Proposed Agricultural Land Law Postponed For A Year

The members of the Agricultural Committee finally adopted a decision yesterday to postpone the examination of the new Land Law as the official motive is the expected new EU Common Agricultural Policy, and the unofficial one being too much criticism from various branch organizations with BAALO only yesterday repeating again some of its arguments against the law.

The main motive for the postponement is that “preparation for the new programming period of the CAP requires consideration by the national legislation in order to comply with the objectives of the new European Agricultural Policy”. Opposed to the postponement of the examination of the fundamental law, which must regulate agricultural land relations in Bulgaria, were MPs from the Patriotic Union. “I don’t see why we are deliberately avoiding assuming responsibility for the settlement of the agricultural land relations, which have also been awaited for a long time within the industry. If changes are needed, better incorporate them in the existing laws, but such can not be made because we are all still awaiting for this same law. If need be, let be a vote against the acceptance of such a law and let the waiting be over once and for all. Otherwise, it wouldn’t make any sense because there will be a waiting period for the new CAP or something else which may pop up and which will require even a further waiting period,” said Mr Alexander Sabanov.

“We are aware that there are over million owners and tenants of farmland, and the state makes every effort to ensure the proper and sustainable use of farmland. With the last draft of the law, we tried to protect the interests of the owners by introducing maximum dates for lease contracts, but nevertheless, we received feedback from interested parties that the continuous and repetitive postponement of the law by six months, is no longer acceptable. In addition, the branch requires for corrections to be made in some texts “, said the Vice- Minister Mrs Virginia Krasteva.

“We, the members of the Association of Agricultural Land Owners, have a few remarks that we have set out in our motives to the Ministry of Agriculture. The first is that the currently proposed project does not correspond to the reasons leading to the Parliament’s decision to change the legislation regarding agricultural land. In addition, when a new law is drafted, already existing laws are abolished only if significant new changes are introduced. However, the bill proposed, does not meet the above requirements because it retains and confirms the present state of affairs regulating agricultural land relations,” stated BAALO’s member Mr Miroslav Karakashev.

According to him, the argument for limiting the duration of the lease contracts is not serious because the problems with counterfeit contracts are not dealt with and the sovereign right to property is not respected. “If so far the owners have been deceived by contracts valid for up to 50 years, it is now proposed that they will be tricked by contracts for a period of 10 years,” he added.

Professor Svetla Bachvarova believes that it is possible for two separate laws to be created and this suggestion deserves to be debated further. One of the laws is to regulate the legal rights of the owners of agricultural land and the other one to define the rights and obligations of tenants of agricultural land. “The changes in the law over the last ten years have mainly focused on setting the rules for tenancy of agricultural land and have at the same time ignored the ones pertaining to the owners of agricultural land.” Professor Bachvarova is convinced that the legislation needed should be more sophisticated and specific, one that will effectively manage to establish clear regulations in agricultural land relations.


Stayko Staykov: Adoption Of Proposed Agricultural Land Law Should Be Postponed

“In a rule- of- law state no one is allowed to seize unjustified ownership of agricultural land. This is unthinkable and all the other stream of problems all stem from that. Therefore, we must first solve the problem of ownership”, firmly states Stayko Staykov, Chairman of the Bulgarian Association of Agricultural Land (BAALO) for Agri. BG.

Agricultural Land Owners: First Severe Criticism of the Agricultural Land Bill.

Today the Association has sent its official opinion on the draft Agricultural Land Bill to the Ministry of Agriculture, which public consultation expires after three days.

“Within the draft law, there are many problems that need to be cleared with the branch organizations. I believe it is impossible to draft a new law for only six months. It takes time to make substantial changes that are now lacking”, believes Mr Staykov.

The Ministry of Agriculture has until the end of the year for the new draft law to be adopted by the Council of Ministers and to be proposed for voting in the National Assembly.

“Why the hurry is incomprehensible to me since it will be in 2022 – 2023 when the new Common Agricultural Policy (CAP) will enter into force and in which there may be changes that we are at this point unaware of. Let’s set ourselves a deadline within which to solve our problems. Only after the new framework has been approved by the European Parliament (EP), are we to make new Agricultural Land Bill “, suggests Mr Staykov.

Stayko Staykov, “We have to take into consideration the interests of the future young generation. The most important thing is that they have a legal basis. “

According to him, the idea of the new law is to benefit both the owner and the user/tenant of agricultural land.

“The problem with the so called ‘white spots’ persists and it is not right to tell any young person who wants to cultivate agricultural land that the land will not be available for use this or that year because it is part of a previous agreement. It is not acceptable to artificially seize areas with the justification that the land needs to be consolidated”, BAALO’s Chairman is adamant.

According to Mr Staykov, it is the white spots which form one of the most serious problems for agricultural landowners, this problem however, has not been addressed in the new draft law.

“By Constitution, private property is inviolable. If you do not give your land to someone else to use it by your own voluntary agreement, this person is not allowed to touch it. The only legal basis is a statement of agreement on behalf of both parties that actually forms the contract”, argues Mr Staykov.

The way in which agricultural land is rented should also be changed. “If the tenant, at any given moment, informs the owner that he no longer wishes to work the land, the owner should be obliged to terminate his contract. However, if the tenant does not pay and does not fulfill his duties, the owner is forced to initiate legal proceedings which may take up to 2 – 3 years and be very expensive. Why is it that the legal owners can not breach the contract if they are not paid?

There must be a provision in the Bill concerning the above issue, if there is no-payment on behalf of the tenant, they must be given a period of 6 – 12 months to settle their payments “, offers Mr Staykov. Stayko Staykov: “It is not right for a farmer who has not paid for the past business year to use the goods of the land during the next one, let alone use subsidies at the same time. “

In his opinion, the calculation of an average payment defined by region is not always well-intentioned and correct. “There are regions where an average amount of 50 – 60 BGN is paid as annuity per acre. On the other hand, there are also places where the amount is only 5 – 15 BGN. Moreover, based on the ownership of the land, a subsidy is received for more than 30 BGN. This can’t be serious. Considering the above stated, it is essential that in Bulgaria work must be done on clearly defined agricultural territories “, offers Mr Staykov.

Compensation schemes present another big problem for owners of farmland.

