AGRICULTURAL LAND ROMANIA: Leasing your farm land can bring you profit

Romanian Government will offer 30 to 100 euro/hectare to people, aged over 55, willing to lease their farm land.

People, aged over 55 and who are willing to lease their farm land for a period of 5 to 15 years, will receive 30 to 100 euro/ hectare from Romanian Government. Ministry of Agriculture and Rural Development drafted a bill that will enable people to receive also 200 euro/ hectare if they decide to sell their farm land.

The amounts are divided as follows: for a 5 years lease of the farm land the owner will receive 30 euro/ hectare, 50 euro/ hectare will be attributed to owners that are willing to lease their land for 10 years and 100 euro/ hectare will be received by people who lease their farm land for 15 years, according to the legislative bill. The amounts are offered just once for selling and for maximum 15 years for leasing. Regarding leasing conditions, the amounts won’t be offered after the owner’s 70th birthday.

Eligibility criteria

To benefit from these amounts, people who decide to lease their farm lands need to be at least 55 years old and to be at least 10 years younger than the mandatory retirement age. Furthermore, they need to definitely stop any commercial farming activity on conceded land. The assignors have to come under pensions system and other social insurances and they have to have full rights over the ceased land. There are also exemptions for people retired as a result of a disease, degree I and II, regardless their age and that are able to legally prove their working incapacity.

The legislative bill aims to stimulate merging of farming lands by supporting also judicial spending, land registration, real estate advertising and guaranteeing loans for buying those lands. The law will forbid changing the designation of the leased land for at least 5 years after the contract expires and for 10 years from the date the land is sold.

The financial help will be blocked if the leasing contract will cease before established dead-lines. If the cease of the contract is due to the assignor, he will be forced to return all the amounts received until that date. If the owner deceases, its heirs will receive the amount for the year of owner’s death.

A country of small farms

Both the bonus received for leasing the farm land and for judicial spending will be received for over 50 hectares of leased land. Financial resources necessary for paying the bonuses and for guaranteeing the loans will be provided by Ministry of Agriculture and Rural Development and the amounts needed to pay for judicial services, land registration and real estate advertisement will be provided by Ministry of Interior and Administration through money received from governmental budget.

Romania has many small farms and too little big farms. Furthermore, labor force in farming activities is ageing, with over 50% of people involved in these activities aged over 45. About 60% of eligible farmers regarding the land area required are aged over 60 and those who have eligible age do not have the required land area.
3.9 million private farm lands, respectively 17,700 legal entities use 65.2%, respectively 34.8% of farm land in Romania, according to 2009 Statistic Yearbook data.

In the same time, farms with surfaces between one and 10 hectares represent 93.5% from the total number of farms and only 32.3% from eligible surface for direct payments. Farms with 10 to 100 hectares are only 5.4% from total and own 15.5% of eligible surface and farms with over 100 hectares represent 1.1% of total but exploit 52.2% of eligible surface.