Land Reforms Abroad: Polish Land Reform

Land ceilings: the Food and Agriculture Organisation of the United Nations (FAO) states: ‘States may consider land ceilings as a policy option in the context of implementing redistributive reforms.’ Although rare, land ceilings are considered as a potential policy option. There is an Urban Land Ceiling Act in India that was passed in 1976, although most Indian states have now repealed the Act. 

Denmark did have a system where any person who purchased more than 30 ha of agricultural land had to be over 18 years of age, reside on the property for at least six months, and have suitable agricultural qualifications. ¹ They could purchase up to 400 ha of land in total, but the properties had to be such that the land all fell within a 10km straight line and ownership of no more than four agricultural properties was permitted. This legislation was scaled back in 2010 amid demands to allow the advantages of economies of scale in agriculture, and to improve land value. 

Deep Dive: Polish Land Reform 

Poland’s 2016 Land Act ² includes an agricultural land ceiling of 300ha for new purchases, there is also a ban on the sale of state owned land, which was extended by another five years in 2021, and a requirement that the buyer actually farms the land for ten years following their purchase, is a ‘qualified farmer’, and has lived in the local commune for at least five years. The current arrangement is that the majority of state owned land is leased to farmers.³ These regulations were mainly in reaction to Western-European companies land-grabbing large areas of Polish land, taking advantage of the low land prices as they moved east. It is even claimed that fake buyers were used to obtain access to the limited tender system.⁴ The average Polish farm is only 8 hectares on average, with many farms non-commercial. This is all against the backdrop of restitution and the expiry of the special conditions protecting agricultural land that Eastern European countries were permitted to enforce following their accession to the EU.^5,6 

The following section is derived from a chapter Buying Land in Poland from Marcin Kręglewski of the Polish law firm Dudkowiak Kopec & Putyra⁷: 

Polish law places restrictions on transactions involving agricultural land lots of more that 0.3 ha. A key concept is that of the individual farmer. Only individual farmers can buy a significant area of agricultural land; an individual farmer being a living human being who is the owner, perpetual usufructuary, leaseholder, or autonomous possessor, of not more than 300 ha of agricultural land, with farming qualifications, living in the municipality of one the land lots making up his farm for at least five years, and running the farm within that period. 

A perpetual usufructuary refers to the holder of a long lease, that is treated in a similar way to ownership for the purpose of the legislation in question. Leases of this kind are typically between 50 and 99 years. Autonomous possessor refers to an occupier who treats the land as his own even though he may not (yet) be the legal owner; e.g. in the case of adverse possession. 

Usually only an individual farmer can buy significant land holdings. The National Support Center for Agriculture (KOWR) (Krajowy Ośrodek Wsparcia Rolnictwa) may give consent for a person who is not an individual farmer to purchase agricultural land in certain circumstances. Permission may be given where, for example, the seller cannot find an individual farmer to buy the land (insufficient interest) or where an entrant to agriculture wishes to set up or expand a family farm.

A buyer who is not and individual farmer may buy land without the permission of KOWR where the land moves between close family members, where there is a division of assets through death or divorce, bankruptcy or a merger of companies and partnerships. 

These restrictions also apply to the acquisition of a long lease (otherwise known as perpetual usufructuary) as well as freehold interest. 

In addition to these stipulations on the sale of land, there is also the opportunity for compulsory purchase by KOWR in the case of gifts, lifetime leases, distribution on termination of co-ownership following death, termination of co-ownership by a court, division, conversion or merger of companies and partnerships and auction following enforcement proceedings.

The right of compulsory purchase is ideally intended to be exercised after an intended transferee has already made an offer. The price paid by KOWR in a compulsory purchase is the price the intended transferee intended to pay. If this price is not clear then an independent valuation at market value takes place. 

Some notable circumstances where KOWR does not have the right of compulsory purchase include where the land is acquired to expand a family farm of up to 300 ha, where the transfer already has KOWRs consent, where the transferee is someone close to the transferor or is an individual farmer who inherits, or where the buyer is an agricultural cooperative or member of such a cooperative. :

In Poland there is also a statutory right of pre-emption in the case of sale of agricultural land. This right is enjoyed in the first instance by a leaseholder and then failing this secondly by KOWR. The leaseholder only holds the right of pre-emption if the land is part of the leaseholder’s family run farm and the lease has been performed for at least three years. 

The right of pre-emption does not apply where the buyer is, broadly speaking, a close family member of the seller, an individual farmer who obtained consent from KOWR to buy the land, part of local government or the state, an agricultural cooperative, or where the land is being transferred within a religious organisation.

Share transactions concerning companies which are owners or perpetual usufructuaries, where the company owns at least 5 ha of land, are also subject to restrictions such as pre-emption and compulsory purchase. 

