AGRICULTURAL LAND TRADE RESTRICTIONS IN EUROPE AND THE LAND MARKET SITUATION IN LATVIA

Land grabbing is a topical issue in many parts of the world. In the European context, it is a particularly pressing matter in Eastern Europe. The European Parliament recently highlighted the need to examine the agricultural land market beyond the boundaries set by the principles of free movement of goods, services, capital and people. The purpose of this study is to investigate the diversity of trade restrictions on agricultural land in 17 European countries and the market situation in Latvia before and after the liberalisation of the agricultural land market. A relationship between the rigidity of the regulatory framework, the share of agricultural activities in national economy, and the sales price of agricultural land was found. While most countries have restrictions for agricultural land trade to non-EU natural and legal persons, a third of the examined countries prohibit agricultural land sales to non-EU natural and legal persons. The impact of the current agricultural land trade restrictions on agricultural land market in Latvia over the period 2012-2016 was analysed by using data on agricultural land sales transactions obtained from the State Land Service of Latvia. The analysis reveals signs of agricultural land concentration, with a substantial increase of legal persons in the agricultural land transaction structure. At the same time, natural persons who are citizens of Latvia have been active in selling their agricultural land properties. The conclusions of this study provide an insight into the effects of agricultural land market restrictions and characteristics of the land market in general.