On 1 May 2004, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia joined the European Union (EU) in its largest and most significant expansion to date. On 1 January 2007, the two accession countries, Bulgaria and Romania, are expected to join the EU, though this can be postponed until 2008. Other countries from Central and Eastern Europe are likely to be admitted to the EU in due course. Croatia has been granted the status of candidate country. A process has started that could eventually lead to EU membership for Albania, Bosnia and Herzegovina, The former Yugoslav Republic of Macedonia, and Serbia and Montenegro (including Kosovo). The EU has a long tradition of offering membership to countries with the intention of strengthening democracy and the rule of law in them, and the present expansion into Central and Eastern Europe should be seen in this context.
EU membership has profound implications for all parts of a country's economy, as well as for its relationships with the other countries in Europe and its internal political structures. Members of the EU must be democracies governed by the rule of law and which guarantee human rights. They must have functioning market economies able to withstand the competitive pressures that EU membership brings, and governmental structures capable of discharging the wide range of obligations imposed on EU Member States. Countries joining the EU are obliged to adopt a wide range of laws in order to harmonize their legal structures with those of the EU.
This note is concerned with only one limited aspect of entry into the EU, namely, the impact on land tenure. The EU is a single market in which citizens and companies in any Member State are free to work, invest or set up businesses in any other Member State. No Member State, therefore, may place discriminatory restrictions either on where its citizens and companies are permitted to invest or on the investments made in it by citizens or companies from elsewhere in the EU. Such restrictions can also impede the free mobility of workers and businesses. Therefore, membership of the EU is not compatible with discriminatory constitutional or other restrictions on the assets that can be owned by foreigners from elsewhere in the EU.
A number of the new EU members from Central and Eastern Europe had restrictions on the ownership of agricultural land by foreigners, and sometimes also on its ownership by domestic companies. The countries that joined the EU in 2004 and those that will join in 2007 have generally been granted transitional arrangements with respect to the opening up of their land markets. However, it is likely that there will be profound changes in land ownership and land tenure when these transitional arrangements expire. Persons and companies from elsewhere in the EU may seek to acquire farmland, forests and rural housing. EU membership will add further pressures on the rural land markets to those that have resulted from the transition from centrally planned to market economies. The new Member States will need appropriate land tenure policies with which to respond to these pressures as well as tools that will enable them to formulate an accurate picture of what is taking place in their land markets.
Applicant countries must adopt the body of EU law known as the acquis communautaire. This contains obligations across the range of government activities. There are three specific requirements that have a direct bearing on land tenure. Under Chapter 7 of the acquis, which is concerned with agriculture, Member States must contribute data to the Farm Accountancy Data Network (FADN). This requires them to establish a survey of farm-level accounts of revenue, expenditure, inputs and outputs. Chapter 12 (Statistics) requires Member States to conduct a comprehensive survey of agricultural holdings - an agricultural census - once every decade, with three interim surveys per decade, to produce data on the structure and typology of agricultural holdings. The data collected for both FADN and the agricultural census must include information about the amount of the utilized agricultural area (UAA) under owner occupation, sharecropped and tenanted.
Member States of the EU are responsible for administering the Common Agricultural Policy (CAP). This has recently changed from being a system for supporting agricultural production to one of providing direct income support for those working the land based upon the amount of land. Central to CAP payments is the Integrated Administration and Control System (IACS), which is intended to ensure that the payments made are correct and traceable. This requires Member States to establish Land Parcel Information Systems (LPISs) that identify each parcel of farmland. These systems contain data about the location and size of each parcel so that it can be checked whether only one claim has been made for each parcel, that the claim is for the correct amount, whether it has been made for eligible land, and whether it has been made by a farmer who is entitled to receive the payment.
Both FADN and the agricultural census produce information based on farm holdings. The FADN data are particularly useful for analysing the relationship between land tenure and agricultural costs, revenues, production and finances. Because FADN data are derived from a sample, comparisons of land tenure over time and between areas are better achieved through the agricultural census data. IACS is capable of generating parcel-level information on farmland, but does not produce land tenure data, and hence the information about parcels has to be merged with tenure data from other sources. However, IACS is of particular value in spatial planning because of its ability to provide georeferencing of farmland parcels. While membership of the EU is likely to create problems for the land markets of the new Member States, it also provides some powerful tools to monitor and understand the changes that are taking place and to inform the development of land tenure policy.