National Strategy on agricultural land consolidation 2012-2020

NATIONAL STRATEGY on Agricultural Land Consolidation in the Republic of Macedonia for the period 2012-2020 with an Operational Plan March 2012 REPUBLIC OF MACEDONIA Ministry of Agriculture, Forestry and Water Economy CONTENTS CONTENTS 2 ABBREVIATIONS............................................................................................................... 4 INTRODUCTION ................................................................................................................. 5 PART I SITUATION ANALYSIS OF THE LAND STRUCTURE, RELEVANT POLICIES, LEGISLATION AND INSTITUTIONS .................................................................................. 7 I.1 Significance of and the overall situation in the Macedonian agricultural sector ............ 7 I.2 Agricultural land structure in the Republic of Macedonia .................................................. 8 Agricultural land distribution by land use and crops ............................................................ 8 Agricultural land ownership structure ................................................................................... 11 Land structure of agricultural holdings by legal status and size ...................................... 11 Land structure of agricultural holdings according to the structural research by the SSO .................................................................................................................................................... 13 Agricultural holdings typology ............................................................................................... 14 Agricultural land fragmentation ............................................................................................. 15 I.3 Land structure impact on agricultural production and competitiveness of agricultural sector ............................................................................................................................................. 16 I.4 Land structure impact on work conditions in rural areas, life of rural communities, nature protection and natural resources management ......................................................... 18 Rural areas characteristics and importance of agriculture as economic activity .......... 18 Road infrastructure.................................................................................................................. 20 Irrigation systems .................................................................................................................... 20 Agro-ecological aspect and its relations to the land structure ......................................... 22 I.6 Abandoned agricultural land and agricultural land market .............................................. 23 I.7 Policies and laws on agricultural land management in the Republic of Macedonia and other land policies ....................................................................................................................... 25 Historical overview of land policies and relevant laws ...................................................... 25 Strategic and policy document related to agricultural land management ...................... 25 Legal regulation of land policies ........................................................................................... 26 Current land policies ............................................................................................................... 28 I.8 Institutional set-up ................................................................................................................. 28 I.9 European experiences and policies on agricultural land consolidation ........................ 29 I.10 SWOT analysis of the situation with land structure ....................................................... 31 PART II STRATEGIC FRAMEWORK – OBJECTIVES OF THE AGRICULTURAL LAND CONSOLIDATION ................................................................................................. 34 II.1 Strategic objective ................................................................................................................ 35 II.2 Specific objectives ................................................................................................................ 36 II.3 Land Consolidation Principles and Elements ................................................................... 37 Time frame and Phasing ........................................................................................................ 37 Participation.............................................................................................................................. 37 Equal or improved value ........................................................................................................ 38 Increased Agricultural Land per Holding ............................................................................. 38 Provision of Financial Resources/Funding .......................................................................... 38 Harmonization of the Land Consolidation Process with Other Strategic and Planning Documents ............................................................................................................................... 39 PART III INTERVENTION AREAS FOR IMPLEMENTATION OF THE AGRICULTURAL LAND CONSOLIDATION POLICY ...................................................... 40 Intervention Areas ................................................................................................................... 40 III.1 Agricultural Land Consolidation Policy Instruments ....................................................... 40 Individual consolidation .......................................................................................................... 40 Voluntary Land Consolidation ............................................................................................... 41 Complex Land Consolidation ................................................................................................ 42 III.2 Legal grounds for Land Consolidation ............................................................................. 43 III.3 Establishment and Institutional Strengthening of the Bodies for Drafting and Implementation of the Land Consolidation Policy .................................................................. 44 National Land Consolidation Body ....................................................................................... 44 Competent Bodies for Farmers’ Participation in the Process .......................................... 46 Other Institutions and Stakeholders ..................................................................................... 46 Human Resources Development .......................................................................................... 47 Provision of Technical Conditions ........................................................................................ 47 III.4 Financial and strategic consolidation planning ............................................................... 47 III.5 Raising the Awareness of Land Consolidation ............................................................... 49 III.6 Other policies that contribute to improvement of agricultural structure ...................... 50 Provision of market information concerning the land market ........................................... 50 Improving the access to credits for consolidation purposes ............................................. 50 Decrease in land transfer related expenses and taxes ..................................................... 50 Inheritance of agricultural holdings by a single person ..................................................... 51 Introduction of tax burdens on uncultivated agricultural land and abandoned land management ............................................................................................................................ 51 Joint ownership and incomplete arondation procedures .................................................. 51 PART IV: IMPLEMENTATION OF AGRICULTURAL LAND CONSOLIDATION WITH AN OPERATIONAL PLAN OF ACTIVITIES ........................................................................... 53 IV.1 Consolidation procedure implementation phases .......................................................... 53 Consolidation project initiation .............................................................................................. 53 Consolidation project design ................................................................................................. 53 Assessment of existing state in the consolidation area .................................................... 55 Drawing up a detailed consolidation plan ............................................................................ 55 Implementation of detailed consolidation plan ................................................................... 56 Consolidation final phase ....................................................................................................... 56 IV.2 Programming and Implementation Dynamics of the Land Consolidation Policy in the Republic of Macedonia ........................................................................................................ 56 Land Consolidation Preparation Phase, from 2012 until the middle of 2013 ................ 56 Land Consolidation Phase Two - from the middle of 2013 until 2016 ............................ 58 Land Consolidation Phase Three - from 2016 to 2020 ..................................................... 59 IV.3 Land Consolidation Indicative Implementation Plan ..................................................... 60 PART V: OPERATIONAL PLAN OF LAND CONSOLIDATION ACTIVITIES FOR THE PERIOD 2012-2020 .......................................................................................................... 61 Annex 1 Existing Institutional and Legal Acts on the Land Property and Land Use 64 Annex 2 Overview of land structure in other European countries.............................. 65 ABBREVIATIONS Agency for Financial Support to Agriculture and Rural Development – AFSARD Agency for Real Estate Cadastre – AREC Gross domestic product – GDP State Statistical Office – SSO Single Register of Agricultural Holdings – SRAH European Union – EU Association of the Units of Local Self-Government – ZELS Integrated System for Administration and Control – ISAC Ministry of Agriculture, Forestry and Water Economy – MAFWE Macedonian Denar – MKD Farm Accountancy Data Network – FADN National Agriculture and Rural Development Strategy 2007-2013 – NARDS 2007-2013 National Bank of the Republic of Macedonia – NBRM SWOT analysis – analysis of strengths, weaknesses, opportunities and threats Sector for Registration and Management of Agricultural Land – SRMAL World Trade Organization – WTO 5 INTRODUCTION Agricultural land consolidation is an integral part of agricultural land management in the European Union (EU) countries as a key resource in agricultural production and rural development policies. The situation with land structure in the Republic of Macedonia, which is far worse than the average European level with regards to size of agricultural holdings and their fragmentation, and is the fundamental limiting factor for the improvement of the competitive capacities of Macedonian farmers, indicates to the necessity to quickly introduce agricultural land consolidation policies as part of agricultural, and in particular rural policies in the Republic of Macedonia. Agricultural land consolidation includes land defragmentation procedures or enlargement of the agricultural holding size using various instruments, from simple parcel exchange with or without reshaping to re-parcellation, which entail modification of land parcel boundaries aiming at land parcel enlargement with regular shape favourable for agricultural production and with an improved access to road infrastructure and irrigation systems. Larger parcels allow for the application of modern production methods and technologies, production costs reduction, and hence increased productivity, output and incomes. Resulting from this, the objectives of a number of policies will be achieved, including agricultural development, preservation, sustainability and improved conditions in rural areas and communities, and also environmental protection and improvement. The subject of this agricultural land consolidation are the defined regions in particular rural areas in the Republic of Macedonia, selected on the grounds of cost-benefit analysis of the consolidation, land plots, feasibility study, and above all on the demonstrated interest by farmers where the agricultural land organization processes will be implemented through consolidation projects. Priorities will be given to areas with developed and intensive agricultural production where the small and fragmented parcels significantly limit the further agricultural development as a primary agricultural activity in the rural areas. Parallel to improving the agricultural holdings structure, equally important key objectives shall be the rational use of natural resources, public needs and rural infrastructure development. The agricultural land consolidation process is an intensive and complex operation which implementation requires 3-12 years per project, but with long-term individual and societal permanent benefits due to the full or significant overcoming of the biggest problem structure-wise of Macedonian agriculture – unfavourable structure of land parcels. Because of this, the strategy covers a long-term period for implementation of the foreseen activities from 2012 to 2022, with an evaluation of strategy implementation envisaged to be carried out in the middle of this period, in 2016. Having set the basic conditions for the implementation of these policies, the second period covered by this strategy has foreseen the implementation of procedures for a more complex reorganization of the agricultural land with a more serious infrastructural spatial organization of larger areas as the basis and laying better foundations for economic development. The Government of the Republic of Macedonia recognizes the introduction of the agricultural land consolidation as one of the instruments to overcome the structural weaknesses as part of its policies in the Work Programme of the Government for the period 2011-2015, whereby the drafting and adoption of a National Strategy is foreseen, as a new legal solution which will support this process and initiate specific consolidation activities in 2012. Due to the multidisciplinary and integrated approach in agricultural land consolidation, the National Strategy harmonizes the land organization policies with the objectives listed in the strategic documents on spatial planning, on agricultural and rural area development, on sustainable forestry development in the Republic of Macedonia, etc. This document includes current situation analysis, SWOT analysis of the process, strategic and specific objectives, operational plan with measures in all areas relevant to the initiation of consolidation policies, such as adequate policy instruments, legal requirements and institutional 6 strengthening necessary for the implementation of the agricultural land consolidation, financial sustainability, raising awareness and promoting the process. The strategy preparation and piloting of the initial experiences in the agricultural land consolidation in the Republic of Macedonia in the period between 2008 and the beginning of 2012 was generously supported by the Government of the Kingdom of Netherlands.1 1 Through the EMERALD project (Encouraging Macedonia’s Endeavours to Rural Land Development) implemented in 2008-2009 and the STIMERALD project (Strategy and Institution Building for Macedonia’s Endeavours to Rural Land Development) implemented in 2010-2011, implemented by the Dutch Agency for Land and Water Management DLG and the Dutch Development Agency SNV Macedonia 7 PART I SITUATION ANALYSIS OF THE LAND STRUCTURE, RELEVANT POLICIES, LEGISLATION AND INSTITUTIONS I.1 Significance of and the overall situation in the Macedonian agricultural sector The total surface area of the Republic of Macedonia equals 25,713 km2, which is 6% of the EU-25 territory. The land is characterized by rich relief diversity, with prevailing hilly-mountainous structure and river valleys and plains providing conditions for agricultural development. Hills and mountains cover around 79% of the area, and the remaining area are plains (19%) and natural lakes (2%). This relief has a limiting impact on the size of parcels and the optimum structure of agricultural properties. Agriculture, together with hunting, forestry, and fishing is the third most important economic sector by its share in gross domestic product (GDP) with a share of 10.6% in the total GDP in 2010, right after the services and industry sectors. The share of agriculture in GDP over the last twenty years is stable, and in times of transition and industrial production decline represented a shock absorber of the negative social and economic effects. Food, beverages and tobacco have a significant share of 39% in the total consumption in the households in the Republic of Macedonia. Agriculture is the main source of incomes for the rural population, followed by forestry, crafts and village tourism, services and trade. Officially, the agricultural sector provides for an income and employment for about 19.25%2 of the active working population in the country (around 3 times more than in EU-27), but the real contribution in the realized incomes most likely exceeds this percentage as 45% of the total population, 36% of the workforce and 44% of the poor persons live in the rural areas. Productivity, cost-effectiveness, size of incomes, and finally increasing the very competitiveness has been significantly hindered by the overall weaknesses in the structure of this sector dominated on the supply side by large number of small entities with limited production capacities and varying product quality, whereas the demand side is characterised by lack of competition, especially in the part of marketing of the agricultural products. Such a structure in the market produces lack of horizontal integration and non-functional, most frequently confronting rather than agreed upon vertical relations, as well as disproportional distribution of the value achieved at the adversity of primary agricultural producers. Resulting from the decline of the development potential of the sector caused by the collapse of the agricultural and food processing complexes in the course of privatization and the full discontinuation of the support at the beginning of the second half of the 1990s, the increased competition pressure from the increased liberalization once the Republic of Macedonia became member of the WTO in 2003, and the signature of the trade section of the Stabilization and Association Agreement with EU and CEFTA in 2006, is still a serious challenge for most of Macedonian agriculture. However, the general impression is the over the last few years, with the increased support and investments by the state, as well as with the active policies for beneficial regulation of the social sphere, taxation, access to state-owned land and favourable credits, Macedonian agricultural sector has gradually increased its competitiveness and attractiveness for the onset of new entities. The export of agricultural products, in particular competitive products such as tobacco, wine, fruits and vegetables, lamb cover 15-17% of the total exports from the country. In 2010, the fruit and vegetable export reached € 424 million, which historically seen is the highest level to date. 2 Including hunting, forestry and fishing. According to SSO, the active population in the Republic of Macedonia in 2010 includes 938,294 persons, of which 68% are employed, and 32% are unemployed. 