“For example, because of the construction of the highway, the land plots which were forcefully expropriated, were compensated at the rate of 300 BGN/DKA; that amount was calculated based on the previous year’s government assessment of agricultural land value. The owners are entitled to much larger compensation packages because their land has been forcefully acquired. As if it is not enough to be offered 300 BGN/DKA, but on top of that, owners had to pay 500 BGN for legal fees. And we were only given a seven- day period to do so because it is a subject of national importance, “comments Mr Staykov in dismay.

According to him, Bulgaria has to take example from leading agricultural countries, such as the Netherlands, France and Germany.

“Let us write the law so that it works in practice, as in other countries. If we all obey the law, we will manage to do both land consolidation and irrigation, and investors will be motivated to make long-term plans, “concludes Mr Staykov.


Agricultural Land Owners: Initial Harsh Criticism towards Draft Land Law

“The changes in the law are neither numerous nor important. They practically follow the same negative patterns used to govern agricultural land relations for the past 10 – 15 years.” The above has been stated in a draft preliminary view by BAALO (the Bulgarian Association of Agricultural Land Owners) regarding the currently proposed Land Act, opened for public discussion until 5 December 2019.

Draft law on agricultural land close-up: annuities, agricultural land consolidation and contracts. An official letter will be sent to the Minister of Agriculture, Ms Desislava Taneva on Monday. Agri. BG was the first to be informed about points of contention within the sector.

The members of the Association are all decidedly not in favour of the Bill and its proposed methods for managing agricultural land relations.

“A number of key statements in the draft Bill are in principle contradiction to the Basic Law. The constitutional rights of over 3.5 million Bulgarians have been violated, those are all Bulgarian citizens who are actually also owners of agricultural land “, says Mr Stayko Staykov, Chairman of BAALO.

Mr Stayko Staykov, “The draft Bill, if adopted as proposed, carries the potential of inflicting irreparable economic damage to Bulgaria.”

The Association argues that after the expert working group was assembled at the beginning of 2019 by appointment of the Minister of Agriculture, its members convened only once.

“Following one-off submission of written statements by some representative organisations, the Working Group was prematurely dissolved by another ministerial order. As a result, what is presented for a public discussion is only a draft bill, which does not correspond to any of the tasks entrusted by the decision of the National Assembly of 19 September 2017 “, claim the owners of agricultural land.

Stayko Staykov: “All that the new Bill offers is to incorporate and bring together several laws which are already in force, it does not in any way offer a new method for the development of agricultural land relations.”

The Association argues that there is evident inconsistency provoked by the Ministry of Agriculture’s statement reading as follows: “The Bill addresses the arrangements for agricultural land use, for which the main method of regulation is that of power and subordination, typical for administrative law “. BAALO was quick to respond to the above with a stringent comment, “We believe that state interference in such relations should be limited to a minimum and be kept within the framework of its legislative function. The introduction of administrative interventions in these privately governed relationships should be limited to ensuring transparency and public access to information “, explain the members of the Association.

Their current view is limited to the basic principle shortcomings of the Bill in its most essential part – chapters and sections devoted to the use and ownership of agricultural land.

“Indeed, our current position does not differ significantly from the remarks we made to the Ministry of Agriculture on the previously proposed Bill regulating property ownership, agricultural land relations and the protection of farmland, which was also published and opened for public deliberation on 17 December 2018,” recall from BAALO.


Stayko Staykov: Farmers are an impulse to the land market

Interview taken by: Alma Davidova

More and more macroeconomic signals are alerting the crisis about to approach next By definition, the fields are preferred asset-asylum

-You recently seised the state and the public about the unfair rules of forced expropriation of farmland. How should the rules be changed?

-The amount of the compensation is very low and does not conform to market conditions. The Bulgarian Association of Agricultural Land Owners (BAALO), represented by me, insists on normative changes that create safeguards for owners of private properties, for determining fair and market-corresponding benefits in cases of forced expropriation of agricultural land and also for the establishment of servitudes on it for state and/or municipal needs. There are more and more cases of forced expropriation and establishment of servitudes on private land for the construction of national sites. Often this happens in violation of the rights of the owners in terms of determining the amount of compensation due to them. In the Constitution of the Republic of Bulgaria is written that enforced expropriation of property for state and municipal needs can only take place after a preliminary and equivalent compensation. The State Property Act (SPA) provides equivalent cash compensation. However, in the general case of compulsory expropriation of whole or parts of agricultural property, no equivalent real estate benefit is offered within the meaning of the law. The lack of justice forces the owners to defend their rights in court. Another problem is the unjustified long period, which passes between the time of determining the amount of compensation until its actual payment. Often during this period, the current property market has changed, prices have risen and the initially determined compensation becomes inadequate. The private owner’s compensation, respectively, is not sufficient to buy the same amount of agricultural land. At the heart of the problem are inadequate rules for setting the price levels at which the compensatory benefits are paid.

-Do you have any specific proposal in mind?

-BAALO offers a number of changes related to the actualization and the updating of the prices for compensation of forced expropriation and the establishment of the right of way. We appeal for a minimum compensation price to be set. Assigning land into different categories should be abolished. The leading factor to be considered should be the size of the land. Often land categorizing does not reflect whether the land is consolidated, arable, irrigated, and last but not least, it doesn’t specify the yields obtained from it. It will only be fair to the owners of agricultural land, who have to go through forced land expropriation, for their costs related to the procedures and the provision of the necessary documents, to be covered by the institutions, which in no doubt can obtain them on their own with no further cost to the landowner. There are cases in which the administrative costs of the owners of expropriated land properties exceed the amount of the compensation received by the state. BAALO demands that the start of any construction and/or preparatory activities related to the establishment of rights of way of a given land, is initiated only after harvesting is completed. In this way, the damage incurred to owners and tenants can be minimized.

-Fragmented agricultural land continues to be a big problem. What is the way to solve the problem? Is there a chance to draft a specific law for land consolidation?