In a similar way to compulsory purchase, the preemption process involves a conditional sale agreement between the seller and an ordinary buyer. Within a month of this conditional agreement the party with the right of pre-emption can purchase the land at the price agreed in the conditional sale agreement. The right of pre-emption is held firstly by the leaseholder, and failing their interest, by KOWR. If the pre-emptive rights are unused, then a transfer agreement is signed and the land is transferred to the ordinary buyer. 

This is distinguished from Scottish legislation in the form of the Agricultural Holdings (Scotland) Act 2003. In Scotland the pre-emptive rights work on the basis of the owner and the tenant exercising the right of pre-emption agreeing upon a price as the initial step, or, failing this approach, an independent valuation providing the figure for sale. 

In review: Polish land law includes a land ceiling of 300ha, however, this is not a restriction on the size of existing land holdings, rather it defines, mainly, individual farmers as the only legal persons who can buy significant amounts of land, typically restricting their purchases up to a total landholding of 300 ha. There are also powers of compulsory purchase and pre-emption in the cases of transfer and sale respectively, with a number of exceptions to account for transfers between close family, or situations where KOWR has already given explicit permission for the transfer or sale to go through. 

It is important to consider that the above are restrictions. They restrict the sale and transfer of land, arguably they could be said not to primarily affect the ownership of land. The restrictions prevent purchases which lead to an ownership of more than 300 ha, they do not in any way cut up holdings that already comprise more than 300 ha unless they are sold. Reforms which redistribute land in a more direct manner would be met with legal challenge as they would overtly interfere with the right to enjoyment of property protected by the ECHR. 

Some minor amendments were made to the above Polish legislation in 2019.⁸ In particular the area parameters on which the restrictions are directed were changed slightly, and the restrictions were lifted or softened in areas close to cities. 

See next: Scottish Land Reform in 2022 – Consultation Paper: Land Reform in a Net Zero Nation – The Latest in Scottish Land Reform

Statute: 

Organisations: 

The Polish National Support Center for Agriculture (KOWR) (Krajowy Ośrodek Wsparcia Rolnictwa) 

References:

1. Unknown. Property formation in the nordic countries. https://gst.dk/media/6608/propertyformationinthenordiccountries.pdf. Updated n.d.

2. Ministerie van Landbouw, Natuur en Voedselkwaliteit. Changes legislation regarding purchase of agricultural land in poland. https://www.agroberichtenbuitenland.nl/landeninformatie/polen/achtergrond/landbouwgrond/changes-regarding-lease-of-agricultural-land-in-poland. Updated n.d.

3. REDAKCJA1. Extension of the ban on the sale of state-owned agricultural land. https://www.gospodarz.pl/aktualnosci/przedluzenie-zakazu-sprzedazy-panstwowej-ziemi-rolnej.html. Updated 2021.

4. Lopata J. Land issues and land struggles in poland. https://www.tni.org/files/download/13._poland.pdf. Updated n.d.

5. European Commission. Frequently asked questions: Extension of transitional periods for the acquisition of agricultural land. https://ec.europa.eu/commission/presscorner/detail/en/MEMO_11_244. Updated 2011.

6. European Parliament. Free movement of capital. https://www.europarl.europa.eu/RegData/etudes/fiches_techniques/2013/030106/04A_FT(2013)030106_EN.pdf. Updated 2022.

7. Kręglewski M. Buying land in poland. https://www.dudkowiak.com/property-purchase-in-poland/buying-agricultural-land/. Updated n.d.

8. Pietuszko M, Szymański P. Fewer restrictions on the acquisition of agricultural land. https://www.dlapiper.com/en/us/insights/publications/2019/07/real-estate-gazette-35/fewer-restrictions-on-the-acquisition-of-agricultural-land/. Updated 2019.

9. Gierałtowicz J. Act on shaping the agricultural system in poland. https://www.repozytorium.uni.wroc.pl/dlibra/publication/131350/edition/123612/content. Updated 2020.

Bibliography: 

Kocur-Bera, K. 2016, , Determinants of agricultural land price in Poland – a case study covering a part of the Euroregion Baltic. Available: https://www.cahiersagricultures.fr/articles/cagri/full_html/2016/02/cagri160021/cagri160021.html.

van Calster, G. 2022, , AVC Law – Geert van Calster . Available: https://gavclaw.com/mini-me-short-bio-and-recent-practice-instructions/.

Wyższa Szkoła Kształcenia Zawodowego 2022, , Zasady zakupu ziemi rolnej – czy każdy może ją nabyć?. Available: https://studia-online.pl/aktualnosci/zasady-zakupu-ziemi-rolnej-czy-kazdy-moze-ja-nabyc/.