official translation

REPUBLIC OF LITHUANIA

PROVISIONAL LAW

ON THE ACQUISITION OF AGRICULTURAL LAND

28 January 2003 No. IX-1314

Vilnius

Article 1. Objective of this Law

1. The purpose of this Law is to ensure rational use of Lithuania’s national property – agricultural land, promotion of land market and competitive agriculture, and creation of conditions for land consolidation.

2. The provisions laid down in this Law shall apply to the acquisition of state-owned, municipal and private agricultural land by way of purchase, exchange or other ways, which are in compliance with the conditions provided for in this Law, except for inheritance and restitution of ownership rights. 

Article 2. Main Definitions of the Law

1. “Agricultural land” means plots of land used or designated for use for the functioning of agricultural enterprises and farmers’ farms, and for the development of other agricultural activities, including farming lands, the land occupied by dwelling houses and farm buildings, yards, roads, the land suitable for transforming it into farming lands and other lands wedged into the said plots.

2. “Agricultural activities” means activities covering the production and processing of products of crop production, livestock farming, poultry farming, game farming, apiculture and internal waters fishery, processing and sales of products produced and processed in one’s own farm, as well as provision of services to agriculture. Production of foodstuffs from agricultural products produced and processed not in one’s own farm or enterprise shall not be deemed to be an agricultural activity.

3. “Rational farm holding” means an area of land held by one farm by the right of private ownership, the size and location of different territories whereof in respect to roads and the centre of the farm create favourable conditions for the development of efficient farming by applying advanced production technologies and in compliance with the requirements of environmental protection. The recommended rational size of an agricultural holding for farms specialising in different activities shall be established by an institution authorised by the Government.

Article 3. Conditions for the acquisition of agricultural land into ownership

1. A natural person may acquire agricultural land by the right of ownership provided he has registered a farmer’s farm under the procedure prescribed by the Law on Farmer’s Farm or has a qualification certificate issued by an institution authorised by the Government, testifying to his preparedness to engage in farming.

2. A qualification certificate testifying to a person’s preparedness to engage in farming shall be issued to persons who have been engaged in agricultural activities for over 2 years and have a diploma or certificate of agricultural education acquired in Lithuania or a European Union member state, or to persons who have been engaged in agricultural activities for over 5 years and have passed a qualification examination in accordance with the procedure established by the Government.

3. The provisions of Paragraph 1 of this Article shall not apply in cases when, after the acquisition of the land, the area of a plot of land held by the right of ownership would not exceed 3 ha of farming land.

4. A natural person who has acquired a plot of agricultural land exceeding 10 ha by the right of ownership in accordance with this Law must, within 1 year, resettle in the county where the land used for farming is located and acquire or get a permit to build farm buildings needed for agricultural activities, and, within 2 years from the acquisition of the land, register a farmer’s farm. The term for resettlement in the county may be extended by the municipal board for a period not exceeding 1 year, provided that the construction of farm buildings or a dwelling house has started.

5. A legal person may acquire agricultural land by the right of ownership provided that it has earned at least 50 per cent of its income from agricultural activities for the 2 preceding years. This requirement shall not apply to the State, municipalities, gardeners’ associations acquiring public land leased to these associations, as well as banks and other credit institutions that take into their ownership the land which is mortgaged, but not sold in the manner prescribed by law.

6. Banks and other credit institutions must sell agricultural land acquired by the right of ownership within 2 years from the date of its acquisition, and lease the land for agricultural activities prior to the sale thereof.

Article 4. Maximum Area of Agricultural Land Being Acquired into Ownership

1. Natural and legal persons may, under this Law, acquire so much land that the total area of agricultural land owned by one person should not exceed:

1) 300 ha for a natural person who has registered a farmer’s farm and has a qualification certificate testifying to his preparedness to engage in farming, except for the cases when the agricultural holding owned by two spouses exceeded the said area as a result of registration of their marriage or when the land was acquired before the entry into force of this Law;

2) 2000 ha for an agricultural company;

3) 1000 ha for a co-operative (co-operative society) or any other legal person who engages in agricultural activities.

2. The provisions of Paragraph 1 of this Article shall not apply to banks and other credit institutions that, in the manner prescribed by law, acquire under the forced sale procedure the land mortgaged to them.

