Agriculture is one of the main economic branches in the Republic of Serbia. The vast areas of arable agricultural land in the country are still state-owned. This land is leased out to natural or legal persons, with profit in agriculture depend on the area of cultivated land and not on the amount of invested working capital.
At the beginning of 2015, the government suggested the amendments to the Law on Agricultural Land in order to ease a new foreign investment in agriculture. The most important amendments are: 1. Introduction of the right of first refusal to lease- persons with an “investment plan” will have priority over other interested parties in leasing up to 30% of the total area of state-owned land in each municipality for a period of up to 30 years (previously lease period did not exceed 3 years and leased area was restricted to 100 ha); and 2. Restriction of the right of lease for persons who own land.
Such proposals provoked the protests by the farmers from the Serbian Norther province Vojvodina and several opposition political parties. They were worried by the fact that the Ministry of Agriculture will evaluate “investment plan” (only vaguely defined in the law) giving them unchecked powers to favour big investors closely cooperating with the Serbian authorities over persons who have already invested in agriculture. The state authority concerted foreign investments are needed given that not all state-owned arable land is currently in use.
Despite the protests in front of the Parliament in Belgrade, the capital of Serbia, the amendments to the Law on Agricultural Land came into force in December 2015. In addition, in accordance with the Stabilization and Association Agreement (SAA), Serbia has the obligation to allow the transfer of agricultural land to EU nationals by 1st of September 2017 by further adjusting the Law on Agricultural Land. The law currently states that a foreign natural or legal person cannot own agricultural land in Serbia, yet foreigners can own agricultural land indirectly through locally registered companies.