8 However, the net balance of trade valued between 50 and 100 million euro annually remains negative due to the import of high-priced products originating from animal production, above all meat, followed by products of continental crops, such as sunflower oil, sugar and some cereals, as Macedonia has comparatively unfavourable conditions for their production. Table 1. Macro-Economic Indicators for the situation in the Republic of Macedonia Indicator Unit 2004 2005 2006 2007 2008 2009 2010 Population 1 ‘000 2,032 2,037 2,042 2,045 2,047 2,054 2,057 GDP (in million Euro) 1 mil Euro 4,324 4,676 5,231* 5,965* 6,720* 6,677 6,905 GDP per capita (in Euro) 1 Euro 2,128 2,295 2,564 2,919 3,283 3,253 3,360 Agricultural sector share in GDP 1 % 13.2 12.8 10.5 9.1 10.0 9.7 10.6 Economic development 1 (changes in GDP) % 4.1 4.0 4.0 6.1 5.0 -0.9 1.8 Unemployment rate 2 % 37.2 37.3 36.0 34.9 33.8 32.2 32.1 Inflation (end of period, annual basis, in %) 2 % -1.9 1.2 2.9 6.1 4.1 -1.6 3.0 Average exchange rate 2 MKD/EUR 61.34 61.30 61.19 61.18 61.27 61.27 61.51 Share of food, beverages and tobacco in the total consumption per households % 45.4 43.8 43.4 42.5 43.3 40.7 39.0 Source: * 1 SSO (2009-2010), 2 NBRM (2010) In compliance with the undertaken obligations from the EU-integration process, Macedonian agricultural and food processing sector and relevant institutions, considering their performances, need to become significantly aligned to levels defined in the Common Agricultural Policy. Apart from the reforms that have been rather intensively implemented in three major areas: policy, institutions and harmonization of legislation, the EU-accession process also assumes a significant adjustment of the national economy entities to operate in the circumstances of a single European market. Based on the identified significance of the agricultural sector, as of 2007, the Government of the Republic of Macedonia has included agriculture as one of its economic priorities, thereby implementing complementary and comprehensive policies aiming at the provision of significant financial and other support to the sector so as to raise its competitiveness and improve the living conditions in the rural areas. Though positive shifts have been evident in the increased production in majority of sub-sectors and the increased export, a more significant increase in the competitiveness is possible by providing optimal structure of agricultural holdings, especially with regards to size, shape, and integrity of the available land. I.2 Agricultural land structure in the Republic of Macedonia Agricultural land distribution by land use and crops Agricultural land3 in the Republic of Macedonia covers an area of 1,121,000 ha in 2010 or 43.5% of the total territory of the country, which is the first increase of the agricultural land area after the negative trend of area reduction since 2003 onwards. 3 Agricultural land is area of land used for agricultural production (arable land, pastures, fisheries, reeds and ponds). Arable land means an area of land used for crop production, perennial plantations and grasslands where such agricultural activities are carried out as cultivation, cutting, etc. and from where as a rule yields are collected (harvested) each year. Arable land includes ploughed land and gardens, orchards, vineyards and meadows. Statistical Yearbook of Republic of Macedonia, 2007, SSO. 9 Area classified as forestland covers approximately 1.16 million hectares (45% of the total area of the country), whereby the total area under forests is 960 thousand hectares (37.3%). Around 90% of the total area under forests is state-owned property. Aside from the generally beneficial role of the forests, they also provide forest products and services, however, the utilisation of this potential is conditioned by the good structure of the forest land. The current fragmentation, in particular in private properties, and the insufficient parcel size limit the forestry potential. Table 2. Land structure of areas in the Republic of Macedonia (in thousand hectares) Indicator 2003 2004 2005 2006 2007 2008 2009 2010 Total area 2,571 2,571 2,571 2,571 2,571 2,571 2,571 2,571 Water area 49 49 49 49 49 49 49 49 Remaining area 264 310 338 338 504 515 559 441 Standing forests 955 948 955 959 942 943 949 960 Agricultural land 1,303 1,265 1,229 1,225 1,077 1,063 1,014 1,121 Source: SSO, 2004-2011 The total agricultural land is almost equally divided into arable agricultural land, mainly located in the valleys and covering almost half of the total agricultural land or 45% in 2010, and pastures, covering 55%, concentrated in the hilly and mountainous terrains. According to estimates, 33% of the total arable land is left uncultivated each year, that is, fallow land or abandoned land make up 135,000 ha. According to data from the Ministry of Forestry and Water Economy (MAFWE), 460 ha were reassigned as construction land in 2011. Table 3. Agricultural land by land use (in thousand hectares) Use of agricultural land 2005 2006 2007 2008 2009 2010 ha % Agricultural land 1,229 1,225 1,077 1,064 1,014 1,121 100 Arable land 546 537 526 521 513 509 45 Ploughed land and gardens 448 439 431 424 420 415 37 Orchards 13 13 13 14 14 14 1 Vineyards 26 25 23 22 21 21 2 Meadows 59 60 59 61 58 59 5 Pastures 682 687 550 542 500 611 55 Ponds, reeds and fisheries 1 1 1 1 1 1 0 Source: SSO, 2011 Although 2010 marks the first growth of agricultural land area after 2007, this is mainly due to the increased area under pastures (by 22.2% compared to 2009) and under meadows (by 1.7%). Arable agricultural land trends continue in the negative, above all, because of the area reduction of ploughed land and gardens for a total of 1.2% or 5,000 hectares in a single year, and this mainly due to abandoning of land caused by population migration, as well as by urban and industrial development. Areas under permanent crops demonstrate stabilization at the same level over the last three years, including fruit plantations on 14,000 hectares and grape plantation on 21,000 hectares. According to the State Statistical Office (SSO) data, cereals have the greatest share in areas under ploughed land and gardens, wheat being the prevailing one. As of 2007, MAFWE has introduced elements of the Integrated System for Administration and Control (ISAC), including the Single Registry of Agricultural Households (SRAH) and the Land Parcels Identification System. The aerial survey of June 2009 and the initial production of digitalized data for agricultural land purposes, have yielded the information about arable agricultural land as represented in Table 4 and the real graphic ortho-photo map of the territory of the Republic of Macedonia. 10 Table 4. Land Use in the Republic of Macedonia based on Information from the Land Parcels Identification System of MAFWE Code Land use No. of physical blocks Area in ha % of the total area Average size of physical blocks 200 Arable land – fields 266,731 349,460 71.0 1.31 210 Glasshouses and plastic tunnels 3,515 3,479 0.7 0.99 310 Meadows 48,912 58,440 11.9 1.19 400 Undefined land use – perennial plantations (grape or fruit plantations) 15,399 9,567 1.9 0.62 410 Grape plantations 37,784 29,687 6.0 0.79 420 Orchards 16,996 9,650 2.0 0.57 500 Land of varied use 22,536 31,798 6.5 1.41 900 Temporarily non-arable land 555 153 0.0 0.27 Total 412,428 492,232 100 1.19 Source: MAFWE, LPIS 2012 Statistical overview of the digitalized parcels shows that, from the aspect of land use, agricultural land is predominated by arable land, or fields, with 71%, meadows with 11%, and perennial plantations with 8%. Even though parcel size statistics refer to physical blocks defined according to land use and limited by other physical boundaries in the area, their average size is exceptionally small, which speaks of the great diversity of parcels, covering various types of small size land use, significant presence of borders in between or, in general and from land aspect, an unorganized agricultural space. Figure 1. Agricultural land use on ortho-photo map of the Republic of Macedonia LAND USE Arable land (plots) Glasshouses and plastic tunnels Meadows Perennial plantations Mixed-use land 11 Agricultural land ownership structure According to the ownership structure, agricultural land can be divided into privately owned and state-owned property. Pursuant to Article 17 of the Law on Agricultural Land (The Official Gazette of the Republic of Macedonia No. 135/07, 17/08, 18/11, 42/11, 148/11), MAFWE manages the state-owned land, or gives it to others to use. As of 2007, the Ministry of Agriculture started an intensive allocation of state-owned agricultural land. This resource has considerably met the needs for agricultural land emerged as the result of the increasing number of interested people in the rural areas, but also businessmen who wished to start up agricultural activities or expand the existing capacities. According to information from the 1998 Cadastral records of AREC, with respect to ownership, the total arable agricultural land can be divided into 451,702 ha privately owned and 237,882 ha state-owned land. Having in mind that the MAFWE is currently updating the geodetic basis and is inventorying state-owner land, the Ministry's estimations are actually showing lower figures for the state-owned land. To date MAFWE has allocated a total of 143,600 ha state-owned agricultural land to a total of 5,350 beneficiaries, or, on average, 26.80 ha per beneficiary. The following Table shows the distribution of state-owned agricultural land by size and number of beneficiaries. Table 5. Distribution of state-owned agricultural land by size and number of beneficiaries Hectares Number of applicants Allocated area Up to 10 4,700 40,000 10-50 300 25,000 50-100 264 20,100 100-500 66 14,600 500-1000 11 7,900 1000-5000 7 13,000 Over 5000 2 23,000 Source: MAFWE, 2012 Even though the average size of allocated state-owned land per beneficiary is 26.8 ha, if few beneficiaries are excluded from the calculation i.e. business entities who have several thousands of hectares at their disposal, the majority of the recently allocated land over the past few years is of the average size of 10 hectares per beneficiary, mostly to family agricultural holdings. Land structure of agricultural holdings by legal status and size The overall division of the structure of agricultural holdings in the Republic of Macedonia according to their legal status is into family agricultural holdings and agricultural enterprises established under the Law on Trade Companies and Law on Cooperatives. The latter include micro or small newly-formed firms whose principal activity is agriculture, and which are chiefly limited liability companies, or larger enterprises that mainly draw origins from the former agricultural-industrial combines. Apart from these legal forms, according to the Law on Implementation of Agricultural Activity (The Official Gazette of the Republic of Macedonia No. 11/2002 and 53/2011), farmers may also acquire the status of Individual Farmer by way of entering the Individual Farmers Register which is kept at the MAFWE. 12 Articles 18 and 21 of this Law define the conditions for registration in the Individual Farmers Register4, whereas Article 22 regulates the obligation that an individual farmer must have a firm. Having met the requirements of the prescribed procedure, a total of 1,663 active individual farmers have been entered into the Individual Farmers Register by January 2012. According to the data from the register, these farmers have a total area of 22,864.22 ha of agricultural land at their disposal, of which 14,726 ha is in personal possession and around 8,140 ha is leased, or, on average, 13.5 ha agricultural land per holding. According to the Law on Agriculture and Rural Development, responding to the need to keep records of all the agricultural holdings for the purpose of administrative control of the financial support applications, all agricultural holdings who are beneficiaries of financial support measures should be registered in the Single Register of Agricultural Holdings5. The total number of agricultural holdings recorded in SRAH is 77,223, which is still different from the total number of 102,500 agricultural holdings, who are beneficiaries of the financial support funds, with respect to the number of tobacco producers who are receiving their subsidies as a premium. According to the data from the Agency for Financial Support to Agriculture and Rural Development (AFSARD) the structure of agricultural holdings, who are beneficiaries of direct payments, according to the legal status, average arable land per holding, number and average size of parcels per typical agricultural holdings that use subsidies, is as follows: Table 7. Structure of direct payment beneficiaries by type of holding, legal status and used land Sub-sectors Status Number of holdings Area per holding Land parcels Total area Average area per holding ha Total number Average number per holding Average size ha Cattle production Legal 24 0 0.00 0 0.0 0.00 Physical 10,878 70 0.01 105 0.0 0.66 Vegetable production Legal 41 362 8.83 158 3.9 2.29 Physical 1,969 2,348 1.19 5,016 2.6 0.47 Poultry production Physical 14 0 0.00 0 0.0 0.00 Goat production Legal 9 0 0.00 0 0.0 0.00 Physical 981 7 0.01 22 0.0 0.32 Cow milk production Legal 213 739 3.47 504 2.4 1.47 Physical 6,993 7,019 1.00 11,316 1.6 0.62 Grape production Legal 49 1,368 27.92 106 2.2 12.91 Physical 11,728 11,555 0.99 21,425 1.8 0.54 Mixed type Legal 269 13,395 49.80 1,444 5.4 9.28 Physical 16,886 31,028 1.84 50,075 3.0 0.62 Sheep production Legal 33 7 0.21 2 0.1 3.54 Physical 1,909 95 0.05 136 0.1 0.70 Crop production Legal 378 41,731 110.40 1,864 4.9 22.39 Physical 22,805 46,866 2.06 67,703 3.0 0.69 4 And this includes: the farmer should be of age, he should be in generally good health condition, he should not be employed or pensioner, he should not have been sanctioned against implementation of activities by way of legal verdict, he should have all his due taxes and other public fees paid, and he should not be entered into the trade register. 5 Registration of agricultural holdings in the Republic of Macedonia in the Single Register of Agricultural Holdings (SRAH) has been regulated by the Rulebook on the Form, Content and the Manner of Keeping the Single register of Agricultural Holdings (The Official gazette of the Republic of Macedonia No. 62/08). Records on registered agricultural holdings refer to the carrier and members of the holding, cadastral parcels and basis for the use of agricultural land, type and number of cattle, etc. 13 Pig production Legal 84 86 1.02 31 0.4 2.77 Physical 237 93 0.39 114 0.5 0.81 Source: AFSARD, 2012 The definition of agricultural holdings by their type is made with reference to the amount of the type of subsidies received, whereby a typical is considered the holding which has received more than 2/3 of a particular type of subsidy characteristic of the given agricultural sub-sector from the total received subsidies. Land structure of agricultural holdings according to the structural research by the SSO According to the official statistical structural research, i.e. agricultural census of 2007, a total of 192,675 agricultural households have been recorded, out of which 192,378 are family agricultural holdings with an average size of 1.62 ha. Most of these agricultural holdings have a mixed production structure and cover an area smaller than 0.5 ha (43%), and even 90% of all these holding are smaller than 3 ha. The census has recorded just 297 agricultural enterprises. This structure contributes to an inefficient use of agricultural land and is the consequence of large parcellation and fragmentation of land in the Republic of Macedonia. Aside from the unfavourable situation of the average overview, the 2007 census data also reveal the disturbing situation of structural deterioration of agricultural properties in the Republic of Macedonia compared to data of previous structural research, i.e. the 2004 population census. Table 8 gives a comparative overview of the basic size indicators of agricultural properties from structural research in 1994 and 2007, where the reduction trend of the average area per agricultural holding and the increase of smaller holdings are clearly evident. Table 8. Size indicators of agricultural holdings and agricultural land use in 1994 and 2007 censuses Source: SSO, 1994 Population Census and 2007 Agricultural Census. According to SSO notice of 2010, family holdings use 55.8% of the total agricultural land (or 91.5% of the arable land), whereas agricultural enterprises and cooperatives use 44.2% of the agricultural land (or 8.5% of the arable land). Agricultural enterprises and cooperatives, with 74%, are the biggest users of pastures which are owned by the state. The average size of family farms is approximately 1.7 hectares. The largest portion is composed of farms sized up to 0.5 hectares characterized with mixed production structure. The last structural research into agricultural holdings carried out from 1 to 15 June 2010 by the State Statistical Office only confirms the worrying reduction trend of the average size of agricultural holdings. The total number of individual agricultural holdings is 192,082 and they use 282,830 hectares agricultural land, or just 1.47 hectares average area of used agricultural land per holding. Based on the information given above from the registers and databases of MAFWE and AFSARD, and from the official structural research implemented by SSO, it turns out that Republic Indicators Census 1994 Census 2007 Number of agricultural holdings 226,000 192,378 Average agricultural land size per agricultural holding 2.6 ha 1.6 ha Agricultural holdings covering areas up to 1 ha (of the total number) 54% 63% Agricultural holdings covering areas of 3 or more ha (of the total number) 14% 11% 14 of Macedonia has an expressly bipolar structure of the agricultural holdings. On the one hand there is the prevailing number of family agricultural holdings that are utilising 90% of the total agricultural land in the Republic of Macedonia, having, on average, small-size agricultural properties of 1-2 ha. With reference to the structure of their properties, family agricultural holdings who have regulated their legal status as individual farmers under the Law on Implementation of Agricultural Activity, and the family holdings who have received state-owned land in the past five years and now manage an agricultural land of an average 10-13.5 ha are in relatively better position. However, their total number does not exceed 5,000 agricultural holdings, which is a small percentage of the total number of 192,000 agricultural holdings according to the Census or of the 102,500 agricultural holdings that use agricultural financial support from the State. On the other hand there is a smaller number of larger agricultural holdings which are legal persons (enterprises and agricultural cooperatives) and manage land properties of several hundred to several thousand hectares in size. The above mentioned, compared to the average size of agricultural holdings in England of 70 ha, Germany of 30 ha, Denmark of 43 ha, and the European average of 20 ha, the average area of agricultural holdings in the Republic of Macedonia is somewhat near this level only in consideration of the legal entities. The majority of agricultural properties in the country have an average which is far below the least favourable structure of agricultural holdings in EU member states. Agricultural holdings typology Based on the typology for agricultural holdings under the European Regulation No. 1242/2008, the State Statistical Office carried out the first classification of agricultural holdings based on the type of agricultural production and the economic size of agricultural holdings. From the total number of classified agricultural holdings, more than half or 58.2% have been classified in the lowest first class with incomes of up to Euro 2,000. Individual agricultural holdings participate with 86.9% in the formation of the total standard value of production. The greatest share in the formation of the total standard value of production belongs to the agricultural holdings typified as mixed plant and animal production, with 21.4%, whereas the smallest share belongs to agricultural holdings specialised in crop production, with 6.7%. Out of the total 192,675 agricultural holdings, the largest portion, or 42,192 holdings are specialised in crop production, whereas the smallest portion, or 7,760 agricultural holdings are specialised in production of animals that feed on seeds and grains. Below follows the distribution of agricultural holdings in the representative sample of the 2011 Macedonian FADN, divided by type and size. This overview makes it clear that non specialised mixed agricultural holdings are prevailing in the sample and in the overall population, with smaller economic size chiefly deriving from the smaller agricultural properties. Table 9. Distribution of agricultural holdings from the 2011 Macedonian FADN sample Type Economic size 2 3 4 5 Total Up to 4,000 Euro 4,000 – 8,000 Euro 8,000 15,000 Euro Above 15,000 Euro 1 – Specialised in arable crop 11 5 3 3 22 2 – Specialised in horticulture 5 13 20 32 70 3 – Specialised in permanent crops 14 9 3 3 29 15 4 – Specialised in grazing cattle 45 45 29 38 157 5 – Specialised in granivores 3 3 3 3 12 6 – Mixed plant production 21 26 8 3 58 7 – Mixed animal husbandry holding 10 13 5 3 31 8 – Mixed crops-cattle 90 98 29 4 221 Total 199 212 100 89 600 Source: Macedonian FADN, 2012 Agricultural land fragmentation Yet another characteristic of the agricultural land structure in the Republic of Macedonia is its high fragmentation. In addition to the average area of arable agricultural land per agricultural holding being very small, this area is not even one uninterrupted whole, rather a sum of a number of smaller parcels at a physical distance one from another. The 2007-2013 National Agricultural and Rural Development Strategy (NARDS 2007-2013) emphasises the weak land market, the low economic growth and the lack of social security as factors which further boost the additional fragmentation of parcels. Agricultural holdings are comprised of many parcels, usually 5 per holding, and large portion between 7-10 parcels6. The average size of these parcels is between 0.25-0.6 ha. Most of said parcels are at a certain distance of each other (500m-2km), and very often in various cadastral municipalities (approx. 