-The intentions in that respect, in the past year, are to gather all regulations regarding agricultural land, into a new unified and comprehensive legislation. The lack of a specialized law for agricultural land consolidation does not allow for the enlargement of ownership and to developing modern agriculture. The problem is that the general public does not understand the meaning of the term “commassation”. It originates from Latin word “commassatio”, which in Bulgarian is translated as grouping. Commassation or consolidation (in English), is a systematic approach to agricultural land aimed at defining the rightful owners of the land, redesign the land, restore and construct infrastructure, irrigation, drainage, enlarge the plots, implement environmental measures, etc. The ultimate goal (besides higher productivity at lower cost) is to achieve a combination of private and societal benefits. By improving the agrarian structure (of a municipal land or any land plot), the social viability of the agricultural region is developed and supported. The development of rural areas bringing (improving their standard to that of the urban one), is stimulated. Conditions for opening new jobs are created. Last but not least, is also important for the development of competitive and profitable agriculture. This is also the main cause that at the primary market, property has changed only 15-20% of the total Agricultural Land Fund in Bulgaria (arable and undeveloped agricultural land, pastures and meadows), which is approximately 55 million acres and approximately 25-30% of the arable land, which is nearly 36 million acres. For the last 30 years, only 6 commassation projects have been successfully completed under BAALO initiative and financed by private funds. At present, BAALO has fifteen ongoing procedures for consolidation of agricultural lands in the following municipalities: Strajitsa, Sredets, Borovo, Letnitsa. Elhovo, Gulyantsi, Kaspichan, Pleven, Lovech, Gorna Oryahovitsa, Suhindol and Ugarchin. So far 100 000 acres have been declared for participation in the process, but there is a potential interest from other participants as well. Maps are being drawn for these territories regarding the current state of the land there: soils, climate, nature, roads, industry, as well as the areas that need to be consolidated. Maps outlining future plans for reconstructions, protection of the environment, etc. are also drafted. Additional challenges for the industry are the lack of investments in irrigation facilities (watering, drainage and prevention). There are no working solutions for protection from hail, for insuring of agricultural production, for prevention against erosion, etc. Bulgaria has lost a lot of time and our lagging behind regarding the above has deepened even further. For years, these problems have been neglected, which led to the impossibility of Bulgarian farmers to be competitive. All these problems in the agricultural sector and the use of agricultural land, have logically affected the price of farmland as well.

-Why is the land-use consolidation no longer effective?

-In recent years, in Bulgaria, land consolidation is only performed on tenancy and temporary land use terms (the so called “white spots”).

-This is one of the reasons why there is actually no real consolidation of agricultural land. The specific law giving similar rights to redistributing land for administrative use is contrary to the Constitution, which protects the privacy and integrity of private property. This mechanism was adopted ten years ago as a temporary measure under different from today’s circumstances. The owner was obliged to submit an explicit written declaration every year until 31 July, whether he would work his land. Failure to submit this statement practically deprives the owner of all the principal attributes of the right to property. Ultimately, a third party is accommodated within his ownership without his knowledge and/or consent. Nevertheless, these persons have a number of rights, including declaring the property officially and receiving EU subsidies and national surcharges. The only obligation for this user of someone else’s land is to pay the average rent for the land and transfer the amount to an account for foreign funds of the respective regional Directorate “Agriculture”, which is then kept for a 10-year period. Again, the whole procedure is performed with disregard of the rights of the actual owner. The problem is the administration of these funds and especially the control of their payment. The fact that these directorates have no obligation to inform the rightful owners about the availability of funds to be received by them, is also quite perplexing. We are witnessing a number of cases in which users are deliberately prevented from concluding contracts of use (rent or lease) of agricultural land. It would not have been possible for this to happen without the above -discussed mechanism specifying agreements of use of agricultural land. They provide the legal basis for establishing reputed ownership of someone else’s land and these mechanisms also allow to obtain subsidies without the rightful owner’s explicit agreement statement. This long-term practice violates the rights and harms more than 3.5 million owners of agricultural land and their successors. What’s more, it severs the historical relationship between the Bulgarian and his land. The result is a permanent tendency for depopulation of Bulgarian villages. The official redistribution of the so-called “white spots” (consolidation based on tenancy use), in combination with extremely fragmented properties, are one of the main reasons for the owners of approximately 2 million acres (almost 6% out of the total of 36 million acres of arable land), to not wish to care about their land.

-How has the agricultural land market transformed over the past years and what is the configuration of the current players?

-In recent years, a tendency to exiting the market from speculative and partially of foreign capitals, has been noted. With the expansion of land relations the secondary market of agricultural land is developing. It will become more and more important.

-What is the role of farmers in the land market?

-An impulse for the market is the growing role of farmers, who developed their farms and who now enjoy financial stability, and are convinced of the advantages of handling their own land. Through practice, they realised that in developing conventional agriculture (Bulgaria and Bulgarian farmers have been assigned to develop the most undesirable and unprofitable type of farming within the EU), they should seek security and predictability. For southern Bulgaria, the crops we can call conventional or typical, are grown for a period of between 6 and 10 months, after which they are harvested and then sold. The main crop among them is the wheat. Rapeseed crops in recent years have been problematic. The other one is the sunflower. Recently, however, its price is very low. Next comes the coriander, which is not a stock commodity. We also know about the very popular chickpeas, but popular only as a seeding culture and not in terms of its sale results. There is no market for chickpeas right now. In northern Bulgaria, we must first mention one of the major crops grown there- the corn, which comes second after wheat. Not that in southern Bulgaria there is no corn grown, but it takes up symbolically small plots of land where irrigation facilities are meager. The rapeseed and the sunflower are the next two conventional crops for Northern Bulgaria. There, the yields are significantly better because the climate is much more favorable, including the quantity of rainfall. Another factor is the soil and it is normal to have better yields.

– What are the current year’s prices and annuities by region? What’s the trend?

