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EU: Leading Candidates Press For New Deals On Farmland

Ten of the 12 European Union candidate countries are racing to conclude accession talks by the end of this year, but some have signaled they want to renegotiate deals on the sale of farmland to foreigners. Countries such as Poland and Hungary won transition periods restricting foreign land purchases for several years after joining the EU. Others, such as the Baltic states, agreed to allow farmland sales immediately upon admission. But some countries in both categories now want to renegotiate the issue. Analysts say such moves could be caused both by disappointment among farmers that EU membership will not bring instant prosperity and by populist politicians' accusations that governments showed weakness during negotiations with the EU.

Prague, 18 July 2002 (RFE/RL) -- Several of the 12 European Union candidate states are showing increasing dissatisfaction over the deals they negotiated on the sale of farmland to foreigners after EU accession.

From the Baltic countries to Hungary, more voices are calling for better terms. Some are asking for transitional periods, others for the extension of such periods.

Out of 12 candidates, all but one, Romania, have closed negotiations on the chapter regarding the free movement of capital, which includes the issue of land sales to foreigners. Most of them closed the chapter by December last year.

Lithuania, Estonia, Latvia, and Slovenia have concluded negotiations without any transitional agreement, giving the green light to foreigners to purchase land immediately after admission.

Hungary, the Czech Republic, Slovakia, and Bulgaria were granted a seven-year transition period before EU citizens could buy farmland there.

Poland, the largest of the candidates, was the last to close the chapter in March, and obtained the longest transitional period, 12 years.

In many of the candidate countries, constitutional amendments are still required to bring legislation in line with EU regulations permitting land sales to foreigners. However, even under the current legislation, loopholes exist for foreigners or foreign companies wanting to buy land.

Now some of the countries that were among the first to close negotiations on the issue, like Estonia, Lithuania, and Hungary, say they were given raw deals.

The Lithuanian government decided on 10 July to ask the EU to reopen talks and grant it a seven-year transition period.

In Estonia, which allowed farmland sales to foreigners as early as 1996, the main opposition party, the People's Union, has begun gathering signatures for a ban on such sales until 2012.

Those who support renegotiating the transition periods argue that low farmland prices will allow foreigners to buy up the majority of a country's arable land.

But analyst Ramunas Vilpisauskas of Lithuania's Free Market Institute told RFE/RL that foreign interest in buying farmland in Lithuania and other Baltic countries is relatively limited, and does not justify the sudden calls for transitional periods.

Vilpisauskas said such calls could have been triggered by a combination of factors. Among them may be disappointment over the EU's decision to have new members wait 10 years for parity on farm subsidies, the interests of local land speculators, and traditional historical sensitivities. "Part of those protesting against [the absence of a] transition period are farmers who are simply reacting to potentially lower support from the EU [agricultural subsidy] funds, and they think they wouldn't be able to compete. Also, there is a group which lobbies to have a transition period because of emotional reasons, and there is also a group of domestic farmers who are willing to buy land cheaper and then to sell it later. For this [latter] group, the transition period provides more time to buy land before it gets more expensive before the barriers are removed," Vilpisauskas said.

Foreign land purchases remain a sensitive issue throughout Central and Eastern Europe, where memories of foreign domination and shifting boundaries are still fresh.

In Hungary, the new socialist government has reportedly sent a request to the EU to prolong the seven-year transition period by three years if big gaps between Hungarian and foreign land prices persist at the end of that period.

But the reported move did not prevent Hungarian farmers from mounting roadblocks throughout the country on 15 July to protest what they said was the government's plan to change laws regulating land sales to foreigners.

The government, however, said farmers "misunderstood" its intentions and reassured them that it will not make it easier for foreigners to buy Hungarian farmland.

In Poland, which has the strongest farming sector of all the candidates and has so far been granted the longest transitional period, there is also growing support among farmers for anti-EU parties, such as the populist Samoobrona (Self-Defense), led by maverick politician Andrzej Lepper.

Enlargement analyst Heather Grabbe, of the London-based Center for European Reform (CER), said foreign land purchasing is stirring controversy now chiefly because there is more public awareness about EU membership among the candidate countries as the enlargement date draws closer.

Grabbe told RFE/RL that populism is also playing a stronger role in national politics. "We've seen this in Poland with Andrzej Lepper, the populist politician, and also in Hungary, where one of the few areas that the new Hungarian government under Peter Medgyessy wants to change after it joins the EU is the possibility of having a longer transition period on land selling. The EU is in a slightly awkward position, because it has given countries different lengths of time, so that obviously giving countries a different deal on this issue means that countries feel that they have to come back and reopen the chapter because they have to get just as good a deal as their neighbors have done," Grabbe said.

In Romania, the only candidate country that hasn't closed the chapter on the free movement of capital, the issue is regarded differently.

The second-largest candidate country after Poland, Romania has considerable agricultural potential and very large areas of farmland. But Romania and its neighbor Bulgaria are also the only candidates that will not make it into the EU in the first round of expansion.

Romania initially had asked for a 15-year transition period in allowing the sale of farmland.

But Vasile Puscas, Romania's minister for European integration, told RFE/RL that the government this year discussed the issue with parliamentary parties and unions and agreed to reduce the interval to seven years. "Currently, in the complementary paper transmitted [to the EU] in April, we modified the transitional period from 15 to seven years. This was based on a special program to prepare the Romanian market," Puscas said.

Puscas said it is possible that at some point foreign purchase of land could become a political issue in Romania. But because Romania will not join the EU until 2007 at the earliest, interest in the issue is, for now, low.

In the Baltic countries and Hungary, which were among the first to close negotiations on the issue, critics have accused governments of being too lenient on the farmland issue in order to close negotiations faster.

Lithuanian analyst Vilpisauskas warned that if Lithuania's bid to obtain a transition period is successful, it could trigger a chain effect in neighboring Baltic states. "I know that if Lithuania gets the agreement from the EU on the transition period, it could be likely that Latvian farmers and interest groups would use this as an example and an argument to follow the same path in the case of Latvia as well," Vilpisauskas said.

However, British analyst Grabbe said it is unlikely that the EU will be ready to go back and make any substantial concessions, since the deadline for closing the negotiations is drawing closer. "I think they could have some symbolic concessions, but I think it's unlikely they [the EU] will give anything substantive. They'll give concessions on anything that doesn't involve large amounts of money, that's the key thing. On some of the technical things, it may [make concessions], but at this point, the candidates' negotiating power is getting less and less," Grabbe said.

Grabbe said the advantages of joining the EU even under the current terms are far greater than the drawbacks. However, she warned that some media and politicians in these countries highlight only the difficulties, creating a wave of artificial Euroskepticism. "In the long run, they're going to get a lot more money than if they stay outside. In the long [run], and even in the short run, the benefits of joining will be absolutely huge. But the problem is that all they hear about in the press is about the 25 percent of [farm subsidies], all they hear about are the problems. They don't hear about the positive things. So I think there's actually a severe danger at this point that the EU will create Euroskepticism in Central and Eastern Europe before they have the Euroenthusiasm," Grabbe said.

But Grabbe said that once the initial wave of disillusionment wears off, the candidate states will realize that joining the EU is going to be what she called "an incredibly good deal."