20% of the parcels), hence making their cultivation largely expensive and time consuming. The shape of the agricultural parcels is mostly irregular, usually narrow and long, which has an unfavourable impact on the agricultural activities and use of adequate and contemporary production technologies and machinery. According to the 1998 Agency for Real Estate Cadastre data, the total area of 2,464,876 hectares in the Republic of Macedonia has 4,572,129 cadastre parcels. The average size of arable land parcels is 0.26 hectares, whereby 0.2 hectares is the average size of privately owned parcels and 0.53 hectares is the average size of state-owned parcels. The average size of forest parcels is 2.48 hectares, with an average of 0.37 ha in private ownership, and 8.39 hectares in state ownership. Table 10. Land structure by type of utilisation Privately owned % State-owned % TOTAL Arable land Number of parcels 2,215,189 83.2 447,482 16.8 2,662,671 Area hectares 451,702 65.5 237,882 34.5 689,584 Average size 0.2 0.53 0.26 Pastures Number of parcels 315,605 60.4 206,764 39.6 522,369 Area hectares 81,566 12.6 567,507 87.4 649,073 Average size 0.26 2.74 1.24 Forests Number of parcels 278,310 73.7 99,221 26.3 377,531 Area hectares 102,374 10.9 832,765 89.1 935,139 Average size 0.37 8.39 !! 2.48 6 According to the survey of the regional MAFWE units. 16 Unproductive land Number of parcels 661,383 65.5 348,175 34.5 1,009,558 Area hectares 21,555 11.3 169,525 88.7 191,080 Average size 0.03 0.49 0.19 Total Number of parcels 3,470,487 75.9 1,101,642 24.1 4,572,129 Area hectares 657,197 26.7 1,807,679 73.3 2,464,876 Average size 0.19 1.64 0.54 Source: AREC, 1998 More recent data only confirm the further average size reduction of parcels. Even though the users of financial support are larger agricultural holdings, according to the data of AFSARD on page 12, natural persons (family agricultural holdings), who are much more numerous compared to legal persons, the largest parcels are those used for crop production with 2.06 ha, in average comprised of 3 parcels and size of 0,69 ha. The predominating mixed holdings without any prevailing specialized type of production have the similar structure, in average 1.84 ha per holding, 3 parcels per holding, and average size of 0.62 ha per parcel. The grape and milk production holdings are twice as small with average parcel size of one ha, but are also more compact with 1.8 and 1.6 parcels per holding, and average size of 0.54 and 0.62 ha/parcel respectively. The vegetable production holdings are somewhere between these two groups of holding types. I.3 Land structure impact on agricultural production and competitiveness of agricultural sector The accountancy data collection network for agricultural holdings – the Macedonian FADN – established by MAFWE as a liaison body to FADN in the Republic of Macedonia is used for constant annual monitoring of the income made by agricultural holdings, and for the economic analysis of agricultural holdings and situation assessment of agriculture and the market for agricultural products. Based on the data from representative holdings in 2010, an analysis was made of the profitability of agricultural holdings in regards to the economic size of the agricultural holding and the relation between the average sizes of available land types. This data is presented in the Table and the Diagram below. Graph 1. Distribution of realised income per ha and per type and economic size of agricultural holdings according to the Macedonian FADN. 17 Type of AH Economic size 2 (€ 2000-4000) Economic size (€ 4000-8000) Economic size 4 (€ 8000-15000) Economic size 5 (above € 15000) Average ha Average ha Average ha Average ha 1 – Arable crops 4.3 5.07 11.97 146.23 2 – Horticulture 0.1 0.66 1.1 6.43 3 – Permanent crops 0.97 3.79 3.365 48.23 4 – Grazing cattle 3.75 3.99 12.6 11.59 6 – Mixed plant production 4.5 2.98 2.76 10.45 8 – Mixed crops-cattle 1.86 5.22 5.86 36.01 Source: Macedonian FADN, 2012 According to the 2010 data from the Macedonian FADN, presented above, the profitability analysis of agricultural holdings by type and size relative to area of arable agricultural land shows the impact of the size of arable land on the profitability of agricultural holdings. Namely, larger the economic size of the agricultural holding, that is, larger average available land, results in higher income and profitability per ha in all types of holdings. Cultivation of small land parcels is not economic, and is below profitability threshold, which is why they are of hardly sufficient production capacity for profitable start or continuation of agricultural activities, and because of the same reasons they are difficult to sell or lease. These individual parcels cannot even meet the minimum limit of 0.3 decares for financial support by the European Union. On the other hand, larger agricultural holdings produce larger incomes compared to the smaller ones, which only verifies the fact that enlargement of holdings will have a positive contribution to the wellbeing of the rural population. Agricultural land enlargement reduced the production costs and improves the net incomes per a holding of a given size. Land consolidation leading towards enlarged agricultural holdings contribution for a reduced fixed costs ratio per land unit, providing for a more efficient use of technology and eventually increase of productivity and output. According to a World Bank research, the negative relation between productivity and number of parcels was made clear. The results showed that the two types of productivity, of the 0 100000 200000 300000 400000 500000 600000 700000 800000 1 - Поледелски култури 2 Хортикултура 3 - Постојани култури 4 - Тревопасен добиток 6 - Мешовито растително производство 8 - Мешовито култури добиток Економска големина 2 (2000-4000 евра) Економска големина 3 (4000-8000 евра) Економска големина 4 (8000-15000 евра) Економска големина 5 (над 15000 евра) Economic size 2 (€ 2000-4000) Economic size 3 (€ 4000-8000) Economic size 4 (€ 8000-15000) Economic size 5 (above € 15000) 1 – Arable crops 2 – Horticulture 3 – Permanent 4 – Grazing cattle 6 – Mixed plant 8 – Mixed crops production crop-cattle 18 land factor (represented as incomes made by the holding7 per hectare), and of the labour factor (represented as incomes made by the holding per work day8) are becoming reduced with the increase in the number of parcels, or the fragmentation. The negative relations between productivity and fragmentation have been proven as statistically significant in this study. Other studies9 show that the inversely proportional relations between productivity of these factors and the fragmentation and specialisation on the other hand is relevant to a certain size of land parcels (3.5 ha in Georgia and between 5 and 10 ha in Moldova), i.e. up to a certain turning point productivity rises with the increase in holding size, after which it starts dropping. Agricultural land consolidation and enlargement of the size of holdings impacts not only the productivity of the production but also the standard of life of the rural families, where a more comfortable living standard and higher level of wellbeing is empirically always related to the larger agricultural holdings. I.4 Land structure impact on work conditions in rural areas, life of rural communities, nature protection and natural resources management Rural areas characteristics and importance of agriculture as economic activity The total number of population in the Republic of Macedonia in 2010 was 2,057,284 people, and population density in 2010 was 80 persons/km2. Most densely populated is the Skopje region, having a population density of 329 persons/km2 with a total population of 604.298 people, whereas the Vardar region has smallest population density of 33.9 km2 with a total population of 153,880 people. Around 43% of the population lives in rural areas, distributed over 86.7% of the total area of land, and the remaining 57% are urban population. Great number of villages are depopulated or have extremely small number of inhabitants, and because of the unfavourable age structure they are in danger of extinction. Majority of the population in rural areas, especially in the higher mountainous villages, lack basic healthcare services, including services pertaining to primary healthcare. The average age of the population in Macedonia e approximately 37 years, and almost 70.8% of the population is working population (between the ages of 15 and 64). In 2010 the young population in urban areas (aged 15-24) accounted for 18% of the total population in those areas, whereas the population aged above 65 accounted for 13%. The young population in rural areas (aged 15-24) accounted for 21% of the total rural population, whereas population aged above 65 accounted for 11%. Table 12. Population in the Republic of Macedonia Region Total population Changes – increase 1994-2002 G ro w th ra te M ig ra tio n Population density Unemployment rate in % 1994 2002 2010* Number % 1994 2002 National level 1,945,932 2,022,547 2,057,000 76,615 3,94 0,48 30,992 76.0 79.0 38% Pelagonija 242,614 238,136 234,000 -4,478 -1,85 -0,23 -5,297 49.7 48.8 18% Vardar 131,035 133,180 153,900 2,145 1,64 0,20 -1,670 40.7 41.4 13% North-Eastern 163,841 172,787 175,200 8,946 5,46 0,66 -1,557 70.6 74.4 8% South-Western 211,226 219,741 221,800 8,515 4,03 0,49 -6,191 64.2 66.8 4% 7 A 2003 research in Moldavia into the agricultural land consolidation effects. It includes incomes from the sale of product and the value of ownership expenses. 8 Includes the labour by family members and outside staff 9 2003 HUJ Survey for Georgia 19 Skopje 545,228 578,144 604,300 32,916 6,04 0,73 243 314.6 333.6 1% South-Eastern 168,481 171,416 173,000 2,935 1,74 0,22 -4,743 64.8 66.0 36% Polog 281,982 305,930 315,400 23,948 8,49 1,02 -8,472 116.8 126.7 10% Eastern 201,525 203,213 179,700 1,688 0,84 0,10 -3,305 48.3 48.7 12% Source: SSO, Census 1994 and 2002, *SSO Yearbook, 2011 It is an established fact that quality of education and lifelong learning can reduce inequalities between urban and rural areas, which are evidently big in Macedonia. However, it is exactly the small farmers (in particular in the underdeveloped areas), who have small and fragmented land parcels, who are the least educated and professional among the agricultural producers. The problem with education is evident among the unemployed, as in 2010 10.97% had higher or university education, majority of them, 53.8%, had secondary education, and the remaining 35.2% lacked qualified skills. 17.9% of the young population (aged 15-25) are unemployed and have a 19% share in the unemployed. Even though the number of small and medium enterprises in rural areas has increased, most of these are located in the more urbanised areas which are more attractive for business development. The retarded development of small and medium business in rural areas is preconditioned by the small purchase power and lower incomes by the rural population, lack of knowledge and skills, limited financial resources, unfavourable rural infrastructure and business environment. Majority of the rural population is involved in agriculture, forestry, hunting and fishing, of which more than half in crop production, and the remaining in cattle production. Agricultural income tends to be significantly lower than in other sectors and almost half of agricultural labour force are unpaid workers among the family members. However, the importance of agriculture as an economic activity in rural areas, besides the ever growing importance of non-agricultural activities, still remains the key factor for the wellbeing of the rural population. An important share in the agriculture labour force belongs to temporary and season workers, especially in the fruit and vegetable sectors. The population that has agricultural occupation are, by and large, elderly people. Young people from rural areas are not sufficiently motivated to enter the agricultural business as their main activity because of the low and uncertain incomes, and the hard working conditions which are the result from lack of production capacities, above all sufficient land resources for the prevailing small agricultural holdings, and the absence of investments to improve the work performances and work conditions, and even disinvestment of the existing capital over a longer period of transition. Frequently this is the reason for endorsing the agriculture merely as an activity that generates additional income, until finally abandoning the land and rural areas altogether by the young population who move to urban areas or even leave the country. The ultimate effect from this negative spiral is further reflected to land capacities which, because of the unfavourable structure of size and fragmentation, from being the limiting factor for profitable production, eventually become degraded and abandoned natural resources and unused factor of production. According to AFSARD data, out of the total number of agricultural holdings who applied for financial support in 2010, only 13.5% are headed by young farmers aged under 40. The 2005 World Bank report on poverty assessment concludes that employment in agriculture sector only serves as social mitigation and helps mitigate poverty and unemployment, especially in the circumstances of high unemployment rate outside the holding. The comparison between exclusively agricultural households, mixed households (engaged in agriculture on private properties, and where at least one member of the family is employed outside agriculture) and households without agricultural properties, shows that mixed households produce highest incomes, and then the agricultural households. The non-agricultural rural households are the poorest ones. Studies have shown a trend towards diversification of non-agricultural employment resulting from the economic need (to a lesser extent, attitudes towards agriculture) and confirm the 20 positive correlation between income and number of non-agricultural activities that households undertake. Road infrastructure The infrastructure in rural areas, compared to the conditions in urban areas is significantly poorer. Disparities are particularly visible in the infrastructure of the inhabited areas, but also with regards to road infrastructure outside inhabited areas on the level of local roads and inner country lanes, which are the basis for the development of agricultural activities as key economic activities in rural areas. According to the IPARD programme 2007-2013, road infrastructure in this country includes 3,058 km regional roads and 5,606 km local (unclassified) roads, of which about 50% are dirt roads and otherwise completely unimproved, whereby regular maintenance and occasional repairs pose a serious problem. The local road network is unsatisfactory from the aspect of its total length, primarily with regards to the inter-connection of inhabited rural areas, but also in regards to access to arable land, and also to the access to the existing or potential sites suitable for rural tourism development. In addition, the condition of the existing local lanes is also unsatisfactory from the aspect of their quality, as they have not been renovated over an extended period of time. Because of the fragmentation of parcels, which are small in size and dispersed on several different locations and belong to different owners, the network of earth tracks for access to the agricultural land is frequently very dense, constructed in an improvised way without the use of construction mechanisation or plans, and in many occasions these lanes crosscut the very arable land. This leads to a unreasonable loss of agricultural land, which, due to the poor spatial organisation of land parcels, is unproductively lost in lanes and boundaries. The polls carried out by the regional units of MAFWE confirmed the pronounced need to organise the inner country earth tracks leading to individual land parcels. These tracks are either non-existent, and the path usually leads across the actual parcels, or are in poor condition and are in need of reconstruction. At the same time, because of the need for a new road network and transport infrastructure, or reconstruction of the out-dated ones, intensive processes were launched over the last few years in the country for their construction and expansion. Frequently, the implementation of transportation infrastructure projects on the national or local level gives rise to situations that cannot be surmounted by mere indemnification to the farmers whose land has been expropriated, because the newly-created situation of division of parcels in inefficient portions, or the increase in the distance between the newly created portions, in fact exert a long-term influence on the agricultural activity as the primary occupation for the rural population. Land reparcellation or land exchange that will make it possible to concentrate the parcels on one side or the other of the created physical boundary can only be achieved by way of land consolidation projects. Irrigation systems Without irrigation one cannot expect to see the development of Macedonian agricultural production. Irrigation must become a compulsory measure in the functioning of the new investments in perennial plantations (fruits, above all), vegetable production and feed production (forages, above all). Out of the total arable agricultural land in the Republic of Macedonia, around 400,000 ha are suitable for irrigation. A great number of irrigation systems have been constructed over the past years, and they cover about 173,000 ha, and a more detailed irrigation network covers about 127,000 ha. Because of the insufficient functioning of the irrigation infrastructure, land use reassignment from agricultural to construction land, and construction of construction facilities, this area has become significantly reduced. As part of the hydro-systems, hydro-amelioration systems and irrigation systems, the following has been constructed for the purpose of irrigation: 17 large dams and over 100 small 21 dams, and around 1,400 km main channels and around 6,800 km detailed channel network of pipelines and canals. For the purpose of agricultural land drainage systems have been constructed covering an area of around 70,000 ha. Table 13. Potential and actually irrigated area in the Republic of Macedonia in the period 2005 2010. This situation, from the aspect of utilisation of the irrigation systems and their functionality can be overall assessed as unsatisfactory. The reasons for the failure to utilise the available capacities are varied, but include the lack of lower level – tertiary – irrigation network and equipment in most of the systems, as to date most of the water is supplied only to the level of secondary network. Further on, the need to reconstruct the existing network is evident, because almost all of the systems are more than 40 years old, so that the technical condition expressed by way of output capacity of the main channels and the secondary network is significantly smaller from the originally designed, with a tendency for further reduction. The technical designs of the times when the systems were projected and constructed, and in particular the crops which were dominant in those days, are drastically different from the current needs. In the period between 1995 and 2000 the water management companies had to face hard organisational and financial situation, without any funds for maintenance, and although certain reforms were initiated in the sector, the destruction of entire portions of the systems could not be prevented. The failure to use the systems for several years, especially in the open-channel systems, has caused serious damages and consequences that require the construction of new distribution facilities (secondary and tertiary network). Deterioration of the hydro-amelioration systems resulted in unsatisfactory level of service, unregulated water supply, reduced performance in water use and great loss of water. The transformations of the entities that conducted the maintenance and exploitation of the hydro-amelioration systems, was implemented by liquidation of the old ineffective water management enterprises and establishment of new entities to manage the irrigation systems. 