Банкеръ Weekly

Briefs

LEASE CONTRACTS FOR AGRICULTURAL LAND UP 82 PER CENT

Closed contracts for granting agricultural land on lease against ground rent rose by more than 82% in 2004 as compared to the previous year. Their total number reached 264,000, and 363,000 tenant farmers cultivate 5.6 million dca of leased land. This trend will persist until the price of land in Bulgaria goes up at least twice, experts are adamant. Now the average weighted value per decare is BGN306. That is why most owners are not willing to sell. Like land prices, ground rents vary in quite a wide range. Land owners get between BGN2/dca to BGN50-60/dca annually, depending on the quality of plots and the crops. In certain cases the ground rent is much higher and the rent can be paid on a monthly basis as well. Contracts in the regions of Blagoevgrad, Silistra and Haskovo, reach BGN15,000 per year, according to data of the Ministry of Agriculture and Forestry. The average ground rent on an annual basis, however, is about BGN10/dca.Until recently the preferred form of payment was cash plus a rent in kind (a percentage from the yield). As of 2003, however, most tenant farmers are gradually orientating to payments in cash, which is the easier way as more than 85% of the land owners do not live in the regions where there land is.Presently, the situation is the best in the central part of Northern Bulgaria - in the region of Veliko Turnovo and Pleven - where almost 30% of all rented land in the country is situated. Dobroudja comes next, where also 30% of the land is granted on lease. The regions of Pernik, Kyustendil and Blagoevgrad are the least developed in that respect.

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