The amendment of the Act on the formation of the agricultural system awaits the signature of the President. The proposed changes create the appearance of a free trade in agricultural properties.
Act dated 14 April 2016 on the suspension of the sale of the property of the Agricultural Property Resource of the Treasury and on the amendment of certain laws (Journal of Laws of 2018, item 869) In the Act dated 11 April 2003 a number of changes in the formation of the agricultural system (hereinafter referred to as ‘U.k.u.r.’) have been made.
A certain alternative may be the admissibility of non-farmers to acquire individual agricultural properties in the course of enforcement and bankruptcy proceedings, but the business rationality of such a solution may raise doubts in the practice of trading
The legislature has set itself the objective of protecting agricultural land against speculative buy-out and ensuring that agricultural properties are purchased for agricultural purposes. two years after the entry into force of the changes, the legislator, citing social expectations and needs, decided to mitigate the introduced rigors, primarily announcing facilitating trade in agricultural properties with less than 1 ha.
The expression of this effort is Act dated 26 April 2019 amending the Act on the formation of the agricultural system and certain other acts adopted 9 May 2019 by the Senate without amendments and on 10 May 2019 handed over to the President for signature.
So far rules on the acquisition of agricultural property
First, it must be indicated that agricultural properties less than 0.3 ha to which the Article 1a(1) point (b) the provisions of the Act are not applicable, they are not subject to the rigors of statutory regulation at all, and therefore the acquisition of such property is not subject to specific rules and is subject to free circulation.
On the other hand, in the current version of the U.K.U.r., as well as after the amendment, the rule is that the purchaser of agricultural property may be only an individual farmer, unless the law provides otherwise (Article 2a(1) U.k.u.r.)
This principle applies with certain restrictions, since according to Article 2a(3) The legislator pointed out certain exceptions. These exemptions are both subjective and factual in nature, stating that the restrictions indicated under Article 2a(1) and 2 do not concern the acquisition of agricultural property by, inter alia, a close person of the seller or a local government unit.
The agricultural property could therefore be acquired on a free circulation basis only if its area was less than or equal to 0.3 ha. In other cases, only an individual farmer or a non-farmer could acquire an agricultural property in the event of fulfilment one from statutory exemptions.
Non-farmer acquires agricultural property less than 1 ha
citing social expectations and needs, the legislator has decided to mitigate the introduced rigours concerning agricultural property trading. Based on the new content Article 2a(3)(1a) u.k.u.r restrictions resulting from regulations Article 2a(1)(2) (according to which only an individual farmer may be acquired) will not be used for the acquisition of agricultural property with an area less than 1 ha.
As a consequence, the list of persons with the possibility of acquiring agricultural property will be extended to non-individual farmers, provided that only agricultural property with less than 1 ha.
Acquire without permission from the NCO, but pay attention to the original purchase
Although the legislator has decided to allow non-farmers individual acquisition of agricultural property with an area greater than 0.3 ha, but less than one hectare, it shall continue to apply to such immovable property the provisions of the Act and the marketing of such agricultural property shall be subject to all the rigors of the Act, unless otherwise provided.
The content remains unchanged. Article 1a(1) point (b), excluding agricultural property with a certain area from the rule of law, which will not change. By Article 1a(1) point (b), the provisions of the Act still do not apply only to agricultural properties with less than 0.3 ha.
As a result, it should be remembered that the National Centre for Agriculture Support retains the right to pre-emption for the State Treasury, established under Article 3(4) u.k.u.r. in respect of the acquisition of immovable property less than 1 ha, for the law under Article 3(5) does not provide for the exclusion of the right to pre-empt a property with the above parameters.
However, since agricultural properties with less than 1 ha are subject one of specific exemptions under Article 2a(3) u.k.u.r., it is not necessary to approve the Director-General of the National Centre for Agricultural Support expressed by an administrative decision for their acquisition.
Once again, it needs to be stressed that the legislature has only allowed a wider circle of people to acquire agricultural property, allowing non-farmers to acquire properties with a larger area than 0.3 Ha, but not more than 1 ha.
Deluded liberalisation of agricultural property trading
From the perspective of non-individual farmers, it should be borne in mind that the forthcoming amendment only makes the sale of agricultural property appear to be released.
Although the legislature allows a wider circle of persons to acquire agricultural property, allowing non-farmers to acquire properties with an area greater than 0.3 Ha, but not more than 1 ha, these properties continue to be subject to all the rigors in the Act on the formation of the agricultural system.
Although it will not be necessary to obtain the approval of the Director of the National Agricultural Support Centre for the acquisition of the properties with these parameters, the NAWR will continue to be able to exercise the right of pre-emption for the Treasury.
It is also difficult to expect increased activity in the agricultural property market or to recognise as free circulation the legal status in which the purchaser of the agricultural property is obliged to operate an agricultural holding consisting of the acquired agricultural property for at least a period of time 5 years from the date on which he acquired the property and, in the case of a natural person, to run the holding in person, and during that period, the acquired property may not be disposed of or held by other entities.
An alternative may be to allow non-farmers to acquire individual agricultural property in the course of enforcement and bankruptcy proceedings, but the business rationality of such a solution may raise doubts in the practice of trading.
Author:
Michał Skwarek - Council applicant in the legal department Russell Bedford Poland. Graduated from the Faculty of Law and Administration of the University of Warsaw.