12 water management enterprises and 3 public enterprises were established to implement the water management activities as public legal persons according to the Law on Water Management, whereas according to the Law on Water Communities 145 water communities have been established, covering an area of around 68,000 ha (and 17 new ones are in the procedure of being established). The experiences from the operation of the water communities show that the larger part of them are not capable of sustaining the investments for building the non-existent tertiary network or replacement of the uneconomical installations which are wasting the available water resources. Apart from the lack of funds to maintain and renovate the existing irrigation networks, fragmentation of the land parcels makes it impossible to design and implement sustainable projects for new capital investments. In view of the actual situation one of the major challenges of the competitive agriculture and adequate management of the negative consequences from the climate changes, the need becomes evident for permanent investments in the water management infrastructure, both for the upgrading, reconstruction and repairing of the existing one, and construction of new facilities. A Year Potential irrigation area (in ha) Actually irrigated area (in ha) 2010 123,864 22,344 2009 123,864 22,603 2008 123,864 21,570 2007 123,864 22,161 2006 123,864 18,334 2005 123,864 20,739 22 particularly special attention should be given to the investments in the existing systems for the purpose of changing the type of distribution network (open channels to be replaced with pipelines). In this process the prerequisite should be considered to adjust the designs to the actual situation with the beneficiaries, which is probably very difficult to achieve in the circumstances of the existing unfavourable land structure because of the great number of beneficiaries with small areas of land and fragmented parcels. With the degradation of the hydro-amelioration systems, part of the farmers started installing boreholes and wells with pipelines on their own for irrigation of their land parcels, in particular for vegetable production. It has been estimated that 200,000 rural households use water from 100,000 irrigation wells across around 5,000 ha agricultural land. With the increased interest in agriculture, and in circumstances of unorganised expansion and modernisation of the irrigation network, one might expect a further trend of building individual irrigation systems the use underground waters, especially in case of high-value crops (grape plantations and glasshouse vegetable, etc.). Pumping out underground waters by way of individual approach and unregulated use may potentially cause serious problems regarding the pumping rate and quality of the underground water resources in the future. Agro-ecological aspect and its relations to the land structure Nowadays, and particularly from the aspect of the European view of rural development policies, agriculture is not only limited to being an economic activity that produces food products for the people focusing on the productivity and yields growth, but equally includes such elements as sustainable management of land, water and forest resources, protection of living organisms in the natural eco-systems and contribution to the global climate system. This is why the responsibility and the activities for socio-economic and environmental aspect become an issue of joint efforts of private and public entities in the rural areas. Effective protection of waters and forests, of waterways and water basins or protected areas primarily entails their clear demarcation from the intensive production activities, and clearly defined responsibilities and tasks for the entities in those areas, who, by way of land consolidation, were given clearly defined properties and parcels with ownership rights. According to NARDS 2007-2013, the section on environmental priorities and agriculture related problems, states that land abandoning, especially in the marginalised areas, leads to loss of biodiversity, meaning it can cause deterioration to full extinction of the semi-natural inhabited areas and traditional landscapes in the areas in question. Traditional management of ecological areas and small incomes, highly varied agricultural crops, mixed animal production, which used to be of great importance for the natural habitats, have disappeared in many marginal areas that bear great significance for the environment. The same document underlines the environmental problems related to irrigation, i.e. inadequate water use due to absence of adequate irrigation system. Although the irrigated land in Macedonia marks a dropping trend over the past 15 years, the construction of new hydro amelioration systems, low level of efficiency and increased water supply impose an increased demand for water, especially during dry spells when the water level in waterways becomes low, and for the purpose of protecting the fish, other fresh water species and their predators, the preservation of biological minimum should be secured. Water-saving irrigation techniques (dripping systems, for example) may alleviate the pressure on the restricted water resources and reduce the use of agro-chemical products. Because of the mutual interrelation and complementarity, the European policies have the intention to make the rural development measures and implementation projects become as much integrated as possible with interdisciplinary approach. In consideration of the fact that it integrates elements of village revitalisation policies, rural areas development, and the regions, agricultural land consolidation is an excellent instrument to implement rural development projects with multi layered objectives and intentions within a single consolidation project, such as: 23 Land structure improvement as the basis to improve the agricultural production (reduction of fragmentation and enlargement of agricultural holdings, improvement of parcels’ shape, and their location in relation to economic facilities), Implementation of projects on nature protection and sustainable use of natural resources (harmonisation with the European regulation Natura 2000 and the Waters Framework Directive), Infrastructural projects on the national and local level (such as: construction of new motorways, railways, local roads in rural areas and approach roads to land parcels, and projects on waterways regulation so as to prevent floods or erosion of fertile soils, construction of buffer strips, etc.). This is why, not by accident, according to the contemporary approach in European countries, land consolidation in many countries is used as an instrument for agricultural land management, but also as an integral part of the wider rural development aspects. I.6 Abandoned agricultural land and agricultural land market In addition to the possibility for direct intervention by the state through consolidation projects, in circumstances of a functional land market consolidation takes place through individual, informal and spontaneous market transactions of purchase and sale or leasing of land initiated by individuals based on their own economic interests. In such circumstances the state does not have direct participation in the market-based consolidation, rather has indirect and restricted impact by creating normal conditions for the functioning and development of the instruments in the market itself. The unfavourable agricultural land structure in the Republic of Macedonia, with small holdings which have fragmented land parcels, besides from the key reasons of historic restrictions in ownership of agricultural areas and the inherited customs, is to a great extent resulting from the insufficiently developed market of agricultural land. Although there is lack of clear indicators, the greatest number of land transactions in the country include transfer of ownership due to inheritance, followed by leasing of land which is seldom officially registered, and the purchase or sale of land. According to the research carried out by the SSO, majority of agricultural holdings, as much as 82%, use their own agricultural land, and only 18% provide the land through various forms in the market. Table 14. Total land available and total and borrowed agricultural land in use Number of individual agricultural holdings Total available area of land in ha Agricultural land in use Total used land Own land Leased from others 192,082 323,392 282,830 232,935 82% 52,314 18% Source: SSO – Notification of 30.12.2010 The agricultural land market in the country is not sufficiently functional and dynamic. Factors influencing the mobility of land parcels include the great number of cases of unresolved ownership due to unregistered inheritance right, abandoned land, unresolved ownership right due to legally incomplete arondation processes, and the incomplete denationalization process. Cases of joint ownership over land also hinder the sale of land as it required consent by all owners, especially in cases when one of the owners has been staying outside the country for a longer period of time. Although many such cases were surmounted after 2007 largely motivated by the pronounced state support, the unclear or joint titles to ownership and the unexecuted physical division of land are still present in 20-30% of the arable agricultural land. 24 Even though inheritance by way of legal procedures is one of the main factors for the negative situation and the pertaining trend of land parcels fragmentation, the incomplete and unresolved cases of ownership and consequently the physical division of land pose a problem in putting these land resources in use or placing them on the market. The poor land market which does not contribute for consolidation of agricultural holdings in a market way, and also the low economic growth and the lack of social security, keeps feeding the fragmentation process and production diversification of small parcels. Farmers who wish to enlarge their land are also facing the problem of providing sufficient turnover of cash to buy the land, and at the same time access to credits for rural areas is limited due to high interest rates, lack of credits provision and strict banking policies of crediting the rural population. This increases the transaction costs which, compared to the land value, discourage the farmers from buying land. Because of the insufficiently mobile agricultural land market and supply, the major method of agricultural land transfer remains by way of land inheritance which leads to a further reduction of properties. In addition to this, resulting from the governmental policies on enhanced agricultural support after 2007, the value of agricultural land has increased, in particular in the regions with intensive agricultural production, and along with that has increased the interest by potential inheritors to participate in land ownership. Land mobility often becomes reduced by the tradition that agricultural holding remains in ownership by the oldest family member until the end of his life. Another factor that fails to contribute for the development of a functional land market is uncertainty for investments in other alternative opportunities (from saving to real capital investments, or participation in the market of capital) whereby the capital realised in land (or in real estate, in general), even if not engaged as factor of production, still remains to be the “most likely the most certain investment”. This public stance is backed up with the lack of fiscal or other forms of obligations relating to the agricultural land ownership. State-owned agricultural land is not subject to sales, but nevertheless represents an active resource in the agricultural land market by way of leasing it to persons interested in its cultivation in a procedure prescribed by the Law on Agricultural Land. This law also prescribes the priority right when buying privately owned agricultural land to the owners, neighbours and the state, but the latter de facto is not at all part of land policies ever since its legal regulation. With regards to leasing the privately owned agricultural land, most of the smaller farmers borrow land from their relatives or fellow-villagers without concluding a formal leasing agreement, and mostly with a shorter deadline for the production of annual crops. Leasing of agricultural land is a frequent practice; however, due to tax evasions this land market is entirely informal with transactions which are not recorded, and therefore the beneficiary of financial support are most frequently the owners, and not the users of the land. The intensive migration especially from the passive areas with limited production opportunities which was going on continuously since 1960s onwards, and the unattractiveness of agricultural production since by the end of 1990s until 2007, resulted in a complete abandoning of vast areas of arable agricultural land, part of which consequently changed into other crops, pastures or forests. Failure to cultivate the agricultural land due to internal and external migrations is becoming the major reason for abandoning of agricultural land, in contrast to earlier times, when besides the migration, the key reason was the unattractiveness of the agricultural activity due to small and uncertain incomes. On the other hand, in some parts of the country there are contradictory cases of existence of abandoned land which is not cultivated and whose owner is not known, and the need for additional land for enlargement of agricultural activity in the very same region. Land which is no longer used for agricultural activities, besides failing to contribute to the rural economy, at the same time increases the risks of fires. 25 I.7 Policies and laws on agricultural land management in the Republic of Macedonia and other land policies Historical overview of land policies and relevant laws Enlargement of land properties with focus on the state-owned land, or the social agricultural land that was managed by the agricultural combines in the past was based on the Law on Arondation of 1976. This process was administered by municipality councils, frequently by pressuring the private land owners into taking part in the process. A portion of the exchanges that have taken place under this law have not been completed by legal registration in real estate cadastre, and considerable amount of the archives of contracts was lost with the collapse of the agricultural enterprises in the transition period, which resulted in many unclear property registrations. Because of the negative experiences from the earlier agricultural land enlargement processes that were implemented by force under this or other laws10, part of the farmers in the country still nurture this negative opinion of the procedures relating to the organisation of privately owned agricultural land by the state. By 1984, the site of area of privately owned agricultural land was also regulated by law. The size of agricultural land that could be owned by an individual farmer was fixed to a maximum of 10 hectares, or an area of 20 hectares in hilly-mountainous regions. With the objective to start the processes of active agricultural land enlargement policies in 1990 the Law on Commasation entered into force. The law included procedures for land fragmentation management and gave opportunity for parallel implementation of infrastructural investments in agriculture, but it was never really effectuated because of the social and economic transition. Because of its discrepancy with the new political system, the Law on Commasation was revoked by the Parliament of the Republic of Macedonia in 2009. Strategic and policy document related to agricultural land management The current policies in the Republic of Macedonia relating to agricultural land refer to management policies for the state-owned agricultural land and pastures, their land use reassignment into different type of land, and to a lesser extent the agricultural land protection is regulated and implemented. There are no policies for enlargement of agricultural land, and in general more comprehensive consolidation and organization of agricultural land. The highest strategic document in the Republic of Macedonia, in its section on agriculture and rural development, the National Agriculture and Rural Development Strategy 2007-2013 (NARDS 2003-2013) considers land fragmentation to ne one of the most serious obstacles for sustainable development of agricultural production in Macedonia. On page 25 NARDS 2007-2013 says that “in the long run, the existence of small and very fragmented farms, even with levels of production of medium intensity, cannot provide a more intensive modernisation and mechanisation which results in lower competitiveness.” According to the strategy, most of the agricultural holdings belong to rural households up to 2 ha (split into quite larger number of individual parcels) which limits the production mainly for the needs of the household and for sales of the surplus merely as strengthening of the family budget with yet another source of income. In the strategic provision of NARDS the accomplishment of the key objective – increased competitiveness – should be achieved, inter alia, by enlargement of the size of sustainable (market oriented) family farms, whereby “the efficient use of land hindered by the small, fragmented and parcelled private farms (which are prevailing in Macedonia) with out-dated production technologies, wide dispersal in rural areas of farms for the needs of the household, informal economy and the slow development of market” are pronounced as areas where the interventions 10 According to the Law on Agrarian Reforms and Colonisation of the Territory of the Federal Republic of Macedonia (1945 FPRY), Basic Law on Treatment of Expropriated Confiscated Forest Properties (1946 FPRY), Law on nationalisation of Private Business Enterprises (1948 FPRY), Law on Confiscation of Property and Implementation of Confiscation (1946 FPRY) 26 should happen, and that “on its own, the existence of modern, efficient and market-oriented production cannot compensate for the overall situation”. Further on, and in line with the “enlargement of the size of sustainable (market-oriented) family farms, reduction of parcellation and simultaneous prevention of further fragmentation (reduction of parcel size)” the strategy provides the basis for introduction of new and adequately designed and synchronised policies and also new legal regulations relating to land demarcation, fiscal sphere, encouragement of consolidation and strengthening of land market, all the way to privatization/ long-term lease of state-owned land, and adoption of land consolidation programmes (NARDS 2007-2013, p. 93). The strategic determinations of NARDS 2007-2013 for the introduction of active policies on changing the unfavourable structure of agricultural holdings have been adequately translated into operational objectives of the four-year Work Programme of the Government of the Republic of Macedonia for the period 2011-2014. In the section of the programme which refers to