Romania will limit farmland purchases by foreigners starting 2014, says agriculture minister

Non resident foreign citizens will be able to buy Romanian farmland and forestry starting 2014 according to Romania’s Treaty of Accession to the EU, but the Romanian authorities plan to set some limits, said agriculture minister Daniel Constantin, according to Mediafax.

He explained that next year Romania will take measures to prevent a phenomenon which “has frightened a lot of people”. The topic has been often debated over the past years, local farmers and many politicians arguing that Romania must find solutions to prolong the period during which it can restrict the purchase of local agricultural land by non-resident foreign citizens beyond 2014, based on the argument that local agricultural land is still very cheap compared to the rest of the EU.

The average price of a hectare of farmland was of EUR 1,900 last year while the European average reaches EUR 15,000. According to available data, some 7 percent of the Romania’s farmland is owned by foreigners through companies set up in Romania.

“At present, foreign individuals don’t own land in Romania. The land market will be liberalized starting January 2014 according to Romania’s Treaty of Accession to the EU which cannot be changed,” said Constantin.

The minister said next year an agency will be appointed – most likely the State Property Agency (Agentia Domeniilor Statului) – to act as “some sort of a player” on the land market and approve the acquisition of farmland by foreign individuals. Constantin explained other European countries have put in place measures to prevent massive farmland acquisition by foreigners, such as allowing land purchases only up to a specified maximum amount or allowing the acquisition only for individuals who have experience in the agriculture sector in that country.

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‘Thereby, considering this model, we will take certain steps to limit and ensure Romanian farmers will be competitive in comparison with other European farmers who eventually will come with a much higher capital on the Romanian market. On the other hand, we must not forget that in agriculture we need all investors. This is why I believe that we need to create a favorable environment for these investors to come and invest in Romania. The condition is that taxes be paid in Romania and profit is not taken outside the country, “said Constantin.

Simona Bazavan