Farmland grabbing in the EU

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Farmland grabbing in the EU A call to reform
European land governance Sylvia Kay and
Jonathan Peuch Transnational Institute
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Structure of the Presentation

1. Farmland grabbing in the EU
2. Key drivers of farmland grabbing in the EU
3. The state of the land in Europe today
4. Reforming European land governance options for
   change

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1. Farmland grabbing in the EU

• A. Methodological challenges
• Contested definitions of land grabbing
• Lack of transparency and other data-gathering
  issues around land deals
• An excessive focus on the foreignisation of
  land
• An assumption that Europe is situated outside of
  the global land grab
• B. In the context of the study, land grabbing is
  associated with land deals which
• Are out of standard European proportions
• Involve the capturing of decision-making power
  over land
• Imply an extra-economic force
• Represent a deep rupture with the European model
  of family farming and the structural goal of a
  diversified and multifunctional agricultural
  system.

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• C. Preliminary findings
• The Land Matrix database has recorded large-scale
  land deals involving foreign capital in the EU
  totaling 166,359 ha as of March 2015. This is
  however likely to be a vast underestimation.

• Supplementary evidence from the Factor Markets
  research series and the 13 country case studies
  collected in the book published by TNI for the
  Hands Off the Land alliance indicates that
  significant tracts of land, beyond those recorded
  in official databases, are controlled by foreign
  investors e.g. through pocket contracts in
  Hungary and dummy buyers in Poland.

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• C. Preliminary findings

• Farmland grabbing in the EU is uneven and is
  particularly, though not exclusively,
  concentrated in Eastern European MS.
• Many of these deals involve new sets of actors
  e.g. from the financial sector as well as a
  rising class of land deal brokers such as the
  arendatori in Bulgaria.
• The new deals may involve the construction of
  large agro-holdings, some of them of an
  unprecedented scale.
• In global terms, farmland grabbing in the EU is a
  limited but creeping phenomenon, particularly as
  it may interact with land grabs skirting the EUs
  borders.
• There is also a danger that farmland grabbing
  will lock forces with ongoing process of land
  concentration in the EU. This suggests that the
  ongoing (generic) trend of farmland concentration
  is just as problematic and deserving of policy
  attention as farmland grabbing.

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2. Key drivers of farmland grabbing in the EU

• Common Agricultural Policy (CAP)

Member State The top x of beneficiaries Received x of the CAP direct payments in 2013  
France 1,2 9  
Spain 1,3 23,4  
Germany 1,2 28,4  
Italy 0,8 26,3  
UK 0,9 14,4  
Poland 2,0 28,5  
Romania 1,1 51,7  
Hungary 0,9 38,5  
Bulgaria 1,1 45,6  
Source EC (2015) Source EC (2015) Source EC (2015) Source EC (2015)

• The CAP has an important effect on the EU land
  structure because land is one factor of
  production of the agricultural sector.
• The distribution of direct payments, before the
  last reform, has encouraged the concentration of
  subsidies and of lands.

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Variation between 2003-2005 and 2005-2010, in
of farm size class
Source Agrosynergie (2013)

• The CAP has created a dualistic model of farming
  smaller farms exit the market whilst larger farms
  grow.
• In general, it has encouraged an industrial model
  of farming which, in key aspects, weakens the
  socio-economic sustainability and bio-material
  foundations of EU agriculture and the rural
  sector as well as possible resistance to
  processes of farmland grabbing.

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• B. The commodification of lands through the
  internal market
• The internal market is based on the principle of
  free movement of goods, services, persons and
  capital.
• It aims at removing restrictions on economic
  transactions, including land transactions.
• Land is considered by the ECJ as an immobile good
  which requires the free movement of capital to be
  bought and sold.
• The allocation of resources is thus supposed to
  be optimal.

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3. The state of the land in Europe today
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• A model which poses latent, if not direct,
  threats
• Fragility of large, corporate agricultural
  enterprises
• Increasing financialisation of European
  agriculture
• Problems of entry denial loss of employment
  opportunities and economic vitality in rural
  areas soil erosion, land and resource
  degradation as well as loss of biodiversity.
• Erosion of European food sovereignty
• Europe without defences
• No early warning system in place e.g. a European
  Land Observatory
• Still limited and underdeveloped restrictions to
  the principle of the free movement of capital.

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4. Reforming European land governance options
for change

1. Using the Tenure Guidelines (TGs) in Europe

• .

• The Tenure Guidelines are the first international
  legal instrument to apply a human rights based
  approach to the governance of tenure.
• The EU has approved the TGs, it must now
  implement them, also at home. This can be done
  e.g. through an EC Recommendation on Land, to be
  implemented by MS through a series of EU
  Directives based on the four horizontal
  frameworks through which the EC can act depending
  on how land is considered as farmland (CAP), as
  an economic asset (Internal Market), a living
  space (Territorial Cohesion) or an environmental
  public good (Land as a Resource).

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• B. CAP A best-case scenario

Element of CAP 2013 toolbox Recommendation
Redistributive payment adopt with the highest share of Pillar 1. The CAP post-2019 could include a compulsory redistributive payment (by hectare capping or in function of number of hectares
Capping of payments capping of the basic payment above EUR 150,000 by applying a 100 reduction setting up a lower capping at EUR 100,000.
Small farmer scheme Using to the fullest extent possible i.e. 2 of the national envelope
Young famer scheme adoption of this scheme at the maximum level of 1,250 p.a. consider adjustment of scheme to an exclusive top-up e.g. 5-10 of Pillar 1
Definition of active farmer EC and MS to adopt a definition of an active farmer which is clearly anchored in the notion of work on the farm.
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• C. Restrictions to the principle of the free
  movement of capital
• A land market based only on the four freedoms is
  not comprehensive enough to tackle the risk of
  discrimination and marginalisation related to
  farmland grabbing.
• We recommend allowing MS to regulate farmland
  investments, and call on the ECJ to show greater
  flexibility in its interpretation of national
  measures that can be undertaken to restrict the
  free movement of capital according to justifiable
  political objectives.
• A number of MS have already adopted a number of
  positive measures in this direction e.g. SAFER
  system in France.
• The EC has also recognised that (farm)land is
  much more than just a commodity/factor of
  production through its Territorial Cohesion
  policy and the ongoing Land as a Resource
  process.
• All these elements should be further developed
  and strengthened to stop farmland grabbing in the
  EU and to realise the democratic, sustainable and
  smart land governance that European farmers and
  citizens deserve.

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Thank you! Transnational Institute
(TNI) www.tni.org