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Ādaži , 10. March 2014 Kis Miklós , HCA

Sustainable Use of Agriculture Land & Hungarian Land LAW. Ādaži , 10. March 2014 Kis Miklós , HCA. 1. Land as a natural resource. 26 % of the total national assets Land can ’t be extended! 7.5 million hectares of crop land Ag ricultural area is 5.5 million hectares .

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Ādaži , 10. March 2014 Kis Miklós , HCA

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  1. Sustainable Use of Agriculture Land & Hungarian Land LAW Ādaži, 10. March 2014 Kis Miklós , HCA

  2. 1. Land as a natural resource • 26% of the total national assets • Landcan’tbe extended! • 7.5 million hectares of cropland • Agriculturalarea is 5.5 million hectares. • Plough-land is 4.5 million hectares.

  3. 2. Ownershipstructure

  4. Ownershipstructure • Averagesize of the parcels is 2.2 hectares • 2.8 million (natural) persons own 6 million hectares of land (agricultural land + forest) • 1.8 million owners lease out their lands

  5. Ownershipstructure • The holding structure of the Hungarian agriculture is of a dual nature - small number of large holdings with large areas - small farms with smaller areas based on the direct work performance by family members lack of medium-sized, familyownedfarms NEW LAND LAW

  6. 3. Main features of the law • family farms are the primary object • reduce the shareof larger holdings(80%-20%) without their liquidation What is regulatedby the new law? The acquisition (ownershipand rights of use)of the land

  7. 4. Toolsof the new law I. makingthe acquisition of land ownership and rights of use subject to official authorisation, with the local land committee’s right of veto in the case of the acquisition of ownership II. farmer status – professional farming III. obligation of personal cultivation – exclusion of speculative land acquisition (for capital income purposes) IV. the order of sequence of pre-emption and pre-tenure rights V. maximisation of land acquisition and farm size

  8. 5. Whocanbuyland? • natural persons, but not by legalpersonsorentitieswithoutlegalpersonality • from among natural persons any person qualified as a farmerWho is a farmer? A natural person who a) is a Hungarian citizen or a citizen of any EU Member State b) has been registered in Hungary, c) has professional qualifications in agriculture or forestry or, lacking such, has been certifiably performing suchan activity for at least 3 years • Land use rights can be acquired both by natural and legal persons and entities without legal personality (lease, land use by other titles).

  9. 6. Who cannot acquire land? • Total ban on land acquisition (both ownership and right of use) for: - foreign natural persons - foreign legal persons

  10. 7. How much land can be acquired? • Natural person 1200 hectares of land of which 300 hectares can be in his ownership • Legal person 1200 hectares of land, the maximum size can be exceeded up to 1800 hectares: - in the case of animal husbandry (2 ha/AU) - seed production (at least 10% of the arable land) - by an area leased from a member of the l.p.

  11. 8. Disclosure of sales contracts and the requirement to obtain an authorisation • Salescontractsneedto be disclosured • Approvalbythe administrativeorgan of agriculture • paper-based documents with specified security prerequisites(„pocketcontracts”…)

  12. 9. Rights of pre-emption • The right of pre-emption does not apply in the case of a) buying and selling between close relatives, b) buying and selling between co-owners

  13. Rightsof pre-emption If land is sold the following will have the right of pre-emption in the following order: a) the Hungarian State b)a lokalfarmer using the land c) a lokal farmer (1.: neighbourto the land2.: resident3.:closerthan 20 km) d) a farmer The farmer specified in point c) is preceded in the order of people entitled to pre-emption by the farmer who has operated a livestock farm in the settlement where the land is situated, for at least 1 year prior to the exercising of his right of pre-emption, and the purpose of his acquisition of ownership is to ensure feed production necessary for animal keeping.

  14. Rights of pre-emption • Within a group of people of the same entitlement: • a) family farmer and a member of the farming family, • b) young farmer, • c) beginner farmer. If the order still cannot be decided then the seller will choose.

  15. 10. The formation of local land committees • The local land committee has the right of veto: If the local land committee does not support the application for acquisition by a given person then the land registryis obliged to refuse the application! • Electedby the farming community consisting of farmers using/owningland locally • The number of its members is 3 to 9 persons • The farming community elects the local land committee for a period of 5years.

  16. Finally, a picturefrommycountryside…

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