Official translation

REPUBLIC OF LITHUANIA

LAW

ON THE FARMER'S FARM

4 May 1999 No. VIII-1159
Vilnius

CHAPTER I

GENERAL PROVISIONS

Article 1. Purpose of the Law

1. This Law shall establish the legal status, fundamentals of activities, registration procedure, State aid granted to and termination of activities of a farmer's farm (hereinafter referred to as a farm).

2. The State shall create legal and economic conditions of restoration and setting-up of a farm, as well as farming - the grounds for preservation of a mode of life, spiritual and cultural values, and natural resources in the countryside.

Article 2. Main Definitions of this Law

1. "Farm" means a unit engaged in agricultural activities, which is registered in a manner prescribed by this Law.

2. "Farmer" means a natural person who engages in agricultural activities on the farm registered in his name and represented by him.

3. "Members of a farm" means farmer's family members and other persons who participate in the farm activities in the form of continual work and property.

4. "Agricultural activities"- activities of a farm comprising production of products of agriculture, forestry and internal waters economy, processing and sale of the products produced on his own farm, and services rendered for such activities.

5. "Services for agriculture" means activities rendering services for agriculture, forestry and internal waters economy.

6. "Helper"means a natural person who by mutual agreement does unpaid work on the farm.

Article 3. Legal Status of a Farm

1. A farm shall have no rights of a legal person. Under the obligations of the farm, a farmer and his family members shall be liable jointly, with the exception of the property against which, under laws, execution may not be levied in satisfaction of the creditors' claims. Under the obligations of the farm, other members of the farm shall be liable to the extent of the joint property, which they produced by their work and with their funds. The farm shall not be liable under its members' obligations unrelated to the activities of the farm.

2. A farmer may keep accounts with banks of the Republic of Lithuania and foreign states.

CHAPTER II

RELATIONS OF MANAGEMENT, USE AND DISPOSAL OF

THE PROPERTY OF A FARMER AND FARMER'S FAMILY MEMBERS

Article 4. Property of a Farmer and Farmer's Family Members

1. Property attributed to a farm shall be land, forests, internal waters and other real estate which belongs to a farmer by the right of ownership, as well as to his family members and other members of the farm by the right of ownership and which the said persons transfer on a contractual basis for management and use by the farm. Property managed and used on rent and other contractual bases shall be attributed to the farm property.

2. Instruments of production, agricultural raw materials, produce, income received and other property created by work or with funds of the members of the farm shall be joint ownership of the members of the farm. In the event of a dispute, the court shall establish a manner of parcelling out the property, amount of the share and time limits for parcelling out.

3. Property produced during farming of a farmer and its spouse shall belong to them both by the right of joint ownership, unless otherwise agreed by the spouses or established by laws related to marriage and family. Only that share of the farm property shall belong to the children (adopted children), parents (adoptive parents) of the farmer, which they have produced by their work or with their funds on the farm.

Article 5. Rights of a Farmer and Members of the Farm

A farmer shall conduct farm business, conclude contracts and other transactions related to farm business. Farm interests may be represented by a member of the farm or another person authorised by the farmer.

Article 6. Land Used by a Farm

1. Ownership, rent and other relations pertaining to the land used by a farm shall be established by the Law on Land, Law on the Leasing of Land, other laws and the Civil Code.

2. A land holding belonging to a farmer and members of the farm may not exceed 150 hectares, except for the cases when, upon registering a marriage, a land holding possessed by the right of ownership of both spouses exceeds the said area of land or land was acquired prior to coming into force of this Law. An area of rented land shall not be limited.

3. Land of the farmer and (or) members of the farm used by the right of ownership on the farm may be taken for public needs only in accordance with the procedure established by law. Upon owner's request, a plot of land of equal value shall be given or it shall be justly compensated in another manner.

CHAPTER III

BASIS OF ACTIVITIES OF A FARM

Article 7. Spheres of Activities of a Farm

Agricultural activities and processing, selling of products grown on the farm and rendering of services for agriculture without establishing an enterprise shall be permitted on the farm, as well as other activities in Lithuania and outside its borders which are not prohibited by laws.

Article 8. Conditions for Activities of a Farm

1. State and local authority institutions and officers may not, by their decisions or actions, restrict activities of a farm otherwise than in cases and manner prescribed by laws.

2. The Government shall establish the procedure of accounting of activities of a farm.

Article 9. Work on the Farm

1. A farmer shall not conclude employment contracts with members of the farm and helpers.

2. A farmer shall conclude employment contracts with hired natural persons. Labour laws shall apply to such persons.

3. Under-age children of a farmer and members of the farm may, when free from attending school, do various farm works compatible with their age, if that does not violate child's rights.

4. A farmer shall pay compulsory health insurance contributions and compulsory state social insurance contributions for himself and adult members of the farm in accordance with the procedure established by the Law on Health Insurance and the Law on State Social Insurance.

