European Parliament study on farmland grabbing calls for a reform of European land governance

This study published May 2015 was requested by the European Parliament’s Committee on Agriculture and Rural Development.

Executive Summary

This study examines the issue of farmland grabbing in the EU.

Europe is largely believed to be situated outside of the “global land grab”, the popular term to describe the rising global interest in farmland and the increase in large-scale land deals world-wide. This study counters this suggestion by showing that there is significant, albeit partial, evidence that farmland grabbing is underway in the EU today, as measured by the degree of foreign ownership of land, the capturing of control over extended tracts of land, and the irregularities that have accompanied various land transactions. The scale and scope of farmland grabbing in the EU is however limited when compared to countries in Africa, Asia, Latin America and former Soviet Eurasia, with preliminary evidence indicating that farmland grabbing is concentrated in particular in Eastern European Member States.

Farmland grabbing in the EU involves a heterogeneous set of actors including foreign and domestic, state and non-state, natural and legal persons. In addition to the establishment of large, corporate agricultural enterprises in Europe with the involvement of capital from all over the world, the rush for land has seen a new class of financial investor, not traditionally involved in the agricultural sector and made up of banking groups, investment funds, individual traders, and private equity companies, involved in farmland acquisition in the EU. Farmland grabbing in Europe also involves a new set of “land deal brokers ” made of speculators and scammers who mediate corporate and state interests in land

These diverse set of actors reflect the multiple drivers of farmland grabbing in the EU including: differential land prices throughout the EU which have encouraged speculation and processes of ‘land artificialisation’ ; the unintended consequences of land reforms, land privatisation and land consolidation programmes in Eastern European Member States; the link between control over land and access to payments under the Common Agricultural Policy (CAP); and a variety of other EU policies linked to food, energy, trade, finance and investment.

The study argues that the impacts of farmland grabbing, which remains a limited phenomenon in Europe, must be placed within the context of broader structural changes within the EU agriculture. Against the backdrop of dramatic levels of land concentration and the rapid exit of Europe’s small farms, farmland grabbing, through its control, privatisation and/or dispossession of natural resources, has become an active factor in the further weakening of the socio-economic and environmental vitality of the rural sector. It is leading to the further erosion of Europe’s model of family farming based on a sustainable and multifunctional form of agriculture and blocking the entry into agriculture of young and aspiring farmers. This has real implications for European food security, employment, welfare, and biodiversity as with the demise and marginalisation of small-scale farming in Europe, the multiple benefits of this type of farming system and way of life are also eroded.

It is in this sense that the study draws broader connections between the ongoing but limited process of farmland grabbing in the EU and other burning land issues in Europe today. It makes a strong case that the ongoing (generic) trend of farmland concentration in Europe is just as problematic and deserving of policy attention as farmland grabbing. Not only does the highly skewed distribution of land in Europe conflict with the EU’s structural goal of dispersed land ownership, it has the danger of introducing profound disequilibria in European society as a whole. This study therefore challenges the notion that the ‘land question ’ in Europe is closed. On the contrary, we have a pressing land problem in Europe concerning the access to, control over, and use of land .

With this background in mind, the study offers the following specific recommendations addressed to EU policy makers for regulating farmland grabbing in the EU. These are linked to the four horizontal frameworks  (Internal Market, Agriculture, Environment, and Territorial Cohesion) upon which regulation at EU level is possible:

1. Internal market:

• We recommend that the EU should allow Member States greater freedom to regulate the sale and lease of farmland within their territory, and call upon the European Court of Justice to show greater flexibility in its interpretation of the principle of the free movement of capital. A land market based only on the four freedoms (free movement of goods, persons, services and capital) is not sufficient to deal with the risk of discrimination and marginalisation related to sensitive issues surrounding the access to, control over, and use of farmland. Justifiable restrictions to the principle of the free movement of capital,  in line with sound political objectives that are in the public interest, should be deepened and enlarged to allow Member States greater regulatory control.

• There are a number of policy options that Member States may consider in this respect including setting upper limits for the acquisition of agricultural land and to create a system of pre-emptive rights to help those whose landed property is below this upper limit. Member States should also support the use of land sharing arrangements and land banks which support access to land for small, young, and aspiring farmers.

• To facilitate Member States in regulating farmland within their territory, we recommend the development at EU wide level of new data collecting instruments on patterns of land tenure in Europe. The creation of a European Observatory,  as proposed by the Peasant’s Trade Union amongst others, that would document shifts in land ownership and include important economic, social and environmental criteria could be an important step towards developing a truly pan-European and socially relevant database on the state of the land in Europe today.

2. Adjustments to the 2013 CAP toolbox

• To break the link between the concentration of land and the concentration of subsidies, Member States should implement adjustments to the 2013 CAP toolbox which aim at empowering small farmers and ‘de-concentrating’ the land market  in order to curtail farmland grabbing. To do this, we recommend the European Commission and Member States to:

–  set the rate of internal convergence of payments to 100%

–  adopt the redistributive payment as soon as possible and with the highest share of Pillar 1

–  capping the basic payment above EUR 150,000 by applying a 100% reduction in payments and consider the possibility of setting up a lower capping at EUR 100,000

–  make use of the young farmer scheme to the fullest extent possible, that is, using the 2% of the national envelope for any new exploitation regardless of its size

–  make use of the small farmer scheme at its maximum allowable level of €1,250 and consider raising the maximum to more fully meet the needs of Europe’s small farmers

–  monitor the application of the CAP’s new greening policies

–  use coupled payments to strengthen sectors in difficulty

–  adopt a definition of an active farmer which is clearly anchored in the notion of work on the farm. The current exemption threshold of EUR 5,000 must be revised down as it excludes many of the smallest producers, particular in the NMS

3. Environment

• We recommend the adoption of environmental regulation at EU level to tackle the effects of land degradation arising from farmland grabbing based on a model of industrial agriculture. From this perspective, we encourage the further development of the Land as a Resource  process.

4. Territorial cohesion

•  We recommend that the Territorial Policy of the European Union should take into account the diversity and the richness of the rural areas and integrate marginal rural areas into broader development strategies that strive towards a balanced territorial development, both between the economic, social, environmental and cultural functions of a territory and between urban and rural spaces.

5. Implementation of the Tenure Guidelines in the EU

• We recommend adopting a clear political orientation at the EU level on land through the crafting of a legal instrument. This could take the form of an EC Recommendation on Land, to be implemented through a series of EU Directives  based on the four horizontal frameworks (Internal Market, Agriculture, Environment and Territorial Cohesion) which would aim at a comprehensive, holistic and human rights based approach to land. This would set out a strong and ambitious vision for the governance of (farm)land in the EU while offering Member States sufficient room for manoeuvre and flexibility in interpretation.

• We recommend using the Tenure Guidelines for improving land governance in the European Union  and informing the development of an EC Recommendation on Land. Implementation of the Tenure Guidelines must take into account the competences of the EU and of the Member States.

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