agriculture, forestry and water economy, elaboration of agricultural land consolidation strategy with an action plan and corresponding amendments in the legal regulations have been set as one of the activities for agricultural land enlargement. The launching of the first more intensive activities for that purpose, and above all pertaining to agricultural land exchange, provided with technical and financial support by the state when exchanging the agricultural land, has been scheduled for 2012. The programme envisages the implementation of measures for reduction of privately owned land that is not cultivated over a longer period of time, and based on the elaborated study on reasons thereof and best solutions. Legal regulation of land policies The main legal document regulating the policies on agricultural land is the Law on Agricultural Land (The Official Gazette of the Republic of Macedonia, No. 135/07, 17/08-correction, 18/11, 42/11-correction, 148/11). The law regulates the use, disposal, protection and permanent or temporary land use reassignment for non-agricultural purposes. According to Article 17, state owned agricultural land cannot become subject to sales. The state-owned agricultural land is given for use to interested persons in a prescribed procedure by way of leasing for certain amount of rental fee, or by way of usufruct to socially unsecured persons without any compensation in a transitional period. Leasing of land can be implemented by way of public announcements, public calls or direct agreement. With regards to the accomplishment of agricultural land enlargement objectives the existing law only gives the opportunity for exchange of state-owned agricultural land for privately owned agricultural land, if such conditions have been provided that guarantee enlargement of agricultural parcels. Along with these provisions, the amendments to this law made in 2011 introduce regulations that are aiming at the prevention of further reduction of land parcels by way of restricting their physical division. Namely, the privately owned and state-owned agricultural land may become subject to physical division between owner or joint owners only if the cadastre parcel is covering an area larger than 2 hectares. In addition, when expropriating agricultural land, Article 15 of the Law prescribes that with the objective to prevent the fragmentation of agricultural parcels, and for the purpose of a more rational use of agricultural land and application of modern agro-technical, agro-ameliorative and hydro-ameliorative measures, in case of sale priority right is given to: the joint owner, co-owner, and neighbours whose land borders the land subject to the sale. Law on Agriculture and Rural Development (The Official Gazette of the Republic of Macedonia No. 49/10, 53/11) is a systemic law on agriculture and rural development that regulates the fields of financial policies and support to the development of this sector, which are then defined in the National Agriculture and Rural Development Strategy, and implemented through the annual financial support programmes for agriculture and rural development. 27 Article 73 lays down the opportunity to support investments in infrastructure so as to create the preconditions for agricultural development, and which purpose is to develop infrastructure for access to agricultural land and forests, consolidation of agricultural land and improvement of agricultural land, protection of agricultural production damaged by natural disasters, electric power supply, water supply and water management. Agricultural holdings, entities, units of the local self government, water management enterprises and water communities have the right to apply for this support, the amount of which for the non-productive investments can equal 100% of the acceptable costs. In addition to this, Article 100 of this law foresees the approval of state support to agricultural land enlargement with the purpose of covering the legal and administrative costs deriving from the agricultural land enlargement procedure, such as costs for analysis of the physical and chemical features of the soil. Law on Pastures (The Official Gazette of the Republic of Macedonia, No. 3/98; 101/00; 89/08; 105/09; 42/10; 116/10) regulates the management and use of state-owned pastures and prescribes the procedures for allocation of pastures through public announcements for conclusion of multiannual agreements for high-mountainous pastures and granting of use of pastures in the immediate vicinity of rural settlements. Law on Water Management Enterprises (The Official Gazette of the Republic of Macedonia No. 85/2003) regulates the foundations, organisation, operation, financing and control of the work of the water management enterprises. Simultaneously with the Law on Water Management Enterprises, the Law on Water Communities was also adopted (The Official Gazette of the Republic of Macedonia No. 51/2003), which regulates the conditions, manners and procedure for the foundation, registration, operation, supervision of work and termination of water communities. Other strategies, policies and laws relating to land consolidation: Strategy for Sustainable Development of Forestry includes also the objective to implement the consolidation (Chapter 4.2) "Introduction of consolidation for the state owned and privately owned forest land”: “To restrict the fragmentation of forests by stimulating the consolidation of privately owned forest land”. Law on Nature Protection (2004) regulates the protection of nature, protection of biodiversity and diversity of landscape, and protection of the natural heritage in the country. Consolidation may be a very efficient instrument to support the objectives of nature and landscape, with regards to the EU Natura 2000. Spatial Plan of the Republic of Macedonia (Strategy for Spatial Planning of 11 June 2004) regulates the use and protection of natural resources and agricultural land. Consolidation can support the objective to strengthen the production characteristics of the agricultural land and to strengthen the solvent structure of the agricultural land striving towards a larger food production. Fragmented parcels have been mentions in the spatial plans in the chapter referring to agriculture, where the legal framework describes how to prevent the further fragmentation of agricultural land and which steps need to be taken to initiate enlargement of small land parcels. The Spatial Plan underlines the policies on waters, in particularly stressing the importance of water supply and irrigation, pointing out that consolidation is required to support such infrastructural plans. Resolving the land fragmentation and improvement of farm structure in the irrigation systems will lead to an increased agricultural production and strengthened competitiveness, and the irrigation will become more cost-efficient. Law on Property Tax (of 6 September 2004), in its Article 8 lays down tax exemption from property tax for agricultural land used for agricultural production, whereas Article 25 lays down tax exemptions from the tax on real estate traffic in consolidation and expropriation procedures. Law on Denationalization (The Official Gazette of the Republic of Macedonia No. 20/98, 31/00, 43/00, 42/03, 44/07, 72/10, 171/10) defines the conditions and procedures for restoration of property, and the type, conditions and procedure for compensation of property expropriated for the benefit of the state from 2 August 1944 onwards. 28 Law on Forests (The Official Gazette of the Republic of Macedonia No. 64/09, 24/11, 53/11) in Article 17 lays down the opportunity to exchange state-owned and privately owned land for the purpose to enlarge the area of forest in a procedure almost identical to the one of exchange of agricultural land. This procedure is not extensively implemented in practice. Current land policies Until 2012 no active policies were implemented in the Republic of Macedonia in line with agricultural land consolidation and enlargement. As of 2007, in accordance with the objectives set by the Government of the Republic of Macedonia for allocation of the entire available agricultural land, an intensive distribution of available state-owned land parcels in size of 10 hectares has been carried out. An overview of the allocated land to date is given on page 12 of this document. Pertaining to other provisions of the Law on Agricultural Land possibilities for exchange of state-owned with privately owned agricultural land are part of governmental policies. To date no procedures have been implemented for the purpose of enlargement of agricultural land by way of parcel exchange. State-owned agricultural land, which is becoming increasingly less available thanks to the intensive distribution process, can still represent a significant land resource for the future land parcels enlargement and consolidation policies. Provision of the Law on Agriculture and Rural Development which provide for the application of instruments to support the land enlargement process were for the first time integrated as part of the national Financial Support Programme for Rural Development in 2011 through the measure for full coverage of the administrative costs derived from the agricultural land exchange between private entities for the purpose of enlargement. As it was introduced just recently and requires greater promotion, this measure is used only insignificantly. The consolidation support measure has not yet become an integral part of the IPARD programmes co funded from the fifth component of the EU pre-accession assistance. With the objective to assess the obstacles and opportunities for land consolidation, as of 2009, MAFWE, supported by the Dutch Government, has started implementing projects that should enable the establishment of basic land consolidation policies, as well as pilot activities for voluntary land parcels exchange in pilot regions of the country. Piloting activities aiming at parcels enlargement were undertaken in the Municipality of Konče in the course of 2011, and the previous attempts in the villages of Taor and Novaci have clearly demonstrated the awareness and initiatives of the farmers, and also of the local self-government in rural areas, to participate in the future consolidation projects so as to surmount the existing unfavourable situation. I.8 Institutional set-up Ministry of Agriculture, Forestry and Water Economy is the institution competent to manage the natural resources – water, agricultural land and forests. However, when it comes to management of agricultural arable land, pastures and forests there is division in the managerial competences, both from institutional aspect, and from the aspect of various prescribed procedures according to laws regulating each field. For example, management of state-owned land under forests and pastures is within the competence of public enterprises established for that purpose. State-owned agricultural land is within the competence of the MAFWE’s Sector for Registration and Management of Agricultural Land. The exchange and land use reassignment of state-owned land is approved by way of decision by the Government upon proposal by MAFWE. Although changing the land use from arable land to pastures and vice versa is a process that can be executed in a rather short time period, and in practice the real use of land frequently 29 does not correspond to the notifications in documents, their management is nevertheless regulated in a special way. Units of the Local Self-Government have no competences with regards to state-owned agricultural land, forests and pastures management, except for the management of smaller protected sites. But when it comes to communal sphere, including the local road infrastructure and country lanes, the local self-government units are the ones that have the competence and responsibility to construct them and maintain them. Article 9 of the Law on Public Roads lays down that local roads and streets in inhabited areas are defined by the Municipality by way of taking a Council Decision. For the purpose of implementing activities relating to the planning, funding, construction and reconstruction, maintenance and protection of local roads and streets, Article 20 regulates the establishment of Local Roads and Streets Fund, which organization and competences are prescribed by the Municipality. The legally defined share of funds for construction, reconstruction, maintenance and protection of the local roads is 19%, and for the 14% of the total funds allocated to public roads in the Municipality. Municipalities are also the ones who set up a Commission for Definition of Agricultural Land Value, which defines the value of agricultural land in an official document approved by the Council of the Municipality. The land value is represented in cadastral areas by values which are predominantly assessed by various cadastral classes, as given in the property sheets. Agency for Real Estate Cadastre is the responsible institution for implementation of activities relating to introduction and management of real estate cadastre, management of geodetic-cadastral information system, and the creation, maintenance and public access to the National Infrastructure of Spatial Data. AREC has the capacity of a legal entity with rights, obligations and responsibilities defined in the Law on Real Estate Cadastre, and for its operation reports to the Government of the Republic of Macedonia. AREC competences include: creation and management of the geodetic-cadastral information system, implementation of basic geodetic operations, real estate surveying, registration of real estate rights, establishment and maintenance of real estate cadastre, geodetic operations for particular purposes bearing importance to the Republic of Macedonia, production of topographic maps of the state, keeping the register of spatial units, introduction, maintenance and provision of access to the national infrastructure of spatial data, supervision of the operation of individual legal entities (authorised surveyors) and trade companies dealing with geodetic operations. Authorisations for fieldwork activities on land demarcation, and land parcels identification and surveying is transferred to licenced private companies. Water management enterprises and water communities. Water management is a legal entity sui generis that implements activities relating to water management which are of public interest. Water management is a public legal entity that carries out cost-efficient management, use, maintenance and control of the systems overall. Water management enterprises are in charge of the maintenance of primary and secondary irrigation network. Water communities are associations of owners or users of agricultural land joined together for the purpose of use, management, maintenance, construction, reconstruction and upgrading of small irrigation and/or drainage systems and the sections and/or distribution network of the hydro ameliorative systems. The Community has the capacity of legal entity and is a non-profit, and is competent in the organization and maintenance of the tertiary irrigation network. I.9 European experiences and policies on agricultural land consolidation EU rural development policies place great importance on agriculture and forestry, particularly to natural resources use and management in the rural areas, and hence to the very agricultural land as the basic natural and production factor. Many of the Western European 30 countries, EU members, have a long tradition in agricultural land consolidation. In Denmark, for example, land consolidation programmes have started more than 200 years ago with the land reforms of 1780. The modern consolidation practices begin after World War II, whereby until the 1970s the main focus was placed on the improvement of agricultural structure by reducing the fragmentation and increasing the size of the holdings. Twenty years ago, land consolidation has shifted from an instrument focused on agricultural holdings to an instrument for sustainable land management which should include the general public needs regarding the land, above all environmental and landscape protection. The third important momentum took place when the agricultural land consolidation was identified and included as a necessary part of the European cohesion policies on rural areas development. In most of the EU countries agricultural land consolidation is an integral part of a wider context of rural development and is often implemented through rural development programmes co funded by the EU. The most recent EU Council Regulation on rural development support (Article 30 (Axis I) of the Council Regulation (EC) No. 1698/2005) defines the land consolidation as one of the activities supported by the programme for the purpose of increasing the competitiveness of agriculture and forestry. In Axis I, which refers to the improvement of competitiveness of agriculture and forestry, in Sub-Point 2, which defines the conditions and measures aiming at restructuring of the physical potential and promotion of innovations, Article 30 foresees the land consolidation as one of suitable measures. The new member states after the 2004 and 2007 enlargement have started the necessary preparations to introduce practices for land consolidation, and in many of these countries these practices are being implemented as part of their regular policies. Consolidation is used as a project for reduction of parcel fragmentation by way of systematic exchange with the purpose of improving the agricultural structure, frequently in combination with improvement of rural roads, water management, land organization, ecological corridors, eco-tourism, environmental aspects, etc. There are various instruments in Europe, from voluntary to legally regulated consolidation with compulsory elements, in various proportions, from small and simple projects to large, integrated and complex projects. Frequently, consolidation is combined with the actions of buying, exchanging or selling of agricultural land, which is implemented by special institutions actively involved in the consolidation process, called Land Banks. The organisational form of implementation of policies in the EU countries is predominantly in the form of special consolidation agencies closely related to the competent ministry of agriculture. With the objective to share the experiences and knowledge between countries, European networks such as LANDNET have been formed, where more than 20 European countries participate. Annex 2 gives an overview of the parcel size in a number of European countries which have less favourable land structure than the European average, so as to contrast it with the situation in the Republic of Macedonia. 