Every fall, the agribusinessmen who cultivate foreign lands laboriously explain how hard it is to make money and how they barely pay the rent. Now, to the usual complaints – of drought, hail, excessive rainfall, expensive fertilizers and seed materials, low purchase prices – tenants add the increased competition of imports from Ukraine.
Against the background of the recent protests, warnings have become more frequent that there is no way to pay high rents. The Minister of Agriculture Kiril Vatev himself set the tone, saying: “The current economic year is difficult both with and without the ban on imports from Ukraine. There was drought, floods, a collapse in the grain market, and since the war started, nothing has been the same.”
The fact is that Russia’s aggression – not only on the front, but also the economic wars with which it retaliates against the sanctions – since last year has been disturbing the food and fuel markets and creating global price shocks and uncertainty, and unpredictability is the most damaging thing for any business.
But the pessimism in Bulgarian agriculture is no longer present. If you ask the owners who rely on income from their fields, the rents are insultingly low, and the tenants invariably claim the opposite – that it is too expensive to rent. Already three years ago, the Association of Agricultural Producers announced that rents had reached the “tolerability ceiling”. And in fact, rents continued to grow, with the average value rising from BGN 44 per acre per year in 2020 to BGN 63 in 2022.
Minor forecasts are increasingly being heard in the media. Owners complain that if they keep the amount of annuities, they will not only be left without working capital, but also will not be able to service their loans. In a report on Nova TV, Alexander Sabanov, who cultivates 10,000 decares of land in the Silistra region, explained that last year, due to the good prices for grain in the region, the rents were BGN 70-80 per decare, but due to the drop in prices by over 30 % this autumn the rents will not reach 60 BGN per acre.
The Thracian Union of Grain Producers described the following picture for Starozagorsko: Against the background of satisfactory wheat yields, the first results of the sunflower harvest show a drop of about 30%. Because of the heat, the corn yield per hectare will be half of last year. The prices of wheat, rapeseed, sunflower and corn have been falling recently, and rents are rising and in some places they reach BGN 90-100 per acre.
These predictions are not authoritative. And since the demand for agricultural land is high and the competition between tenants is serious, the expected “stagnation” of rents may not happen.
Directions
In 2022, the average price of transactions with fields in Bulgaria reached BGN 1,428 per acre, and the average rent price – BGN 63/acre, according to the official data of the National Statistical Institute. NSI collects information on real transactions. Compared to the previous year, the average price of fields increased by 21.6%, and the rent paid – by 21.2%.
Compared to the previous year, there was an increase in the price of transactions with fields and the average price for renting/leasing one acre of fields in all six statistical regions of the country.
Huge differences
In 2022, the highest was the price of transactions with fields in the North-Eastern region – BGN 2,043 per hectare, which is 32.1% more compared to the previous year. “Golden Dobrudzha” is really golden – only there are prices over BGN 3,000 per acre (in the villages near Dobrich and around Balchik).
Although not with such percentages, agricultural areas have become more expensive in other statistical regions of the country as well. In the North-West region, the average price per acre reached BGN 1,525 per acre (an increase of 18.8% for the year), in the North-Central region the price was BGN 1,575 per acre (a 23.5% increase compared to 2021), in the South-East region – 1,096 BGN per hectare (17%).
In the other two areas, the fields are not only much cheaper, but they are further away from the others because their prices rise very slowly. In the South Central region, the average price grew last year by 3% and was BGN 643 per acre, and in the Southwest region it reached BGN 705 per acre after a symbolic increase of 0.7%.
Land rents are once again the most expensive in the North-Eastern region – the average price for renting/leasing one acre has increased by over 16% to BGN 93. Especially in the eight Dobruja municipalities, the average value was BGN 125/acre.
In the South-Central region, the average rent has increased by 33.3%, in the South-Eastern region – by 30%. In the North-West and South-West regions, the increase was by 16.7%, and in the North-Central region – by 17.2%.
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2023-09-23 05:15:09
#protest #memorandum #Nikolay #Denkov #lessees #fields #rents