Article 10. Relations between a Farm and State and Local Authority Institutions

1. A farmer shall furnish to State and local authority institutions information established by laws.

2. Compliance with the requirements related to labour relations, safety at work, sanitation, fire protection, environmental protection, fight against animal and plant disease agents, pests and weeds on the farm shall be controlled by State and local authority institutions in a manner prescribed by legal acts.

3. Inspection and auditing of activities of a farm shall be permitted only in the cases provided for in laws.

4. Damages caused to the farm by State and local authority institutions and officers shall be compensated in a manner prescribed by laws.

CHAPTER IV

REGISTRATION OF A FARM AND TERMINATION OF ACTIVITIES

Article 11. Registration of a Farm

1. Natural persons competent according to civil laws may register a farm.

2. At least 1 hectare of farmland must be in the land holding of a farm which is being registered (apart from the land leased to other persons), and if there is less than 1 hectare of farmland in the land holding of a farm, the sum of income received from the activities of the farm within a calendar year, which amounts to the sum equal to not less than 40 minimum living standards, must be declared. Income of the farm from agricultural activities must amount to not less than 50 per cent of all the business income received within one year. If a farm is also engaged in rural tourism, crafts, income from agriculture must amount to not less than 25 per cent of all the business income received for one year.

3. The following documents shall be submitted in order to register a farm:

1) an application to register a farm;

2) copies of documents of land ownership or land rent of a farmer or members of the farm;

3) a list of members of the farm;

4) data on income received from agricultural activities, if an area of farmland is less than 1 hectare.

4. A farm shall be registered in the under farmer's name.

5. The Ministry of Agriculture shall establish contents and form of farm registration documents and a concrete registration procedure.

6. Regional departments of agriculture shall register farms in the Register of Farmer's Farms.

7. A farm must, not later than within 15 days from presenting documents for registration of a farm, be registered or a reason for denying registration of a farm must be indicated in writing to an applicant. Denial of registration of a farm may be appealed against to the county governor. Such complaint must be considered not later than within l month. If the applicant does not agree with the adopted decision, he may appeal against it to the court.

8. Upon the registration of a farm, a farmer shall, not later than within 5 days, be issued a farm registration certificate.

9. If the information specified in the documents submitted for registration of the farm change, the farmer must, within one month from the moment such changes appear, submit documents confirming the changes to an institution registering farms.

Article 12. Termination of Activities of a Farm and Removal from the Register

1. Farm activities shall be terminated:

1) by decision of a farmer and members of the farm;

2) when there are no farmer and members of the farm left;

3) upon having changed the purpose of the use of land intended for agriculture.

2. A farm shall be removed from the Register:

1) upon the termination of activities of a farm in the cases laid down in paragraph 1 of this Article;

2) when a farm is integrated in another farm;

3) if the indices provided for in paragraph 2 of Article 11 of this Law are not retained and they are not re-established.

3. Disputes related to termination of activities of a farm, removal of a farm from the Register of Farmer's Farms, and farm property shall be resolved judicially.

CHAPTER V

STATE AID TO THE FARM

Article 13. State Aid to the Farm

1. Farms which in accordance with the procedure established by the Government or an institution authorised by it, are attributed to full or partial employment farms and registered in a manner prescribed by this Law, shall have the right to use State aid. State aid shall be established by the Law on State Regulation of Economic Relations of Agriculture and other legal acts.

2. State aid shall be granted for restoration of a farm, setting-up of a farm and its activities, giving priority to the farms in which the persons under 40 years of age and university or other agricultural school graduates are farming.

3. The Government shall establish conditions and procedure for granting State aid, unless otherwise prescribed by laws.

4. Farmers shall pay taxes on land and (or) land rent. Appropriate tax laws shall establish taxes and tax reliefs for farms. Farm income shall not be subject to taxation.

5. Health insurance and state social insurance reliefs shall be applied to a farmer and members of the farm in accordance with the procedure established by the Law on Health Insurance and the Law on State Social Insurance.

6. A member of the farm, who is the only person with capacity for work on the farm, shall not be conscripted into military service.

CHAPTER VI

FINAL PROVISIONS

Article 14. Proposals to the Government

The Government shall, before 1 September 1999, draw up drafts of laws on amendments and supplements to the laws related to this Law, and adopt legal acts necessary for implementation of this Law.

Article 15. Coming into Force of the Law

Upon coming into force of this Law, the Law on the Peasant's Farm of the Republic of Lithuania, and the Resolution of the Supreme Council of the Republic of Lithuania on the Procedure of Implementation of the Law on the Peasant's Farm of the Republic of Lithuania shall become invalid.

I promulgate this Law passed by the Seimas of the Republic of Lithuania.

president of the republic                           VALDAS ADAMKUS