-Agricultural land is a finite resource. The trend for an increased demand for agricultural land on a global scale will be kept. The population of the Earth continues to increase, it already comes to more than 7 billion people. This leads to an increased demand for food. In the developing giant countries in the East, together with the improvement in their standard of living, there is also a change in their eating habits. The increased use of animal products leads to an increased demand for animal feed. Environmental policies, in particular the requirement to produce bio fuels, increase the demand for specific agricultural raw materials, etc. Against this background, Bulgaria cannot be radically different from the global trends. Agricultural land enjoys a permanent interest. In 2019, the market was competitive. We observe a growth in prices of nearly 7%. Selling is limited. We can say that the market is dictated by the sellers. In renting and leasing agricultural land, the picture is slightly different. An upwards tendency is also noted, but a smaller one. Assuming that global recessions (crises) are cyclical in nature, we are seeing more and more macroeconomic signals that alert to the approaching of the next one. By definition, agricultural land is a preferred asset-refuge. It has low correlation in comparison to traditional asset investment classes and possesses high yield at limited risk. The price is influenced by political risks and economic cycles only to a smaller extent. At some point, I expect capital from other sectors of the economy to be redirected towards more secure investment alternatives, respectively agricultural lands. This will of course be reflected in both the price of the asset and the volumes traded and the levels of the money payments.

-Why are more and more foreigners, who have invested in agricultural land in Bulgaria, are now selling their land and leaving?

-It’s a perfectly normal business cycle and logic. This process applies not only to foreign investors, but also to Bulgarian ones. Most of those who have invested in agricultural land, have done so under different economic conditions and at a much lower price than the current one at the moment. By deciding to sell the asset, assuming they had it for around 10 years, they made a profit between 200 and 250% for the period of the possession.

-What happens to the initiative for creating a National Chamber of Agriculture and a National Agricultural Land Bank?

-Personally, and also in my position of a chairman of BAALO, I still keep dreaming about these two initiatives to be realised. I would like to thank all my colleagues from BAALO for their support, together in the past ten years, we have been fighting for Bulgaria to have a united agricultural community. A united community that will be the face of the agricultural industry, to represent the community to the executive, legislative and local government, and also to the partners abroad-the European Parliament (EP), the European Council (Consilium) and the European Commission (EC). The National Chamber of Agriculture is not a panacea though. But it is the only chance for the future of our agriculture. On the basis of maximum participation, united and forgetting our differences, we should strive to make Bulgarian farmer and owner equal and competitive to his European counterparts. We should also aim at developing modern forms of agriculture based on the latest scientific achievements. Let’s also develop the rural municipalities. Let’s get them closer to the urban standard. We have to offer decent jobs and decent pay to people in those areas. Let’s provide them with alternatives different to Terminal 2 or migration to the city. After attending all the meetings, I am optimistic. The Ministry of Agriculture, Food and Forestry supports the cause. We are preparing an official workshop with some of the landmark NGOs from the agricultural industry. If we are successful, the creation of a National Chamber of Agriculture from a pipe dream will turn into a reality. The creation of a National Agricultural Land Bank (NALB) is one of the so-called “whales” or a pillar, around which modern relations in agricultural land use, competitive and profitable agriculture will be developed further. The logic behind the Agricultural Land Bank is for this institution to be an active participant in the processes of establishment and maintenance of consolidated agricultural territories and for the effective management of farmland in attracting investments in agricultural sectors. It will help to implement the country’s agricultural policy for sustainable development of agricultural land relations, activation of the agricultural land market, etc.


Stayko Staykov, Chairman of the Board of Directors of the Bulgarian Association of Agricultural Land Owners (BAALO): “Compensation paid for acquisition of agricultural land for roads construction is far below market prices”

“According to the state, the price of an acre in Dobrudja region is set to 100 BGN but it actually costs 2000 BGN”, says Stayko Staykov, chairman of BAALO.

-Mr. Staykov, is the reimbursement that the land owners receive in cases of state -forced land acquisition low? Yes, it is. The problem with the acquisition of land by the state is serious and it dates back long in the past. We have been pushing for changes for several years now and we hoped they would be included in the Law for agricultural lands, but unfortunately it has never been passed as such. The prices at which these reimbursement compensations are set date back to 20-30 years ago and are dependent on the category of the land being expropriated. This is extremely unjust for us because category range between seventh and tenth is low and thus the owner receives between 50BGN and 300BGN per acre. That is, to put it mildly, outrageous, because the owner cannot buy anything with this money. And at the same time the law says that the owner must be justly compensated.

-As far as I know, agricultural lands falling into the 7th category, are common in Dobrudja region as well, is that right?

-Yes, that is right, besides, the prices there go over 2000 BGN per acre and it is totally absurd for the owners to receive low compensation rates for expropriated land. In Silistra, the same trend is visible, land assigned to category 6 there, will cost around 600-700 BGN per acre. The experts who perform land evaluation are not to be blamed themselves because they work on the basis of concluded transactions per year. They simply follow the regulatory requirements, which we want to be changed. When offered to be compensated, it is normal to wish to buy the same amount of land. Not to mention that you have expenses on the purchase and the selling of the land.

At the same time we are witnessing another discrepancy-if you want to exchange land, the state will even charge you less, in Bulgaria it is exactly the opposite-not only will you get an insignificant amount, but you will also have to pay for all the documents necessary for the transfer. Yes, the construction of roads is a good thing but let’s not do it at the expense of the owners. This is the main problem, although we are now talking only about Hemus Highway and the highway segments around where there are many terrains for expropriation.

Small land owners are more than three million and the State violates their constitutional rights. There are over 1 million acres of land within the State Agricultural Land Fund. Our idea for this land is not to be sold or auctioned and when the state needs to compensate the owners, they will have the option to choose between either a cash benefit or land plots to receive. It is very important for us and the state to take into account the harvest season and only to proceed to expropriation when appropriate because otherwise the owners will face losses.

The prices of fields and agricultural lands in general continue to rise every year but compensation benefits have not changed for dozens of years. Compensatory prices date back to the times when the acre in Dobrudja was sold for 100 BGN, while at the moment it costs 2000 BGN and the compensation for such property should not be tied to the category of the land.

-Do you have any such cases at BAALO?

-It’s not just one case, there are numerous cases actually. Every day, we are contacted by affected people from different municipalities who complain about the low compensatory prices, be it when the state is buying their fields for building highways, be it for the establishment of rights of way. We try to appeal but the result is clear, under the current legal framework we can not get a higher price. And finally, any appeal procedure initiated is at our own expense. The situation with smaller owners is even more worrying because they either cannot afford to appeal at all, or they are not familiar with the law and procedures and therefore become extremely worried. If you refuse the state to compensate you and do not agree with the prices it offers you, there is a procedure in which the land is taken for the specific project within a certain period anyway. And if and when you’ll get your money is another question. This could happen in a year or two but you might not get it at all. For example, if you own a land abroad and you have no bank account in our country, how exactly will the money be transferred to you? They will be kept in an account here but we think this is wrong and we also believe the normative should be changed. Some kind of average price must be established and it should be based on current market prices. Bulgaria and Romania continue to have the lowest prices in Europe and the state will not be financially harmed. The Constitution says that Bulgaria is the rule of law state and private property is inviolable.