31 I.10 SWOT analysis of the situation with land structure With the objective to find out the best approach to the consolidation strategy, below follows summary of strengths, weaknesses, opportunities and threats relating to the situation with agricultural land (SWOT). St re ng th s • Agriculture is the main economic activity in rural areas and is the third most important branch of economy • Favourable natural conditions for the development of agricultural activities (soil, climate, tradition, regional acknowledgement, etc.) • Agriculture is one of the priorities of the national economic policy and has been the subject of serious reforms and introduction of new policies over the last five years • Certain institutional development has been achieved, especially in the state-owned agricultural land management • Land denationalization is in its final stage • Resolution of the legal ownership relations has significantly improved compared to the previous period • Real estate cadastre improves the availability of updated land property information • The Government has identified the issue of competitiveness of agricultural enterprises in a number of strategic documents and has made it operational in its work programme • Increased interest to work in agriculture and the need for additional land resources in the vital rural regions with positive trend among young farmers • There is an ever growing awareness about the need to enlarge the parcels so as to improve the overall competitiveness and a great initial interest for consolidation among farmers in the country • There are data available (e.g. cadastre, leased land register, land value classes, and maps) • Previous positive experiences from operations with large land parcels and existing legal regulations for prevention of fragmentation • Initial experiences with voluntary exchange of privately owned agricultural land in the pilot regions are positive and have been executed without significant problems • The available state-owned land can be used for enlargement of land properties • Rural areas have huge biological diversity and exceptional landscapes 32 W ea kn es se s • Small size of land properties, large number of fragmented parcels with irregular shapes and at a great distance from the settlements, which has direct negative impact on increased costs and reduced competitiveness • Insufficient local roads and country lanes of poor quality • Non-renovated irrigation network and lack of irrigation network in certain areas • Exceptionally poor organisational capacities and investment opportunities of the water communities for investments in efficient and economic irrigation systems • Poor planning and investment capacities for primary and secondary irrigation network in the water management enterprises • Individual irrigation water catchments by welling • 20-30% unresolved legal ownership relations with incomplete ownership and arondation procedures • Considerable area of abandoned and uncultivated land • Fast urbanisation of quality agricultural land • Poor realisation of the agricultural land exchange procedures between state-owned property and privately owned land • Unintegrated approach to the management of state-owned natural land resources (arable land and pastures) • Inadequate regulation of the pastures allocation management • Insufficient general knowledge of the land consolidation opportunities and benefits from it for the farmers and the general public • Absence of legal regulations on agricultural land consolidation • Absence of active land consolidation policies in the country • Insufficient financial support to the consolidation process • Insufficiently functional land market with great number of informal land lease agreements • Lack of policies and measures that will have side effects on the negative processes of land reduction and fragmentation O pp or tu ni tie s • Opportunities to use the potential of the abandoned land for the increased needs in the sector • Certain visible effects from the changes in the unfavourable structure due to the large development potential of agriculture, and other already provided conditions for the development • European policy prefers integrated approach in implementation of systematized rural and regional development policies • Harmonization of objectives and intentions of the national policy with farmers’ interests • Pre-accession IPARD funds provide money for land consolidation that can increase their absorption • Available experiences of other countries in the consolidation process and their experiences in the utilisation of European funds for this purpose • New technologies and data collection that reduce costs for insight into the land parcel situation and the best allocation with consolidation • Local self-government with greater competences and interests for the development of rural areas • Well organised farmers’ associations 33 Th re at s • Emigration from the rural areas, in particular of young entrepreneurs in agriculture who would be prepared to enlarge their properties • Scepticism by part of the rural population in the consolidation process because of their negative experience from similar processes carried out by the country in the past • Lack of mutual confidence among the rural population and lack of experience in executing operations that require common cooperation • Not fully prepared (from the aspect of financial and human resources) to set up an adequate institutional capacity – a consolidation body to implement the process • Lack of skills for moderation of the needs and expectation on the local level • Lack of interest by the local self-government and lack of will for co-funding • Preparation of inadequate methodologies for land value assessment 34 PART II STRATEGIC FRAMEWORK – OBJECTIVES OF THE AGRICULTURAL LAND CONSOLIDATION The structure of the agricultural holdings in the Republic of Macedonia is very unfavourable in terms of the size of the agricultural land parcels, their number and the distance between them as well as their distance from the inhabited areas, their irregular shape and also the access to the local roads and irrigation systems. The unfavourable structure of the agricultural land, the aging trend of the rural population and farmers, the migration from the rural areas and lack of infrastructure are the main problems that Macedonian rural areas are faced with and which hinder the competitive growth of agriculture. As the rural population is dependent on the income from agriculture which is a key activity in rural areas, the fragmentation of the agricultural land significantly affects the economic development of agriculture, thus the population’s income, social stability and sustainability of the rural areas. The situation with the fragmentation of the agricultural land is still deteriorating, thus increasing its negative impact on productivity, efficiency, costs and final incomes generated through farming activities, and finally, the very competitiveness of the Macedonian agricultural products. Small holdings produce limited quantities of agricultural products of different quality, and therefore they are inferior on the market without the possibility to negotiate with the buyers and manufacturers. Simultaneously, other forms of consolidation of the agricultural output on the market are taking place, such as establishing cooperatives, without being much accepted by the farmers and without quick results. The true size of the problem of this limiting factor for improvement of the competitiveness is notable when our agricultural land capacities are compared to the capacities of the competitive regional and European agricultural economies11. Although this situation is a limiting factor to the improvement of income and the overall competitiveness of the Macedonian agricultural holdings, the future participation of Macedonian agriculture on the free single European market following the EU accession in unchanged conditions will be a very serious threat to their existence. The small and fragmented parcels thwart the sales and lease of land, thus thwarting the development of a land market that could consolidate and enlarge the parcels. The unfavourable land structure reduces the interest for public and private investments, which directly prevents the future economic development of rural areas. Land fragmentation hinders the adequate environmental protection and the efficient use of natural resources or, notably, the very land and water used for irrigation purposes. Another serious problem related to the use of agricultural land In the Republic of Macedonia refers to the situation with the abandoned agricultural land which is not cultivated. The agricultural land which is not cultivated due to internal and external migrations, or previously due to it not being attractive for agricultural activities, leads to decreased land productivity, it hinders the land market and creates risks from increased hazard of fires. Even though farmers, especially the prevailing structure of agricultural holdings with limited production capacities, recognize the need and necessity of LC, they themselves are not sufficient and capable enough to resolve the structural problems of land fragmentation and the land consolidation problem. Due to the continuous problems and negative effects caused by the existing structure, great interest and initiatives have occurred in the past periods for farmers’ participation in projects for consolidation of fragmented land parcels which would be supported by the state. From the institutional and policy implementation viewpoint: 11 For comparison, the average farm size in Greece is 4.4 hectares, in Italy 6.1 hectares, and in Portugal 9.3 hectares (in all other EU-15 countries the average farm size is between 17 and 70 hectares). 35 Through the intensive state support measures since 2007 onwards, agricultural policy is back on the agenda of the governmental economic policies, but the effects that are being achieved are expected to reach their maximum in the frames of the existing unfavourable structural conditions, The institutions have been strengthened regarding the management of the main elements of the agricultural policy, whereas most of the processes of record keeping, distribution of state-owned agricultural land and resolution of the long-lasting problems of confiscated land are in their final phase, The denationalization processes and the processes of introducing registries and IT systems for the private and state owned land (in the MAFWE and the Agency for Real estate cadastre) are also in their final phase. Although over the last five years there has been a shift in most of the sub-sectors in terms of the increased production and export, further improvement of the competitiveness is possible only by providing more optimal farm holding structure, especially in terms of the size, shape and the wholeness of the available land and increased concentration of the offer. II.1 Strategic objective The structural problem of the small and fragmented land parcels, even if assisted by additional side measures regarding the fiscal policy, tax policy or any other policy, can be overcome with great difficulty, if even at all, if land consolidation is fully conducted under the market influence on an individual and market-oriented basis. Due to these previously mentioned conditions regarding the agricultural land market, this process will be lengthy and without a sure outcome due to the limited possibilities that best possible transactions will be made in this manner. There are many factors that support the increasing need for introducing policies for consolidation of the agricultural land, such as • The importance of agriculture for rural areas • The unfavourable demographic situation with the rural population • Fragmentation of the agricultural land as a main resource and the impossibility of most of the small-scale farmers to invest in the overall unfavourable situation with the agricultural holdings • The need for rational use of natural resources • Adequate management of state-owned land • Need for rural infrastructure improvements • Necessity to implement measures for environmental protection and mitigation of the negative impact of climate change • Overall coordination of the state interests, the public interests and the interests of private owners of agricultural land The need to undertake active policy measures in order to overcome the structural weaknesses in the agricultural sector caused by the unfavourable land structure has already been identified by the Republic of Macedonia. The main strategic documents on agriculture, rural development and forestry identify the improvement of competitiveness of the farming enterprises as a matter directly related to the resolution of the issue of the unfavourable land structure. At the same time, the main operational document that regulates the operation of the Government, or the Programme of the Government of the Republic of Macedonia for the period 2011-2014, foresees implementation of active corrective policies for the forthcoming period by adopting the National Strategy for 36 Agricultural Land Consolidation as well as appropriate legal amendments which will serve as a basis for the implementation of these state policies. Therefore, in order to increase the competitiveness of the Macedonian agricultural production and to improve the living conditions in rural areas, active policies for land consolidation of arable land will have to be implemented, aimed at meeting the following strategic objective: “Mitigation and graduate overcoming of the unfavourable structure of the agricultural land as a main resource for the economic activities in the rural areas in order to increase the competitiveness of the Macedonian agricultural production, to improve the living conditions in rural areas and to provide sustainable use of natural resources.” The land consolidation policies for agricultural land are defined as a process of overall territorial planning related to the reparcellation of land and improvement of agriculture and the existing management of the territory covered, followed by a number of measures for development of rural areas. The Land consolidation instruments will also be directed towards decreasing the number of cases with unclear ownership and involvement of the abandoned land as well as preventing such further cases. Due to the stated structural problems and the impossibility to overcome them through market operations, the multi-functional positive effects of agriculture and sustainable development of rural areas, consolidation of agricultural land is recognized as an activity of public interest. In order to achieve better results, the active land consolidation policies will be combined with adequate adjustment of other policies that affect the prevention of further fragmentation or the beginning and intensification of the consolidation of agricultural land. The positive experiences of other EU countries demonstrate that the reparcellation and land consolidation projects have the largest effect when they support infrastructural initiatives regarding the road and irrigation network but also when these policies are part of the integrated approach to rural development. Important structural changes in agriculture and forestry can take place only if land consolidation is part of the integral rural development policy. In addition to the objectives related to improvement of production and competitiveness, land consolidation will be implemented in terms of environmental protection and improvement by recognizing the different local needs and solutions. This means that land consolidation will have to contain the national and local priorities but also take an approach that involves all stakeholders in the private sector as well in the decision making processes whenever possible. II.2 Specific objectives With the purpose of achieving the overall strategic objective, future active land consolidation policies for agricultural land aim at achieving the following specific goals/objectives: 1. Decreased fragmentation of land parcels by their grouping and improvement of the location of the land plots in terms of the agricultural holding set-up, 2. Improvement of the irregular shape of land parcels so as to apply modern mechanization and production technologies, 3. Increase in the average size of small agricultural holdings, 4. Providing access from the parcels to new or refurbished irrigation systems and improved or newly-built road infrastructure 5. Decreased surfaces of unused and abandoned agricultural land, 6. Mitigating the negative effects on the optimal land structure during the construction of facilities of public interest (road, social or other kind of infrastructure) or simultaneous spatial reorganization of the existing land parcels in order to improve the existing unfavourable structure, 37 7. Improved environmental protection and sustainable management of natural resources. II.3 Land Consolidation Principles and Elements Time frame and Phasing The consolidation of agricultural land will tackle the largest structural problems that Macedonian agriculture is faced with. It is clear that this is a process that will be implemented over a longer time period, a process in which results are possible and visible only after the completion of the very land consolidation projects. As the process of restructuring of land parcels and infrastructural investments instigates changes in some of the land features, it is indispensable to make sure that the process will be implemented in a coherent and strictly legally defined way. The National Strategy on Consolidation of Agricultural Land covers the period 2012 -2020. This time period foresees the creation of all conditions for introducing land consolidation policies, starting from creating the conditions for implementation all the way to the implementation and results evaluation. Due to the complex nature of this process, land consolidation will be introduced in phases, by gradually increasing the scope and complexity of the applied policy instruments. During the first period 2012-2014, all legal and institutional conditions for land consolidation implementation will be provided and small and medium sized projects will be implemented, as simple voluntary land exchange or improvement of the structures of land use, and more complicated instruments of smaller size will be piloted while at the same time the results will be promoted and farmers’ awareness will be raised about the needs and benefits of consolidation of agricultural land. In 2015 the initial process results will be evaluated and in the forthcoming period up to 2020 the implementation of more complex integrated land consolidation projects of larger areas in the country will continue by including more serious infrastructural investments. The land consolidation programme will be implemented based on the cost-effectiveness analysis of those areas where land fragmentation is a serious problem and by proposing the adequate ways and instruments for resolving the situation. When forest land is part of the area that is consolidated or part of a land consolidation project, it will also be included in the consolidation procedures, but this is planned for the beginning of the second period covered by this strategy, following the evaluation of the strategy implementation in 2016, based on the experiences from the implemented projects that involved agricultural land, the strengthened institutional land consolidation capacities and the information systems established in forestry. Participation The participants in the land consolidation process should be prepared for active participation in the decision-making. Due to the fact that land consolidation basically means achieving a local solution on voluntary basis, the process itself foresees active participation of a great number of stakeholders, especially the farmers who participate in the process, as their cooperation is of great importance to the success of the process. Other participants involve the local government, the farmers’ associations, the land consolidation committees, the entities that provide the necessary technical services and the entities that manage the use of natural resources. In order to observe the public interest in improvement of the land structure, environmental protection, more economic and sustainable management of natural resources, as well as fostered development of rural areas, the inception and implementation of the more complex forms of landscaping, the highest administrative levels responsible for these areas will be actively involved in addition to the lower levels of the beneficiaries of this process. 