The Slovak agricultural sector after May 1st 2014, a move forward?

“Produced in Slovakia”

When Slovakia joined the EU in 2003, the country was granted a transitional period until 30 April 2011. During this period it was prohibited for natural and legal persons from other EU member states to directly acquire agricultural land. The main reasons for the transition period were:

  • To enable Slovakia to fully prepare for liberalisation of the market and to implement measures such as credit and insurance facilities for farmers and to complete the agricultural reforms;
  • To safeguard the socio economic conditions of the agricultural sector following the transition to the common agricultural policy in Slovakia;
  • To ease the process of restitution and privatisation of agricultural land.

In the decision of the European Commission from April 2003, it was granted that this transition period could be prolonged once with 3 years. This prolongation started on 30 April 2011 and now expires on May 1st 2014. This means that, as of that date, also natural and legal persons from other EU member states should be able to buy agricultural land in Slovakia under the same conditions as Slovaks are. For neighbouring country Czech Republic this possibility already exists since May 2011.

However, the question is what will happen next? Will Slovakia really follow its neighbouring country Czech Republic as an open EU member and choose a way forward to develop and strengthen its agricultural sector, or will it follow countries such as Hungary, that have put new legislation in place making it impossible for foreign farmers and foreign investors to start new agricultural activities, including the acquisition of agricultural land. In 2013 some initiative was taken by the current Slovak government to change the legislation after May 1st 2014 in such way that it would restrict foreign farmers and investors to start activities and invest in the agricultural sector in Slovakia. Because of the presidential elections, that were held in March 2014 and strong indications that the proposed changes were in conflict with the Slovak constitution, implementation of the new legislation was halted. At this moment it seems that the Slovak government will follow the same pro-active approach as the Czech Republic did in 2011 and that it is committed in further strengthening its agricultural sector.

Often nationalistic sentiments opposes the possibility for foreign farmers and investors to start new activities and buy agricultural land (as if foreigners would buy the land and move it to their home countries or “steal” it from locals). In general, an open agricultural sector attracts investments and skilled people that will stimulate innovations and productivity, resulting in more jobs, production improvements, exports and better performing agricultural companies. A good example is the Netherlands, where the agricultural sector is completely open for foreigners and people from outside the sector. Because of its open structure, the agricultural sector in the Netherlands is one of the most productive, innovative and best performing sectors in the world. It has a very high output and produces sophisticated products with high added value. According the United Nations , in the Netherlands, which has the same size as Slovakia, yields of the main crops (potatoes, sugar beets, cereals and flowers) and from dairy production are among the highest in the world. In monetary terms, the Netherlands ranks second, behind the United States as net exporter of agricultural products in the world.

In time, also Slovakia could become one of the key agricultural players in Europe. The open structure of the sector after May 1st 2014, will for example stimulate the development of new dairy and pig farms, speed up the progress of attracting new and younger farmers and will more easily bring in the necessary cash for renovation of yards and agricultural buildings, speeding up the land-consolidation process and building and renovating irrigation systems. (Climate heating and dry seasons are also starting to take its toll, especially in the fertile southern part of the country). Opening its agricultural sector will enable Slovakia to diversify its agriculture from large monoculture crops like wheat, corn and rape towards more advanced produce such as a wide range of vegetables, potatoes, flowers and grapes.

Slovakia is, as the Czech Republic, one of the front runners of the new European States with a pro-active approach focussing on European Markets. With opening up its agricultural sector as of May 1st 2014, it could further move forward in Europe and Slovaks will be able to buy a more varied and higher quality pallets of agricultural products with the specification “Produced in Slovakia”.

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