Land Turnover Locked in for Another 5 Years?
Summary:
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In Poland, 9% of people employed in agriculture produce about 2.5% of GDP, with the result understated by small farms. Taking this into account, it is difficult to find an economic sense in maintaining such a state of affairs.
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The law introduced in 2016 restricting the trading of agricultural land – as we warned against – has not improved the condition of Polish agriculture. It did not bring about the increase in investments that it was supposed to entail. Instead, there was a decline in them, which was the largest in the European Union.
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The existing regulations give wide possibilities for interference of the National Support Centre for Agriculture in transactions concluded by private entities. The National Support Centre for Agriculture may intervene in sale of not only agricultural land but also companies owning agricultural land. As a result, the scope of state ownership in the Polish economy increases.
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On 17 March the Sejm, by the votes of the Law and Justice (PiS) and the Left (Lewica) parties, passed a law extending the restrictions on agricultural land trading for another 5 years.
Bureaucratic burdens, regulations limiting competition, inflexible labour laws, complicated and time-consuming tax settlements with the tax authorities are problems for years identified by entrepreneurs as the biggest barriers to business. The COVID-19 pandemic has prompted the government to introduce additional restrictions that often have a negative impact on business.
We believe that especially in this difficult period entrepreneurs need deregulation which will increase their flexibility in adapting to new economic conditions. Therefore, we are looking for solutions that will help to unleash the potential of entrepreneurs. In order to find regulations that are most harmful to entrepreneurs and show the benefits of deregulation for post-crisis growth, we have launched a portal www.deregulacja.pl.
Author:
Marcin Zieliński, FOR economist
marcin.zielinski@for.org.pl
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