38 Land consolidation will provide land owners and farmers with a fair, transparent and legitimate process at the individual level. In case of involuntary action, a firm system will be provided that will legally guarantee the individual rights. Equal or improved value The main principle of land consolidation is that the land owner must not be damaged and his/her property must not be of a lesser value compared to the property value before the land consolidation process was implemented. The difference in value that might occur will be compensated by providing a larger area when the land quality is worse, or by means of financial compensation. Due to the various factors that determine the value of the land it is important to have the adequate methodology prepared and the evaluation teams should also include respectable farmers and experts in this subject matter. Increased Agricultural Land per Holding Apart from consolidating fragmented land into a single land parcel which will enable the introduction of improved agricultural methods, all existing possibilities for increasing the size of the agricultural holdings will be used. The land that is needed for the general and common needs for construction of public facilities and joint rural infrastructure or for its improvement (road enlargement, protection of ecologically sensitive areas) will be provided in the way that land owners will renounce part of their land, and the value of this land will not exceed 5% of the total land value. Renouncing part of the land by the farmers will lead to further decreased size of the already small agricultural holdings and therefore, when land is provided for construction or improvement of the infrastructure and public facilities, priority will be given to the reserves of undistributed state owned land or the land that other farmers who want to leave the agricultural business will free by selling or leasing the land (either directly or through the land bank). Therefore free state-owned agricultural land and land that is a subject of an already concluded agreement of up to 5% of its surface (if the already made investments allow it) will be at disposal for the operations included in the land consolidation projects. The exchange of state owned land for private land which is not part of the land consolidation area will be made possible in order to increase the size of the land plots covered. Provision of Financial Resources/Funding The land consolidation process is based on the identified preparedness of the local inhabitants and the local government representatives, which is a key factor in the selection of the land consolidation area. The degree of motivation of the local community for the beginning of a land consolidation project depends on the improvements that will result from the process but also on the costs that will be shared between the central budget and the EU funds at the central level, and the local government and the individuals at the local level, due to the limited possibilities of the stakeholders at the local level. Therefore, provision of the financial funds is of exceptional importance. Land consolidation is an intense operation with long-term individual and general benefits. Due to its character as an activity of public interest and the scope of investments, funding will be provided to a great extent from the national or European rural development funds, mostly considered as state aid to agriculture and rural development. Further financial resources will be procured from the competent authorities for rural infrastructure management or from the resources related to the agricultural land and the agriculture covered by the land consolidation area, and to a smaller extent from the land owners themselves. 39 Harmonization of the Land Consolidation Process with Other Strategic and Planning Documents When land consolidation is planned, consideration has to be given to the long-term development plans of the local community or the central government of the given area. Therefore the land consolidation process planning will be harmonized with the activities foreseen in the General Physical Plan of the Republic of Macedonia, the physical plans of the units of the local self-government, the National Strategy on Agriculture and Rural Development 2007 2013, the Strategies for Rural Development of the Units of Local Self-Government, the Strategies for Local Economic Development of the Units of Local Self-Government, strategic and other planning documents in the area of environmental protection, and other relevant planning documents. 40 PART III INTERVENTION AREAS FOR IMPLEMENTATION OF THE AGRICULTURAL LAND CONSOLIDATION POLICY Intervention Areas Achieving the specific agricultural land consolidation policy objectives in the Republic of Macedonia will be possible by setting and implementing conditions, policy instruments and activities in the following areas: Selection of instruments for implementation of the land consolidation policy, Providing the legal framework needed for land consolidation, Establishment and institutional strengthening of the land consolidation policy drafting and implementation bodies, Providing funding for the land consolidation, Raising the awareness and improving the skills for land consolidation implementation, and Adjustments to the existing policies (or introducing of new policies) that directly affect the improvement of the land structure. Detailed overview of all the intervention areas for inception and implementation of agricultural land consolidation in the Republic of Macedonia will be presented further in the text. III.1 Agricultural Land Consolidation Policy Instruments The agricultural land consolidation process will be implemented through the application of several land consolidation models, depending on the real needs and conditions defined in the planning documents for each of the land consolidation projects. Depending on the content or the complexity, the budget and the implementation dynamics, the models can vary from simple to complex ones, from ones whose implementation requires less or more funds, and instruments which partially or dully resolve the agricultural land structural problems. The models that will be implemented or supported for consolidation of the land in the Republic of Macedonia are presented further in the text. Individual consolidation The individual land consolidation is an informal way to consolidate land and increase the size of land plots of land owners when and where they find their own interest and possibility. The influence of the state will be limited to providing the maximum benefits that will increase the land owners’ motivation and will facilitate and speed up the process of signing the contracts for land exchange among private land owners, exchange between private and state owned land and also consolidation of land by means of new land parcels, through purchase or lease of private or state owned land. The following steps will be made to that purpose: Drafting a study for improvement of the operation of land market in the Republic of Macedonia, Adjusting the existing policies by influencing the process that should promote and encourage the transactions with agricultural land in the forthcoming period, elaborated in more detail in Chapter III 6, Developing the measure for early retirement of farmers in the rural development programme so that young people will assume control over the agricultural holdings, and providing additional incentives for increased size of the farm property, 41 Facilitating and speeding up the processes of exchange between private and state owned land with the purpose of consolidating the land plots, as well as the possibility for exchange of two state-owned land plots that are cultivated by the same agricultural holding when they are in two different locations, Amendments to the procedures for lease of state-owned land in order to consolidate the land parcels by pre-emptive rights for acquisition of state-owned land for lease for those owners who use or possess land parcels which border with that land, but also prescribing a procedure for lease of smaller state-owned land parcels for people whose land borders with them. Voluntary Land Consolidation Voluntary exchange of land parcels is the simplest and fastest form of organized land consolidation. This land consolidation type is completely voluntary-based without any compulsory elements and previous consent of the participants in the exchange is required. The voluntary land consolidation projects are usually small and aimed at smaller local problems with the land structure usually involving less than ten owners, although larger participants is also possible. The bordering land parcels or parts of parcels of at least two owners are subject to exchange and merging, transfer or extension of the management rights as well as reshaping the borders. The outcome of this process is the increased surface of the merged parcels of at least one land plot, increased average size of the parcels or parcels closer to the farm buildings. Changes will appear in the cadastre registration of the ownership, and when borders are reshaped changes will appear in the cadastral maps. This process is beneficial in cases of developed road network and when the parcels that are to be exchanged have been previously well shaped (have a regular shape). If needed and possible, voluntary land exchange projects will be strengthened by providing state-owned or private land which can be used for in the process of additional enlargement of the size of the consolidated parcels. The projects can also involve purchase contracts and revitalization of the existing infrastructure within the new borders, but without involving construction work of public interest although the necessary conditions can be created so that they could be undertaken further on. Voluntary land consolidation is performed between the owners of the agricultural land, based on land consolidation plans and by concluding preliminary land consolidation agreements and notarized land consolidation agreements (for land exchange). The estimate of the costs for a single land parcel exchange between two owners is around 60 €12, and 400-450 €/ha per project (10 ha surface, 30 parcels, 30 days total engagement) with reshaped borders. The highest costs are related to the cadastral services. With the purpose of implementing voluntary land consolidation projects, the following steps will be taken: Voluntary land consolidation implementation in the form of a project, based on the interest expressed by a minimum acceptable number of farmers. Based on this, the local voluntary land consolidation management team implements the preparations (organizing meetings with land owners, determining the preliminary scope of the land consolidation project, establishing the land value, identifying the initial results) but also prepares the land exchange plan and the land consolidation agreement and provides support in the procedures of legal transfer of the land and cost financing. Full coverage of the administration costs for voluntary land consolidation implementation as a project or in cases when the Land Consolidation Body is not included in the activities following the legal procedures; 12 It is estimated that if the programme is offered in the whole country, 5000 cases can be expected in rural municipalities per year from 1700 cadastral municipalities in Macedonia, in 500 a farmer will participate in every ten cases of simple land exchange. The result is 300 000 € /year. 42 Prescribing the minimum criteria for voluntary land consolidation supported by the state. Having in mind the average size of the land parcels (0.2ha) and the need for economically feasible operations, minimum criteria will be defined, such as minimum size of the parcels in the process, minimum size of the enlarged land plot, minimum percentage of increased size of the new parcel or minimum percentage of increased average size of the parcels involved; Facilitation of legal procedures for exchange of private land parcels. Complex Land Consolidation In addition to reparcellation, complex land consolidation also involves activities for significant or complete landscaping through infrastructural investments. Combining the land consolidation investments will increase the investment efficiency as well as the value of the consolidated land. Together with the reallocation of land parcels the complex land consolidation can include a wide range of measures for furthering rural development, such as activities for renovation of villages, support to post-harvest activities or product processing organized at the level of the rural community, rural road construction, construction and rehabilitation of the irrigation systems, erosion control measures, environmental protection, improved natural resources protection and creating the social infrastructure, such as sports courts and other public facilities. This instrument will be used in cases when voluntary land consolidation cannot be implemented due to a complex individual situation and the necessity of infrastructural activities that require significant resource and time allocation. The area to be covered per land consolidation project will be higher, usually above 100ha. The implementation of complex land consolidation projects will most frequently come from the Land Consolidation Body based on a detailed analysis of the situation in the agricultural regions, but the proposal might also be given by the farmers, the local government or other stakeholders, following a thorough sustainability analysis. Comprehensive or complex consolidation is a legally supported process of land structure improvement and spatial and infrastructural organization in line with the accomplishment of the common interest of farmers. The comprehensive land consolidation causes great changes in the defined land consolidation area and it generally involves participation of all land owners in that area, which in some cases might imply that part of the participants in the land consolidation process will participate therein even if at start they do not give a formal approval thereof. Surely, in compliance with the principles for the land consolidation, in the processes no damage will be caused to any of the land owners in relation to the value of the land with which the owner enters the process. The successful implementation of these projects requires that they receive the local support as much as possible, and due to the high investments for the comprehensive land consolidation and the large number of participants, the beginning of the project will be approved if the size and the value of the land owners who want to participate in it is higher than half of the overall size and value of the land which is considered to be the land consolidation mass. The simple majority will be considered sufficient to approve the participants for the beginning of the project and to approve the beginning of smaller projects when there is evident need for land consolidation. The implementation of complex land consolidation is a multi-annual process when field activities are implemented in phases by a land consolidation team, based on the approval of the project and the budget for its implementation. 43 III.2 Legal grounds for Land Consolidation All the previously described elements that are an inevitable component of the land consolidation should be included in the legal framework in order to provide the legal basis for multi annual land consolidation projects. Due to the process complexity and the need for regulating a great number of aspects, the implementation procedures, preparation of various methodologies, establishing the bodies and stakeholders’ responsibilities, organizational work etc., the legal basis for the agricultural land consolidation will be provided in a separate legal act – Law on agricultural land consolidation, which will regulate all the above mentioned aspects. This law will also prescribe the adoption of the bylaws needed to closely regulate the areas defined by the law. These bylaws shall prescribe the procedures for the implementation of all the development phases of the land consolidation projects, regarding: Initiating projects, who can initiate them and what kind of projects can be initiated, the procedure and the level of voluntary or compulsory participation in the land consolidation; Defining the necessary components and the scope of the project activities so that the project can be considered an acceptable part of the land consolidation programme; Procedures for providing state-owned land reserves for the project; Mechanisms for including participants from the local partners by defining the form and the content of the bodies, but also for hiring the competent technical experts in the project drafting and implementation; Procedures for identifying the rights over the land parcels, their valorisation and reallocation; Procedures for providing effective rights over the newly-created land parcels and terminating different types of rights due to the changes made with the land consolidation, System of complaints and settling disputes, Procedures for cost compensation and distribution; and Procedures for the operation of the Land bank Legal adjustments and/or amendments are needed in order to establish a competent authority, i.e. the Land Consolidation Body and the Land Bank as its integral part, but also interventions are needed in the existing laws and bylaws that regulate the issues of agricultural land management, including pastures (forest land is included in the second phase of the land consolidation process) for prevention of further abandoning of land and increasing the dynamics of the land market. The programmes for financial support to agriculture will also be amended, especially in terms of the rural development and alignment with the IPARD programme in order to introduce the land consolidation programme financing as well as other planned measures that will support the project. One of the first activities in the inception phase of providing the conditions for land consolidation implementation in the Republic of Macedonia will surely involve the analysis of the needed legal adjustments and amendments to the relevant laws. 44 III.3 Establishment and Institutional Strengthening of the Bodies for Drafting and Implementation of the Land Consolidation Policy National Land Consolidation Body For the implementation of the complex land consolidation projects it is important to establish the competent structure for administration of the multi-annual consolidation programmes, such as the Agricultural Land Consolidation Body. In compliance with the practices of the EU member states, the agricultural land consolidation is implemented by an authorized institution which is most frequently part of the institution responsible for the agricultural land management, i.e. the ministries of agriculture and forestry. As a result of the size of the land and the need for graduate capacity building, land consolidation planning will be centralized, whereas task implementation of the local project activities can be decentralized by including the trained staff in the branch offices of the ministry. The land consolidation body is fully responsible for the detailed design and implementation of the land consolidation policy, with clearly legally defined role and responsibilities and clear relations with other relevant institutions included in the process at the central and local level. It is especially important to define the procedures regarding the financing, i.e. the settlement of project costs based on the contracts for financing of the land consolidation projects which will be carried out through the Agency for financial support to agriculture and rural development. The land consolidation body will have the key role in coordinating different administrative levels and it will initiate exchange of information and data among the institutions, the government and the farmers. The body in charge of the land consolidation process in the Republic of Macedonia will be the newly-established Agricultural Land Consolidation Directorate as a state government body within the Ministry of Agriculture, Forestry and Water Economy (MAFWE) with its separate budget. The position of the Directorate will also provide the necessary degree of independence, thus the accountability for the complex implementation processes of the multi-annual projects and enough space for coordination with the remaining directorates and sectors within the MAFWE The competent authority for management of state-owned agricultural land, The competent authority for water management regarding the use of water for agricultural purposes, Branch offices at the local level in terms of the implementation, practices and technical LC capacities, The IPARD management body in order to harmonize the formulation of the type of measures that support land consolidation for rural development. The Land Consolidation Directorate should start operating as a competent body for land consolidation at the beginning of 2013. I the meantime the projects planned for 2012 will be implemented by the Department for exchange of agricultural land which is part of the Ministry of Agriculture, Forestry and Water Economy. The Agricultural Land Consolidation Directorate will consist of at least the sectors for implementation of activities for: agricultural land management (with land consolidation team coordinators and legal and geodetic support); Land Bank; Geographic Information System and other services (including GIS and Satellite Positioning Systems, LPIS Department, IT support, automatic design of the new distribution of reallocated parcels); General and special services (legal and financial matters), Public relations, assisting staff etc. The main task of the organizational form for the implementation of agricultural land management will be to direct and lead the project implementation activities at the regional level but also in terms of larger