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| Price of Bulgarian farmland doubles in 5 years |
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The price of Bulgarian farmland doubled in 5 years, although some restrictions were imposed on foreign buyers, Eurostat announced. Foreign nationals are able to purchase Bulgarian farmland if they reside in this country for at least 5 years. What does the sharp increase in the price of the Bulgarian farmland mean? Is it due to an upsurge in the country’s agriculture, on speculative price hike or increased investment interest? According to experts, all of the above have contributed to the rapid increase of the farmland’s price in the recent years.
Bulgaria’s agriculture went through a series of difficult changes and reforms linked with the return of the expropriated land to its real owners, which was nationalized during the communist regime. Thus, millions of Bulgarian citizens became owners of agricultural plots and many of them did not know what to do with it. Some of them decided to sell their farmland, others rented their land. Currently, nearly 20% of the active Bulgarians are working in private farms and due to their labor in 2016 the country’s agriculture field grew with the highest percentage as compared with other sectors of the national economy (4.3%). As a result, the price of the Bulgarian farmland rose significantly.
The arable land in Bulgaria is nearly 3.5 million hectares. It is used mainly for cultivation of cereals and oilseeds, and much lesser areas are used for the cultivation of fruit and vegetables. The farmland in the northeastern part of Bulgaria is perfect for cultivation of cereals. That is why the Dobrudzha region is also known as Bulgaria’s granary. For that reason, the price of farmland in this region is highest - EUR 6,000 per hectare. The average price of farmland in Bulgaria is EUR 3,937 per hectare, whereas five years ago it cost only EUR 2,112 per hectare. Despite the significant increase of the farmland’s price, the cheapest farmland in the whole EU can be still found in this country - EUR 1,166 per hectare.
Why investors buy farmland? We must note that being a fundamental and limited natural value farmland is special for each independent country and farmland deals are accompanied with special sensitivity in terms of patriotism, national security and other geopolitical considerations. Thus, some new restrictions related to the purchase of Bulgarian farmland by foreign nationals were imposed in 2014. According to these legislative amendments, foreign citizens can buy Bulgarian farmland if they reside in this country for 5 consecutive years. However, each powerful foreign investor interested in purchasing Bulgarian farmland can buy a Bulgarian company existing for at least five years and later buy the necessary farmland. Some big western companies and investment funds already did that and bought farmland in North Bulgaria.
Bulgaria is among the countries with excellent geographical, climatic and other natural conditions. This country is a world leader in lavender production and among the countries with highest production of oil yielding rose. Let us remind that the Bulgarian farmers can also rely on EU subsidies per hectare. Although 75% of the Bulgarian population is now urban, many people know the subtleties of agriculture and continue to produce their own food in the rural areas. In other words, the potential of the Bulgarian agriculture has not been exhausted. It has a good future and the substantial increase in the prices of farmland in the recent years proved that. This trend is likely to continue, because the price of Bulgarian farmland is still much lower than the European average and far from the price of land in the Netherlands for instance where a hectare of farmland costs EUR 63,000. |
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Source:
bnr.bg
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| Monday, Mar 26, 2018 |
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