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8.4.2011 Official
Journal
of
the
European
Union L
94/31
COMMISSION DECISION
of 7 April 2011
extending the transitional period concerning the acquisition of agricultural land in Latvia
(Text with EEA relevance)
(2011/226/EU)
THE EUROPEAN COMMISSION,
the EU-15). The transitional period was also designed to
ease the process of restitution and privatisation of agri
cultural land to farmers. In its Report of 16 July 2008 on
the Review of the transitional measures for the
Having regard to the Treaty of Accession of the Czech Republic,
acquisition of agricultural real estate set out in the
Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland,
2003 Accession Treaty (hereinafter the ‘Mid-Term
Slovenia and Slovakia,
Review of 2008’), the Commission has already
emphasised the importance of the completion of the
above-mentioned agricultural reform by the end of the
foreseen transitional period ( 1 ).
Having regard to the Act of Accession of the Czech Republic,
Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland,
Slovenia and Slovakia, and in particular Chapter 3 of Annex
VIII thereto,
(4)
According to data available to Eurostat, agricultural land
prices in Latvia are lower than the agricultural land prices
in the EU. Complete convergence in agricultural land
Having regard to the request made by Latvia,
sales prices was neither expected nor seen as a
necessary pre-condition for terminating the transitional
period. Nevertheless, the noticeable differences in agri
cultural land prices between Latvia and EU-15 are such
Whereas:
that they can hinder smooth progress towards price
convergence.
(1) The
2003
Act
of
Accession
provides
that
Latvia
may
maintain in force, under the conditions laid down
(5) Similarly
to
the
levels
of
agricultural
land
prices,
the
data
therein, for a 7-year period following the accession,
from Eurostat show that the gap in per capita GDP in
expiring on 30 April 2011, prohibitions on the
Purchasing power standards in Latvia and EU-15 still
acquisition of agricultural land by natural and legal
persists. Thus, existing agricultural land prices in Latvia
persons from other EU Member States who are neither
are high for the Latvian residents relative to their
established nor registered nor having a branch or an
purchasing power.
agency in Latvia. This is a temporary exception to the
free movement of capital as guaranteed by Articles 63 to
66 of the Treaty on the Functioning of the European
Union. This transitional period may only be extended
(6) The
lower
competitiveness
of
the
Latvian
agricultural
once for a period of up to 3 years.
sector compared to the agricultural sector in EU-15
also persists and the problem is compounded by
difficulties in access to financial resources and by high
interest rates applied to commercial credit lines for the
(2) On
6
December
2010,
Latvia
requested
to
extend
the
acquisition of agricultural land (15 % per annum in 2009
transitional period concerning the acquisition of
according to data supplied by the Latvian authorities).
agricultural land by 3 years.


(3)
The main reason for the transitional period was the need
(7) Moreover,
according
to
data
supplied
by
the
Latvian
to safeguard the socioeconomic conditions for agri
authorities based on the State Land Service of Latvia, as
cultural activities following the introduction of the
of 1 January 2010, the agricultural land constitutes
single market and the transition to the Common Agri
37,7 % of the country’s total territory, and forests areas
cultural Policy in Latvia. In particular, it aimed to meet
cover 45,8 % of it. In 2007 62 % of agricultural land was
concerns raised about the possible impact on the agri
owned by farmers and 26,6 % of it was rented. While
cultural sector of liberalising the acquisition of agri
agricultural land in Latvia is already predominantly in
cultural land due to initial large differences in land
private hands, the process of restitution of ownership
prices and income compared with Belgium, Denmark,
rights and the land reform in rural areas are still not
Germany, Ireland, Greece, Spain, France, Italy,
completed.
Luxembourg, the Netherlands, Austria, Portugal,
Finland, Sweden and the United Kingdom (hereinafter
( 1 ) COM(2008) 461 final, 16 July 2008.

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L 94/32
EN
Official Journal of the European Union
8.4.2011
(8) The
lack
of
clarity
on
property
rights
inevitably
hinders (13) Since
the
open
single
market
has
always
been
at
the
land transactions and consolidation of agricultural
heart of the European prosperity, an increased inflow
estates. Land fragmentation, in turn, further contributes
of foreign capital would bring along potential benefits
to lower competitiveness and leads to less market-
also for the agricultural market in Latvia. As emphasised
oriented farms. In this context, Eurostat data show that,
in the Mid-Term Review of 2008, foreign investment in
although gradual consolidation of land is ongoing and
the agriculture sector would also have important long-
the average exploited agricultural area per farm in Latvia
term effects on the provision of capital and know-how,
increased from 10 ha to 16 ha per farm between 2001
on the functioning of land markets and on agricultural
and 2007, the latter is still lower than in other EU
productivity. The progressive loosening of the restrictions
Member States, such as Denmark, Germany and
on foreign ownership during the transitional period
Sweden, where this average amounted to 60 ha, 46 ha
would also contribute to preparing the market for full
and 43 ha respectively in 2007.
liberalisation.
(9) The
recent
global
financial
and
economic
crisis
also
had
a (14) For
the
purpose
of
legal
certainty
and
in
order
to
avoid
a
negative impact on Latvia’s economy. The lack of
legal vacuum in the national legal system of Latvia after
demand followed by a sharp reduction in purchase
the expiry of the current transitional period, this Decision
prices for agricultural products, at the time when the
should enter into force on the day of its publication in
prices for raw materials remained at the high level of
the Official Journal of the European Union,
2008, additionally aggravated the already disadvantaged
position of Latvian farmers compared to farmers from
EU-15.
HAS ADOPTED THIS DECISION:
(10) Against this background, it may be anticipated, as do the
Latvian authorities, that the lifting of the restrictions on
Article 1
1 May 2011 would exert pressure on the land prices in
The transitional period concerning the acquisition of agricultural
Latvia. Therefore, a threat of serious disturbances on the
land in Latvia referred to in Chapter 3 of Annex VIII to the
Latvian agricultural land market upon the expiry of the
2003 Act of Accession shall be extended until 30 April 2014.
transitional exists.
Article 2
(11) An
extension by 3 years of the transitional period
referred to in Chapter 3 of Annex VIII to the 2003
This Decision shall enter into force on the day of its publication
Act of Accession should therefore be granted.
in the Official Journal of the European Union.
(12) In
order
to
fully
prepare
the
market
for
liberalisation,
it
Done at Brussels, 7 April 2011.
continues to be of utmost importance, even amid adverse
economic circumstances, to foster the improvement of
factors such as credit and insurance facilities for
For the Commission
farmers, and the completion of the agricultural structural
reform during the transitional period, as already
The President
emphasised in the Mid-Term Review of 2008.
José Manuel BARROSO

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