Australian investors buy 20,000 hectares of agricultural land in Germany!

Australian investors buy 20,000 hectares of agricultural land in Germany!

A remarkable change has taken place in the German agricultural landscape in the last few weeks. Australian investors have snapped up 20,000 hectares of agricultural land in Germany, causing a stir in the industry. According to [merkur.de]. This transaction is considered one of the largest share deals in Germany and possibly in the entire EU.

The DAH, previously owned by the Gustav Zech Foundation, was acquired from the bankruptcy estate of KTG Agrar in 2016 for just 5 million euros. The sale not only generates economic interest, but also raises questions about political control. The Federal Ministry of Economics stated that it does not provide any information about investment audit cases, although existing laws such as the Foreign Trade Ordinance would have required a review of the sale.

Political reactions and challenges

The political discussion primarily revolves around the responsibilities of the different levels. The Working Group for Rural Agriculture (AbL) surveyed the position of several ministries and found that responsibility was shifted back and forth between the federal and state governments. The Minister for Agriculture in Saxony-Anhalt, Sven Schulze, criticized the state regulations as a “blunt sword” and emphasized that only the federal government could issue legally binding bans against such transactions. In Brandenburg, legal options are currently being considered to ensure more transparency and control when purchasing shares, recalls agrarheute.

In Saxony-Anhalt it was determined in 2022 that the federal government has the legislative competence for regulations, while the Ministry of Agriculture in Saxony recalls previous discussions on an agricultural structure law in which an extension of land market control to share purchases was rejected.

Market development and challenges for agriculture

The growing presence of foreign investors in the German agricultural landscape is also reflected in the numbers. According to data from the Federal Statistical Office (Destatis) from 2023, 2,919 business groups managed more than 2.1 million hectares of agricultural land, an increase of 32% since 2020. The increase in foreign investors is particularly alarming: the number rose from 118 to 153 – an increase of 30%.

With the increase in agricultural holdings in the country comes a change in structure. More and more owners - 23% of agricultural holdings - have an agricultural group management that is not based in Germany. This not only promotes competitive pressure, but also causes purchase and lease prices to skyrocket. Even though Lower Saxony is planning an agricultural structure law to make so-called share deals subject to approval, there is resistance from the rural population of Lower Saxony, who warn of more bureaucracy.

Overall, it is clear that German agricultural policy has lost control over the agricultural land market. This not only refers to the economic terrain, but also to the political framework conditions that are important for agriculture. It remains to be seen what specific measures will be taken by the federal states and the federal government to counteract this development.

The agricultural units in Brandenburg, Mecklenburg-Western Pomerania, Saxony and Saxony-Anhalt are therefore facing major challenges. Interest from abroad in German agricultural land is unbroken and is putting the political and economic landscape to the test. While the pressure on politicians is increasing, transparency and interest in local issues should not be lost sight of in order to ensure the sustainable development of domestic agriculture.

For further details on this topic and current developments, you can view the reporting on abl-ev.de and merkur.de as well as agrarheute.com track.