-Who have you spoken to regarding this matter?

We’ve sent letters to all ministries, including the Minister of Agriculture. The law has to be changed. Affected are not only the owners of land within the association, but in practice everyone including other branch organizations-milk producers, grain producers, etc. Even the experts who make the evaluation and determine the amount of benefits due are affected because they also own land.

-What is the current progress of the new law on agricultural land?

-A new working group in the Ministry is currently working on the proposals. The deadline for the publication of the project is by the end of the year and then an opportunity for public consultation will be given. Nothing has changed-Bulgaria still remains the country with the most fragmented land in the whole of Europe. What’s more, from all former irrigation facilities, only few have been preserved and they are in a bad condition. A year ago the Ministry proposed a project, which, to put it mildly, was disturbing. For example, it was envisaged for a fixed amount for the minimum payment to be set, which is absurd. How does poor quality land falling into the last categories, cost as much as high-quality land?

I hope the law will be clearer now and that it will be approved soon. The law is also of a huge importance to foreign investors who want to make sure that if they come to Bulgaria their investments will not be lost. So far, agricultural laws have been changed over 60 times. Usually only partial changes are made and often times they do not correspond to other sections and regulations of the law, which leaves people confused.

If you are working from year to year and apiece as at the moment and a company invests some money, after a few years, when the conditions change again, the company will lose its investment. Then why would anyone even consider investing? In order for an efficiently-working agricultural sector to be functioning, the law must be such as to protect both the interest of the State and that of the farmers and the landowners. So young people will not have to worry that when they return to Bulgaria and withdraw credit for their business, they will lose their money after a few years.

-The problem with the hail also needs to be addressed, is that right?

-Yes, it’s one of the most serious problems together with irrigation. Currently, the state will compensate the farmer with a certain amount only if the farmer has 100% damage. And the insurance company pays very little-in most cases about 20-30%. Therefore, farmers prefer not to insure themselves. The idea of a tax in case of “hail” for us is controversial because the state can find another way to raise money from its farmers, for example, if the state solves this problem itself, farmers will have greater harvest and accordingly will pay higher taxes.

-Are land prices going up once again following inflation rate percentage?

-The market in our country is stable because there is no real land consolidation and therefore we can hardly expect a big investor to come and disrupt the balance. We expect a price increase from 5% but that’s not at all insignificant. Compared to average prices in Dobrudja, this is 100 BGN higher.

-How do you expect the land market to change in view of the new programming period?

-We expect the subsidy levels to be maintained at the same level. The farmers were stressed because they expected to have problems but their fears were not justified and even Bulgaria would get a bit of an increase in the subsidies assigned to the country. We should not intentionally put pressure on the agricultural sector because farmers are already worried about other issues, the agriculture is a factory under the sky and the worries about the harvest and the market prices are more than enough to be preoccupied about.

-Will Brexit affect agriculture in Bulgaria?

For us as a small country, Brexit shouldn’t matter that much. Europe has deliberately put pressure on the small countries so that the amount of subsidies remains the same. There should have been a convergence of what we and our other colleagues in the EU are getting, but this didn’t happen. Now, since Brexit talks began, it is also constantly being discussed that the amount of subsidies should be kept at the same level because the EU has no funds to increase them. No profitable and competitive farming can be made without the support from own country’s government or from the EU.


Stayko Staykov is chairman of the Board of Directors of the Bulgarian Association of Agricultural Land Owners (BAALO). He was born in 1969 in Sliven. In 1996, he graduated from Aleko Konstantinov Institute for Tourism in Burgas. He also graduated Tourism at Burgas Free University and later received a degree in Finances from “St. Cyril and St. Methodius ” university in Veliko Tarnovo. He has been the managing director of Staven JSC since 2010.

source: Sega newspaper, p.14


Stayko Staykov, BAALO chairman, “Farmers are stressed because of the uncertainties surrounding Brexit and the future Common Agricultural Policy

Interview taken by: Aneta Bojidarova

A partial alignment of European subsidies will be a success for the Commissioner for Agriculture Janusz Vojciechowski, believes Mr Staykov

-Mr Staykov, do the uncertainties around Brexit and the future CAP have an impact on the agricultural land market and if so, in what way?

All are apprehensive, and that is reflected on the current stagnation characterizing the market. It is not yet clear on what terms the UK will leave the European Union and how this in turn will affect the budget of the future CAP – will the subsidies for direct payments be reduced, will payment ceilings be introduced, what money will be released for irrigation, etc. These questions are keeping the farmers in apprehension. Of course, the ambiguity of the situation has an impact on the agricultural land market, but the tendency for a smooth growth of prices is maintained everywhere we have deals. Farmers currently pay annuities, buy fertilizers, chemicals, seeds, fuels – if they do not get the subsidies paid in time, they will have to withdraw loans. In this sense, hardly will they purchase land and will it be on the agenda for them, except for the big stock market players.

-How will you comment on the presentation of the future Commissioner for Agriculture Mr Janusz Vojciechowski and his views on the implementation of the future agricultural policies? He spoke about the equalisation of subsidies in European countries – is this possible?

-Although the agriculture in Poland is much better developed than in Bulgaria and Romania, for example, it can be said that there are many similarities. It is therefore reasonable to expect that Mr Janusz Vojciechowski will defend the policies that the newly-joined Eastern European countries are looking for. I strongly doubt that countries such as Germany, France, Italy and Spain will allow the alignment of subsidies for agriculture, but we can at least insist on and hope for a partial one. Equalisation of subsidies will mean that the countries of Eastern Europe become a direct competitor on the common European market. Given the quality of our fruits and vegetables, for example, we would be a threat to farmers from Western Europe. I don’t believe that’s going to happen though. On the other hand, sooner or later, a smooth alignment of subsidies for all European countries must happen because inflation has taken its toll on subsidies in Bulgaria and they cannot remain of the same amount as 10 years ago.

