Lease of land from KOWR to agricultural cooperatives? Is RSP a multi-family household?

Ziemia z KOWR w dzierżawę dla spółdzielni rolniczych? Czy RSP to gospodarstwo wielorodzinne?

The Ministry of Agriculture and Rural Development finally responded to the request of the National Council of Agricultural Chambers, in which the chambers demanded that agricultural production cooperatives be recognized as "multi-family farms", which would result in them having access to both land and EU funds, on principles similar to those applied are towards individual farmers. However, in the opinion of the ministry, the effects of the proposed changes would be too far-reaching and, as a result, would undermine the interests of family farms guaranteed by the Constitution of the Republic of Poland.

KRIR postulates

In its application to the minister, KRIR proposed introducing changes to the Act of April 11, 2003 on shaping the agricultural system and the Act of October 19, 1991 on the management of agricultural real estate of the State Treasury.

The agricultural local government proposed changing the definition of a family farm (i.e. Article 5(1) of the Act) in such a way that a family farm would be created (in addition to individual farmers) by natural persons associated in agricultural cooperatives. The limit area of 300 ha in the case of farmers associated in cooperatives would apply to each member of the cooperative, and not to the cooperative as an entity. KRIR also took the position that members of agricultural cooperatives should be able to lease or buy land from KOWR according to the principle of area subsidies, i.e. the quotient of land divided by the number of members.

Preferences for cooperatives?

In response, the Ministry notes that the proposed changes would result in the fact that: "cooperative members would not even have to be individual farmers." This would put cooperative members in a better situation because, without meeting a number of conditions (e.g. the condition of having agricultural qualifications), they would have equal access to land with individual farmers.

The Ministry also points out that "in accordance with Article 23 of the Constitution of the Republic of Poland, the basis of the state's agricultural system is the family farm." Taking into account the demands of KRIR "would therefore result in a significant departure from the understanding of a family farm presented above." Meanwhile, the definition of a family farm contained in the Act on shaping the agricultural system was created on the basis of the doctrine and jurisprudence of the Constitutional Tribunal, and "this did not protect it from accusations of insufficient exposure of elements related to the farmer's family."

"Thus, taking into account the postulate of extending the definition of a family farm to include members of cooperatives would be another step in depriving family farms of the "family" features, since natural persons operating within a legal person would be considered a family farm. This could even be interpreted as an outright denial of the principle of Art. 23 of the Constitution of the Republic of Poland." – we read in the response from MRIRW.

Unlimited land purchase

At the same time, the ministry reminds that: "during the last amendment to the Act on shaping the agricultural system, in order to meet the expectations of agricultural production cooperatives, the comment of cooperative circles was taken into account, consisting in modifying Article 2a(3)(1)(h) of the Act. In accordance with the introduced change , agricultural production cooperatives can now purchase agricultural real estate on the private market, without the need to obtain the consent of the Director General of the KOWR and regardless of the area limit (of 300 ha of agricultural land), (see Article 2a(3)(1)(h) of the Agricultural Property Act). "

Lease for a cooperative?

MRIRW also approaches the chambers' postulate that members of agricultural cooperatives could lease or buy land from KOWR according to the principle of area subsidies, i.e. the quotient of the land divided by the number of members. Notes that "due to the Act of April 14, 2016 on suspending the sale of real estate from the Agricultural Property Stock of the State Treasury and amending certain acts, leasing real estate from the Agricultural Property Stock of the State Treasury has become the main method of distributing agricultural land of the State Treasury. In accordance with and pursuant to Article 24(1)(1) of the Act on the Management of Agricultural Real Estate of the State Treasury, KOWR distributes the agricultural land of the Resource with an area of 1 ha or more in the first place to individual farmers (within the meaning of Article 6 of the Act) by way of limited tenders. "for lease"

The Ministry also reminds that "the current wording of the provisions of the Act relating to lease and sale strongly emphasizes the personal relationship of the lessee or purchaser of the Resource's real estate with the object to which he has obtained rights, consisting in the direct management of this real estate and its intended use. "exclusive use, i.e. only as part of the personal running of a farm."

A cooperative member is not always a farmer

Meanwhile – as MRIRW points out – "not every member of an agricultural production cooperative has the status of an individual farmer", because in accordance with the Cooperative Law, "members of a cooperative may be farmers who are owners or independent holders of agricultural land and tenants, users or other dependent owners of agricultural land, as well as other persons with qualifications useful for working in the cooperative.

Therefore, "not every member of an agricultural production cooperative has to be a farmer himself, and being a farmer does not have to meet the conditions qualifying him as an individual farmer."

"Currently, it cannot be considered that mere membership in such a cooperative, in the light of the provisions of the Act on the management of agricultural real estate of the State Treasury and the Act on the Management of Agricultural Property of the State Treasury and the Agricultural Property Act, may constitute the only criterion that members of agricultural production cooperatives should meet in order to participate in limited tenders with the rights of an individual farmer. "- we read in the response of the Minister of Agriculture to the KRIR letter.

Throwing the baby out with the bath water

It is difficult not to notice that the current wording of the Act on shaping the agricultural system is the result of stormy agricultural protests and pressure. It is also difficult not to acknowledge the importance of MRIRW's arguments and reasons in this matter. It is also difficult not to agree with the last one brought by the ministry. Namely, the limited stock of agricultural property of the State Treasury, with the continuing high demand for agricultural land, does not support increasing the limit of the area of agricultural land that can be purchased by one entity.

Therefore, the question arises whether KRIR should carefully consider its request for facilitations for RSP? And did he inadvertently almost "throw the baby out with the bathwater"?