenter Verheugen, the EU commissioner for enlargement, last week said that Poland's latest proposals on land acquisition by EU nationals are acceptable. Both sides should be able to close the negotiation chapter on free movement of capital during the next official session of talks on March 21-22. The accord was possible after Poland agreed that the three-to-seven-year period runs from the moment the land was first rented, and not, as Poland earlier insisted, from the accession date.