Article 5. Sale of State-Owned Agricultural Land

1. State-owned agricultural land may be sold or otherwise transferred into the ownership of natural or legal persons in only those cadastre locations where restitution of land ownership rights has been completed according to the land reform land survey plans prepared under the procedure established by the Law on Land Reform, except for the transfer of land to municipalities for the performance of the functions set by law and the sale of the land plots, formed in the land reform land survey plans, to individual farm land-users, farmers and agricultural companies which have been using the land for more than 5 successive years, upon expressing their wish to purchase the said land plots.

2. Natural and legal persons acquiring land for the purpose of expanding their farm holding to a rational size shall be entitled to soft credits granted under the procedure established by law.

Article 6. Right of First Priority to Purchase a Plot of Agricultural Land Offered for Sale

1. The right of first priority to purchase state-owned agricultural land offered for sale shall be enjoyed by:

1) the individual farm land-users who have expressed their wish to purchase it – with regard to the land plots, formed in the land reform land survey plans;

2) farmers;  and

3) agricultural companies which have been using the land for more than 5 successive years.

2. Persons who do not enjoy the right of first priority to purchase a state-owned plot of agricultural land, or in the cases where several persons enjoy equal rights of first priority to purchase the same plot of land, shall be sold the plot of land concerned at auction under the procedure established by the Government.

3. Persons who enjoy the right of first priority to purchase a state-owned plot of agricultural land, shall be sold a plot concerned at a price not exceeding the average price of the plots of land sold in that location (land market price).

4. The right of first priority to purchase private agricultural land at the price it is offered for sale and under other same conditions, except for the cases when the sale happens at public auction, shall be enjoyed by:

1) the state, when, according to a prepared detailed plan or other territorial planning document, the land concerned is intended for use for: national defence or protection of the state border; national airports, ports and their facilities; the construction of national railways, national roads and main pipelines, high-voltage electricity lines; constructions of national importance; the development of the infrastructure of cities, towns, and villages; common population needs and municipal needs; public construction and recreation; exploitation of mineral resources explored on public funds; implementation of economic projects of national importance the significance whereof is recognised by a decision taken by the Seimas or the Government;

2) the co-owner of a plot of land when the sale concerns a segment of the plot of land which is held by the right of common ownership;

3) the owner of a neighbouring plot of land provided this person is engaged in agricultural activities;

4) a farmer if the plot of land offered for sale lies within the prospective boundaries of the rational agricultural holding, formed in the land survey plan, of a farm owned by this person;

5) the user of the plot of land offered for sale who has used the land for agricultural activities for at least 2 successive years; and

6) the institution authorised under law or by the Government to take decisions concerning rearrangement of plots of land in accordance with land survey plans provided the plots of land being acquired are necessary for consolidation of the plots of land and for compensation to land owners with the equivalent area of state-owned land in the event of the appropriation of land for public needs.

5. The procedure for exercising the right of first priority set forth in paragraphs 1 and 4 of this Article shall be established by the Government.

Article 7. Preparation of Land Survey Plans Needed for the Formation of Rational Farm Holdings 

Land survey plans needed for the formation of rational farm holdings, for the rearrangement of the layout of plots of land and for the establishment of conditions for the use of land, shall be prepared in compliance with the laws and other legal acts.

Article 8. Liability

1. Land transactions shall be found invalid by courts, if they are concluded not in compliance with the conditions of this Law or if the persons who acquired the land violate the conditions of this Law.

2. Natural and legal persons shall pay taxes set by law for the transfer of the land, acquired under this Law, into ownership of other persons within a 5-year period after its acquisition. Such taxes shall be calculated on the basis of the average price of land plots sold in that locality (land market price).

Article 9. Proposals to the Government

To propose to the Government:

1) to prepare and submit to the Seimas, within three months of the adoption of this Law, draft laws amending other laws, co-ordinated with this Law;

 2) to prepare, by 1 July 2003, legal acts needed for the implementation of this Law; and

3) to prepare, within three months of the adoption of this Law, draft laws amending taxation laws related to the implementation of paragraph 2 of Article 8 of this Law.

Article 10. Entry into Force of this Law

This Law, except for Article 9, shall enter into force on the date of entry into force of the Law Amending Article 47 of the Constitution of the Republic of Lithuania.

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

President of the Republic                                    VALDAS ADAMKUS