-Bulgarian grain producers are increasingly voicing complaints that it is difficult for them to be competitive on the market, in this respect, what change is needed in the agricultural policy?

-Imported fertilizers, chemicals, seeds – prices are constantly on the rise. It turns out that we help the European economy and at the same time they are threatening us to reduce subsidies after Brexit. That is why Bulgarian farmers seek justice. Their anxiety is related to the fact that nothing specific is known about the future Common Agricultural Policy yet. This causes farmers to refrain from abrupt movements because the future is unclear. If subsidies are reduced or ceilings are introduced, this may lead to a reduction in annuities, even to a refusal to cultivate land. And although the land is the most valuable resource, if it does not bring profitability, this may lead to the abandonment of whole areas. But that’s just a guess. Even with the current subsidies, we are not competitive, let alone if subsidies are reduced. I would therefore like to believe that the Mr Janusz Vojciechowski will have the power to fight for better agricultural policies for the Eastern European countries. We have wonderful conditions for the development of agriculture; we just need to be given the chance.

-How can we help our own selves in this battle?

-By being united. It is high time we established a National Chamber of Agriculture in which all branches will be members of and to defend our interests together. When the branch is united, the problems are addressed more visibly and clearly and a solution is found much quicker.


Stayko Staykov, “The price per acre for agricultural land reaches over 2000 BGN, while in case of state-forced land acquisition, the highest amount paid is no more than 1200 BGN. Rules and regulations are in desperate need of readjustment.”

“The price should not depend on the category of the land”, says the chairman of the Bulgarian Association of Agricultural Land Owners.

At the moment, the ones who are affected negatively at the most, are the small owners, if deprived of 10 acres of agricultural land, it is impossible for them to buy a corresponding size of land; the Bulgarian Association of Agricultural Land Owners (BAALO), which you are the head of, insists on changing the rules regarding state- forced agricultural land acquisition.

– What is the requested amendment, Mr. Staykov?

– A lot of infrastructure projects have been initiated recently. We, at BAALO, understand the need for such projects and the future benefits arising from them. The routes of the new highways, railways and gas pipelines are quite large, which means that there is also the need for the expropriation of a huge number of private properties. The methodology and prices that are currently being paid as compensation are based on categories and are very much outdated-from 20 to 30 years ago. The prices of agricultural land then, even in the most fertile region of Dobrudja, were below 200 BGN. The benefits payable in case of compulsory land acquisition at the moment, come up to a maximum price of 1200 BGN per acre, payable for agricultural land falling into first category, which is the highest. For agricultural land falling into the tenth category, for example, the price payable will come to about 50 BGN per acre. Therefore, what happens is that in most cases, the financial compensation for expropriated land, does not allow the owner to buy the same amount and quality of land. The process of buying itself, also incurs expenses. In this way, the constitutional rights of each agricultural land owner are violated. Bulgaria is a rule of law country and the owner must be compensated based on a normative basis assuring compensation equal to the land which was expropriated. There is another worrying aspect-one property turns to be part of another property, the category into which it falls is lower, for the owner to prepare all the documents, it is necessary for them to travel to the other side of Bulgaria. Not in all cases the rate category of assessment defined by the state, corresponds to the actual qualities of the land. Sometimes the money that the owner will spend is more than what they will get from the state in the form of compensation. Thus the owner, if they own a small amount of land, is forced to not participate in this process at all as it makes no sense- to give more money than you will receive and on top of that lose your land.

-What should be included in the new methodology rules and regulations for determining benefits?

-We offer a methodology that is not based on categorizing land. For example, the land falling in the lowest categories, where usually the owner is compensated by 50 to 300 BGN/DKA, perennials such as roses, lavender, etc., can be planted. That will bring higher profits compared to the ones which will potentially be gained from owning a higher category of land practicing conventional agriculture. A methodology for fair compensation of owners must be established, taking into account trends in the price increase in Bulgaria. Severance payments are often unjust. In Dobrudja, as we already know, the land prices can go over 2000 BGN. At the same time, the maximum compensation, without any provisions for extra payment, when agricultural land is compulsory expropriated, the highest compensation given is up to 1200 BGN for lands assigned to the first category. The land falling into categories 3 and 4, which is actually most of the cases, the prices are much lower. Therefore, we feel we must alert the public and the authorities about the problem and the need for a new methodology. Prices continue to rise, however, the amount of benefits payable is very low.

-Do you have in mind other possible forms for compensation?

-Yes, what we offer is for the owners to be compensated by the State or by the Municipal Land Fund by giving them agricultural land instead of receiving financial compensation. Even if the owners will not actually work the same land, they will be near the acquired lands. The owner should be given a choice: if they do not wish money as a form of compensation, they can get land instead. If the state allows for such a choice, the owner will be able to obtain just compensation. In this way, the interest of the many Bulgarians who are abroad will be protected as well. So far, agricultural land owners living abroad have no time to react to what is happening. No one would come to Bulgaria from abroad for 1-2-3 months, without knowing what would happen in terms of procedures. At the moment, what happens in reality is that if a case is taken to the courts, all the expenses must be paid by the plaintiff with little chances for the court to rule out a higher compensation price. Not only will the owner lose his land, but he also needs to pay additional fees because he appealed in court.

-Do you believe that changes in easing the procedures and in lowering of fees that owners have to pay are also necessary?

-The state provides for mechanisms for some of the procedures to be carried out only in the conventional way. If an owner has moved to the seaside for example, and he is originally from Vidin, there will be a cost of 300-400 BGN. The owner will invariably have to go back to his hometown for a second time in order to apply for the plan and the tax assessment documents of the land. If it is one acre, for which the owner will receive 500 BGN in compensation, he will have already paid 600 BGN for preliminary expenses. Thus it becomes absolutely pointless for him to receive the money. The idea is for all those costs to be at the expense of the government administration in case of state-forced land acquisition. The introduction of regulatory minimum prices that are in line with market realities is highly necessary. When a private owner’s land is taken, he encounters other expenses. In recent years, more and more people are closing buying/selling deals at their actual prices. But we cannot assume that this is a common practice valid for the whole of Bulgaria. In places with tenants of the same land, one time a deal might be closed for 200 BGN per acre, while at another time, a deal can be closed at the price of 1200 or 2000 BGN per acre for the same land. The law allows for that to happen. We cannot control this process but we must also not allow Bulgarians to be afflicted due to gaps in the current legislation.

-Will the largest farmers be in the greatest detriment?

-No, not really, quite the opposite. The small-scale land owners will be the ones deprived the most. They are the ones possessing the least amount of land-on average of 10 to 50 acres. When through land acquisition they are taken 10 acres, they will not be able to recover either will they be able to buy new land. This small income earned previously, will now become even smaller. That is why we want to refer the problem to the state and to the public as well. A new law on agricultural land is now being drafted and in it, new rules and procedures for just compensation must be provided. A new programming period is forthcoming, bringing new projects and newly affected owners. I hope this process is finally regulated in the country because when citizens are protected, the state wins as well.

-Why do you have to explicitly ask for a provision to be included in the law specifying that any construction activities in the vicinity of agricultural lands should begin after harvesting? Has there been a problem in this regard so far?

-When land is used for an infrastructure project, it must then be recultivated. I will give you an example-when “Mini Maritsa-Iztok” mined coal from the land, the minerals are state property, but the land is private. The owner is compensated by a certain amount, but then the land must be recultivated and thus restored. But there are other cases-for example, a railroad project takes years before it is completed. When construction work begins, no one respects the owners and let’s say they have invested in annual agricultural plants. The process is predictable, therefore a month’s delay while the crops are harvested should not be a problem. However, what happens in reality is that people authorized by a document from the state, and without even asking the owner, literally run over the crops. There are other problems. Construction waste is disposed of on adjacent private land plots. There is a contractor, subcontractor, suppliers, etc., therefore the ones to blame are always difficult, not to say impossible, to establish.

Stayko Staykov was born in 1969 and graduated from Burgas Free University, He also has a master’s degree from Veliko Tarnovo University “St. Cyril and St. Methodius” and from the Economic Institute of the Bulgarian Academy of Sciences. Mr Staykov has been working in the agricultural sector for 13 years. Since February 2015, he is a chairman of the managing board of the Bulgarian Association of Agricultural Land Owners (BAALO) and was re-elected on that position in 2017.


Stayko Staykov, “Agricultural land will continue to be more expensive in the next ten years”

“Agricultural land will continue to become more expensive over the next 10 years with the focal point of the tendency being its support and sustainable long-term use”, said in an interview with AgroClub Mr Stayko Staykov, Chairman of the Bulgarian Association of Owners of Agricultural Land (BAALO).

– Mr Staykov, what are the main priorities in the new CAP 2021-2027 as regards the efficient use and development of land resources?

– The Bulgarian Association of Agricultural Land Owners is aware of the importance and the meaning of the Common Agricultural Policy and we believe that its objectives can be achieved only by means of an open and honest debate in which all stakeholders concerned participate. State authorities and the NGO sector involved in the agricultural industry must unite around the main national objectives and priorities. In our opinion, the budget assigned for agriculture in Bulgaria should not be reduced. Convergence of payment levels between Member States needs to be prioritised. With regard to tied support for livestock, fruit and vegetables, financial assistance should not be reduced. It is important to provide a budget for projects in the area of agricultural land consolidation and hydromelioration. Each State must be given the opportunity to decide itself on the payment ceiling.

According to SWOT analysis on CAP, the cost of farmland increased by 214% in the period 2010-2017? For 2018, BAALO reported a growth of 5% – is that an indication of market stabilisation?

– According to BAALO data, the appreciation of agricultural land is between 5% and 7%. As far as official statistics are concerned, it is natural for it to differ from BAALO data. NSI uses statistical data, while BAALO provides empirical data on transactions and annuities.

Since last year, agricultural land prices have gradually begun to rise again. Interestingly, the lower limit of this growth already represents a minimum of 5 percent within just one year, which is not at all insignificant. The prices of the productive regions have already risen up to 1000 BGN per acre, and this is only the starting price at which they are negotiated. The land plots discussed are situated in regions where there is an interest towards profiting from agricultural activities.

In our view, agricultural land will continue to become more expensive over the next 10 years, with the focal point of the tendency being its support and sustainable long-term use. We expect a balance between demand and supply, with no unexpected upheavals.

– What are the prices of farmland?

– Traditionally, the most expensive agricultural land is in Dobrudja region, where deals are concluded for about 2000 BGN per acre or even higher. However, there is no serious supply. In the north, there is no longer cheap agricultural land, except for the districts near the Balkan region and Stara Planina Mountain. In the most attractive regions of southern Bulgaria-near Burgas, Stara Zagora, Plovdiv and Pazardjik, the price per acre is between 800-1000 BGN. In some territories of Stara Zagora region there are prices of 1100-1200 BGN/Acre, and there are single deals for 1500 BGN/Acre. The lowest prices are in Strandja, Sakar, Haskovo and Harmanli, as well as in Kardjali and Smolyan, where arable land is scarce. A similar situation is witnessed along the River Struma, where Greek companies have been working for years. Prices do not go above 1000 BGN per acre.

Some big companies are selling large parts of the land they own, how does this affect the market?

– The activities of the companies that specialise in the acquisition and management of agricultural land support agricultural land consolidation. They have also contributed to the increase in price, rents and the development of a secondary market. Some of the companies sold their packages while others changed their owners.

– The use of the so-called “white spots” often proves to be a stumbling block in agricultural land relationships? In your opinion, in what direction should we work to overcome this problem?

– The problem is very serious. Although there are no official statistics on white spots, they represent about 2 million acres which is almost 6% of the total of 36 million acres of arable land. As you know, these represent agricultural lands whose owners neither cultivate nor manage them and these properties are distributed by agreements or by municipal agricultural authorities to the farmers. Most often the problem lies in the fragmentation of the plots and their possession by many owners (more than 10 people), who cannot be found. It is not uncommon for the land to be rented or leased with no official agreement signed by its users. The above would not be possible without the mechanism specifying the terms and conditions of agricultural land use and which would also provide the legal basis for cultivating and subsidizing rented land. BAALO strongly opposes redistribution of agricultural land by the state of its own motion, with the purpose of cultivating it and we are also strongly opposed to the texts included in the Bill on Land Relations and the Conservation of Agricultural Land adopted in August 2018.

Do you expect that the secondary market in agricultural land will have a key role this year?

– Yes, this is a logical trend. With the development of land relations, the secondary market is developing as well. I want to draw attention to the lack of a National Agricultural Bank. It is high time for such a body to be created because the development of modern land use is impossible without such an institution.

The Bulgarian Association of Agricultural Land Owners was established in 2007 by 7 companies investing in agricultural land. Currently, many of the largest owners of agricultural land in Bulgaria are members of the Association. The total area, owned by all members in the Association is about 3 million acres. The land spreads in more than 2 500 villages around the country. The total number of its members is 39.

Source: https://AGROCLUB.BG

Prices of Land in Productive Regions Have Already Risen Up To 1000 BGN per Acre

Since last year, the price of agricultural land has begun to rise again. According to BAALO data, the appreciation of agricultural land is between 5% and 7%. “Interestingly enough, the lower limit of this growth already represents a minimum of 5% within just one year, which is not at all insignificant. The prices of the productive regions have already risen up to 1000 BGN per acre, and this is only the starting price at which they are negotiated”, states Mr Stayko Staykov, Chairman of the Bulgarian Association of Owners of Agricultural Land (BAALO), in an interview taken by AgroClub.

Traditionally, the most expensive agricultural land is in Dobrudja region, where deals are concluded for about 2000 BGN per acre or even higher. However, there is no serious supply. In the north, there is no longer cheap agricultural land, except for the districts near the Balkan region and Stara Planina Mountains. In the most attractive regions of southern Bulgaria-near Burgas, Stara Zagora, Plovdiv and Pazardjik, the price per acre is between 800-1000 BGN. In some territories of Stara Zagora region there are prices of 1100-1200 BGN/acre, and there are single deals for 1500 BGN/acre. The lowest prices are in Strandja, Sakar, Haskovo and Harmanli, as well as in Kardjali and Smolyan, where arable land is scarce. A similar situation is witnessed along the Struma River, where Greek companies have been working for years. Prices do not go above 1000 BGN per acre, clarifies Mr Staykov.

The owners of agricultural land expect future trends for increased demand for agricultural land because of its limited nature: “In the past year, we actually focused on buying and not on selling land. Now we also continue to buy and limit sales. Another incentive is the low threshold at which agricultural business can be started, especially when it comes to young farmers. We’ve had very good profits, and they’re related to trading agricultural land. Last year, we intentionally abstained from selling taking into account that the price of the land was rising, but we had lower results. “This tendency is known to all our shareholders”, commented BAALO’s Chairman.

According to Stayko Staykov, land prices will continue to rise in the next 10 years despite the development of the CAP. There will be no upheavals such as sharp dips or fluctuations but rather balanced agricultural land demand and supply.

The full text of the interview with the Chairman of the Bulgarian Association of Owners of Agricultural Land (BAALO) – Mr Stayko Staykov, can be found on the website. In addition to discussing the development of the agricultural land market, we are also talking about the problems with the so-called “white spots”, as well as about BAALO’s vision for the efficient use and development of land resources in the context of the new CAP 2021-2027

Source: https://AGROCLUB.BG

The Law On Fuels Is Back To Its Initial Position

The Ministry of Economy, governed by Mr Emil Karanikolov, changed its strategies several times on how and whether, if at all, additional regulations for the petroleum sector are needed

Reporter: Ms Julia Lazarova

The Law was introduced to the National Assembly last year by MPs from all parties headed by Mr Emil Dimitrov-Revizoro, with the main aim of fighting the grey economy in the fuel sector. However, the Law would have incurred more expenses to smaller-sized companies; it would have also restricted participation of new players and thus limit competition. The law entered into force on January 28th. Protests followed, with the president of KRIB Kiril Domuschiev, the owner of Insa Oil, Georgi Samuilov, farmers and mining companies, all strongly opposing it. Ultimately, adjustments were made with the aim of facilitating the requirements for small-size fuel retailers.

In the meantime, amendments to the texts were approved in order to solve the absurd situation incurred to both the mining industry and the construction business, which were suddenly facing the situation of being unable to load their machines underground or on highways under construction, on which petrol stations were yet to be build. The Government decided to postpone the enactment of the law by six months, i.e. on July 1st, by postponing the entry into force of the Ordinance under the law for up to six months deferment. In turn, businesses in this particular sphere must be registered as such up until three months after the law’s official entry into force.

The sectoral Law on Fuels will undergo major adjustments, with many regimes to be significantly alleviated as it becomes clear from the proposals, published by, on the changes in the law on the administrative regulation of economic activities related to oil and products of petroleum origin.

The requirement for wholesalers to be in possession of at least EUR 1 million BGN is to be abolished. Instead, the amount of the minimum capital required, will be differentiated according to the size of the business. Smaller-size retailers will be given the option to have their establishment portable, i.e. modular. As for construction companies, they will be able to supply fuel to both their own and for vehicles rented, as well as for vehicles leased to subcontractors. The above changes are offered shortly before the expiration of the 3-month period for the entry into force of the current Law – October 26th. The current sectoral law on fuel was requested by large companies in the Bulgarian Oil and Gas Association.

In the meantime, however, after “meetings and consultations with representatives of inter branch organizations” of all stakeholders concerned, the current changes were offered by the Ministry of Economic Affairs. The basis for these changes, as quoted by the Ministry, lay on a decision taken by the Commission for the Protection of Competition of March 2019 and on the Commission’s sectoral analysis, which says that the project introduces new and significant barriers to the entry of new market entrants, establishes procedures that create and support monopolies, with prices being dictated by those monopolies and limiting the opportunities of end-users in smaller regions.

It is now proposed that wholesalers have fixed long-term assets, capital paid in advance or security of 200 thousand BGN based on previous year revenue of up to 5 million BGN; 500 thousand BGN based on previous year revenue of up to 20 million BGN and a security of 1 million BGN based on previous year revenue above 20 million BGN.

For retailers, there is no longer a strict requirement that their gas station be permanently attached to a real estate as there is already an option for it to be modular. Builders will be able to supply subcontractors; the proposal comes from the Chamber of Builders in Bulgaria.