projects of national interest. The sector will hire experts from different expert fields such as geodesy/surveying, land and water management, civil construction and in a later 45 phase environmental engineering and ecology/landscaping. The sector will also draft the implementation guidelines and the staff will also be trained and oriented at the regional level. The sector will support the branch offices of the MAFWE that will be increasingly involved in the implementation. In cases when the sector staff cannot cover all professional fields, these services will be provided by outsourcing, or provided by staff members from other sectors of the ministry, or other ministries. In that case the sector will appoint the tasks to the newly-involved experts. The knowledge and training related tasks refer to building an available data base that will contain the experience gained through the projects and the relevant knowledge. The body in charge of the land consolidation will also include the Land Bank in its structure which, order to provide efficient use of agricultural land for the needs of the consolidated projects, will: Manage the state-owned land, Perform reparcellation of the state-owned agricultural land in the consolidation projects, Purchase private land for the needs of the state or the process, Manage private land which has been abandoned during the process in order to lease it, Manage the land which has been freed during the projects for achieving general and common purposes (rural and social infrastructure etc.), Manage other privately-owned land of which it has been authorized by the individuals (for the needs of the process or following the land consolidation through sale or lease), and Provide land for other indispensable needs of the state (motorways, protected territories, concessions, energy facilities, communication infrastructure). The land bank will also facilitate the exchange of a whole land property with another one which is closer to the owner’s residence, which will lead to improvement of the land use. In all project areas where the land bank will be activated, the land management tasks and objectives will have to be defined, adjusted to the area and they will be previously published in a transparent manner. In compliance with the land consolidation plans and the land consolidation body assessment, the state-owned land which will be identified as potentially needed land (near private properties, smaller land parcels located between private parcels but planned for rural infrastructure etc.) will not be leased so that it would be used to meet the needs of the process. The Land Bank will perform fast transactions (purchase and selling, exchange and lease) with the land that it manages. The land consolidation will be implemented as a project due to the length of the implementation activities and the close relatedness of the process to a clearly defined geographic area, but also because of the need for participatory approach and active management of the expectations from the beginning of the project to the signing of the final contracts. Special Land Consolidation Project Team will be established for the implementation of every project and it will consist of a project manager appointed by the Land Consolidation Body, and other technical experts in the fields of agriculture, law, land consolidation, public affairs, environmental protection and finances. When dealing with complex projects, the management and the technical issues can be entrusted to consultants who have the required experience and skills to implement complex infrastructural projects. Having defined the consolidation approach and type and all the necessary elements, for the individual projects to start it is necessary to identify and manage the project-related risks, to provide the necessary financial report, to create the organizational connections, to provide human 46 capacities that possess the required skills, to provide the adequate technical resources and conditions for the operating of the team, as well as to have clearly defined rules for financial management and other project management related issues. Competent Bodies for Farmers’ Participation in the Process For the purposes of participation and the adequate representation of the stakeholders’ interests in the land consolidation project, especially the direct participants in the process of reparcellation – the land owners, for every individual land consolidation project groups will be formed of representatives as a way of support to perform the substantial work in the project. To that end, all the owners of land parcels that participate in the land consolidation participate in the assembly of land consolidation participants. For purpose of implementing the land consolidation project, coordination and cooperation with the participants in the land consolidation as well as for easier decision-making, a narrower work body is also established, called the Consolidation Committee. The committee consists of five to seven representatives delegated by the assembly of land consolidation participants and it is steered by the project team manager appointed by the Land Consolidation Body. Based on the complexity assessment and the scope of projects, land valuation as one of the key steps in the process will be made by the Land Consolidation Body, the hired experts (who meet the criteria stipulated by law or authorized valuators) or by a land value committee established by the Committee and approved by the Assembly. When investment activities are included in land consolidation, the Committee also includes representatives from the water management company that manages the waters on the land consolidation area, a representative from the unit of local self-government and/or other competent authorities appointed by law. Other Institutions and Stakeholders Among the different administrative bodies included in the process adequate organizational connections need to be established in accordance with the allocated roles and responsibilities. The horizontal connections are needed for coordination among the governmental institutions at the central level, whereas vertical connections are needed for establishing coordination between the central government, the local government and the local community. The establishment of this relatedness will depend on the adequate legal regulation of the institution’s roles and responsibilities. The establishment of a project management committee as part of the more complex land consolidation project management could improve both the horizontal and the vertical coordination. The roles and responsibilities of the different stakeholders in the land consolidation should be clearly defined by allocating the functions of overseeing the process, supervision, control and monitoring and the implementation itself. These are the most significant institutions relevant to land consolidation implementation: Agency for Real Estate Cadastre as a competent authority for real estate registry in terms of providing data for registration of land parcels; Units of the local self-government, to encourage the process among the farmers and for logistic and technical support and participation in the land consolidation implementation, especially if it involves investments which are in their competence; Professional organizations in the field of geodetic works, private geodetic companies, providing geodetic technical services and specific technical knowledge in the field of GPS, GIS and mapping; Farmers’ Associations, chambers of agriculture and local action groups in order to improve the awareness and increase the interest among farmers. 47 Human Resources Development The successful implementation of the land consolidation will greatly depend on the capacities possessed by the human resources of all stakeholders included in the organizational phases, the preparation, implementation and supervision, especially the new institutions at the beginning of their establishment. The human resources development will be an integral part of the continuous activities for strengthening the institutions involved, the Land Consolidation Body in particular, but also other relevant bodies within the MAFWE, and the expertise and knowledge obtained will be combined with the acquisition of practical experience through the project implementation. Human capacity building will cover the following areas: European policies and rural development programmes; Raising awareness and improving the negotiation skills; providing access to farmers through the adequate communication and participation; land consolidation policies; legislation and rural development practices related to land consolidation; Technical skills and practical knowledge of GPS, GIS, mapping, cadastral systems; Land consolidation planning and reparcellation methods and techniques; land banking etc. With the purpose of strengthening the human capacities, the institutions involved, the Land Consolidation Body in particular, will: Conduct the training needs assessment, Draft a training plan and a professional development plan for the staff, Enable learning through acquisition of practical knowledge and experience from implementing the projects. Provision of Technical Conditions For a normal functioning of the Land Consolidation Body as a new institution in charge of the land consolidation implementation, the required physical conditions/facilities will be provided within the central office in Skopje, as well as the conditions needed for the operation of the staff members in the regional branch offices of the ministry. In order to provide the facilities needed for the project teams in the regions, the regional branch offices of the MAFWE and the ASRD will initially be considered and then the adequate space will be rented if needed. For the purposes of the Land Consolidation Body, all the necessary office equipment and other types of equipment will be provided, such as field maps, maps, vehicles etc. In order to save resources and time, the necessary IT hardware will be provided with a developed software solution for physical data management, which will facilitate the process of finding the favourable combinations of land parcel distribution when the most optimal consolidation solutions are planned. III.4 Financial and strategic consolidation planning For the purpose of planning and continuous development of consolidation projects, long term, mid-term and annual operational financial plans will be prepared in line with the budget planning and budget administration process. The key planning document for agricultural land consolidation will be the Multi-annual Consolidation Programme of the Consolidation Body which will be approved by the Government and which outlines the activities of the Consolidation Body and planning of any specific complex and other projects, their dynamics and financing sources. The harmonization concerning the implementation of the Multi-annual Consolidation Programme about the necessary capacities for 48 project implementation will be made in the course of drafting the annual budgets of institutions and financial support programmes. The share of costs related to the land consolidation activities that will be covered by the state amounts from 70% to full coverage. The costs incurred for property increase or improvement of an individual agricultural holding will be covered by the holding itself or will be covered to the same extent as the support for co-financing of costs for the respective rural development measures. The state budget participation in the cost co-financing according o the type of costs will amount to: 100% co-financing of the administrative costs for the project implementation, the geodetic costs for land exchange and land consolidation, costs incurred for the transfer of ownership and costs incurred for land reparcellation, 90-100% co-financing of the costs for the tertiary irrigation network, 80% of the costs for construction and rehabilitation of the primary and secondary network of the irrigation systems, 70% of the costs for the road infrastructure up to a maximum stipulated length of local roads. The strengthening of the administrative capacities of the Land Consolidation Body and the other institutions will receive regional and European technical support for transfer of knowledge and expertise mostly by using the pre-accession support funds. Macedonia is already part of the FAO land management network and part of FARLAND. Land consolidation will be financed through: Land Consolidation Directorate annual budget: by budgetary programme for financing of the on-going costs for the operation of the institution and implementation of simpler voluntary land consolidation projects (items for salaries and contributions, travel expenditures, maintenance, contractual services for provision of technical services etc.) and special budgetary programme for implementation of complex land consolidation projects with sub-programmes for individual projects defined in the Land Consolidation Programme; AFSARD annual budget for financing capital investments included in the complex land consolidation projects as part of the multi-annual land consolidation financing programmes; Institutional Strengthening Projects, financed by the first IPA component, Twinning and TAIEX with EU resources; Other donations or credit lines provided by bilateral cooperation projects, FAO, World Bank, EBRD Budgets of the Units of local self-government, water management companies and water management communities, as well as the relevant ministries in the implementation of capital projects in rural areas in their competence. The financial planning of capital investment support at the level of complex land consolidation projects will be implemented through the Multi-annual Land Consolidation Financing Programmes as part of the Programmes for financial support to rural development based on which the financing will be covered by the AFSARD. The indicative participation of land consolidation programmes in the rural development resources will amount to 0.5 million € in 2013, 1 million in 2014, 2 million € annually each in the period 2015-2016, 4 million € in the period 2017-2019, 6 million € in the period 2019-2020. The financial planning for covering the land consolidation costs from the national program for rural development will be carried out with the parallel activities for introducing the land consolidation measures as part of the IPARD programme. The EU Regulation 1698/2005 gives the 49 possibilities for the measures Access to Forest and Agricultural Land, Land Consolidation and Water Management (Article 20 (b) (v) of the EU Regulation 1698/2005) to be included in the rural development programmes, under the priority “Improving and developing infrastructure related to the development and adaptation of agriculture and forestry” from Axis 1. The approval of this measure in line with the IPARD programme will secure finances for the majority of activities pertaining to land consolidation projects engaging the IPARD programme finances. The objective of the measure is to create rural and forest paths, to improve water management and territorial reorganization by means of integrated territorial planning and complex problem solving of farmers’ issues concerning fragmentation of land parcels, irrigation, access to parcels, anti-erosion activities, separation from urban areas and green corridors and protected areas, landscape protection and promotion. The support provided refers to preparation, organization and implementation of land consolidation projects. Introduction of the measure to the IPARD programme will be ongoing for a period of three years and is to be completed by transferring the management to the Macedonian institutions at the beginning of 2015. In the efforts to provide sustainable financing of the consolidation projects, the following steps will be undertaken: Budget planning and implementation of annual budgets, Drafting the process-related planning documents: strategic plans, Multi-annual Consolidation Programme, multi-annual and annual programmes about financial support to rural development and land consolidation measures, Accreditation of the land consolidation measure in the IPARD programme, Application and implementation of projects from IPA funds or other EU resources aimed at institutional strengthening. III.5 Raising the Awareness of Land Consolidation Land consolidation is often a complicated and sensitive process that involves many stakeholders, and for its successful implementation effective communication needs to be established and the essential land consolidation issues need to be properly understood. Because of the need to provide the support to the process and participation of farmers and all the others affected by this process, during the initial phase of the land consolidation policy implementation and at the beginning of every individual land consolidation project, special attention will be given to the land consolidation procedures, the influence of the project on the participants and the benefits in particular. Proper information decreases the negotiation difficulties, delay and high implementation costs when the land consolidation projects are implemented. The successful mediation has a very important role in the resolution of possible disputes during the initial inventory of ownership, borders and value of the parcels but also during the drafting of the detailed land consolidation plan which shops the reallocation of land parcels. In order to increase public awareness of the land consolidation process and encourage the interest of the rural population, the Land Consolidation Body, the MAFWE through the 33 regional branch offices and the ARDS who are in direct contact with the farmers and land users, the units of the local self-government and the very project teams will continuously organize promotional activities for raising the awareness of the target groups. The activities will involve direct communication during meetings with farmers, training, participation with promotional materials and presentation at agricultural fairs and public events in the rural areas, organization of land consolidation seminars as well as media coverage of the process. The farmers’ associations will also be included in the promotional activities. 50 Besides these activities intended for the target groups in the process, public campaigns will also be organized for creating a positive public opinion about the benefits and justification of the implementation of the land consolidation policy. With the purpose of familiarizing the farmers and the general public with the land consolidation, the following activities will be undertaken: Drafting a communication plan, Conducting regular national campaigns for raising the awareness of the general public and the specific stakeholders, Conducting a specific and targeted communication campaign and raising the awareness of all farmers and beneficiaries in the new project areas, Exchange of results and experience gained from the implemented land consolidation field activities (pilot activities and pilot projects). III.6 Other policies that contribute to improvement of agricultural structure Provision of market information concerning the land market One of the problems pertaining to the insufficient dynamics of the agricultural land market is lack of information regarding demand and supply of agricultural land and in particular lack of information regarding farmers’ interest in agricultural land exchange. The consolidation body shall sublime the information pertaining to land market and farmers’ interest as to the sites where they would like to have land exchange per region and shall publicly disclose and present it for the purpose of facilitating the search for potential buyers. Improving the access to credits for consolidation purposes Despite the improvement of banks’ general approach to rural crediting, granting credits remains problematic predominantly due to the fact that the majority of banks do not accept agricultural land as credit security. Hence, we shall consider the patterns of providing support on the part of the state for those entities and persons willing to expand their agricultural property by purchasing land, as follows: Provision of state securities for land mortgages that meet consolidation requirements, Provision of direct state credits at favourable interest rates for those entities and persons willing to consolidate land, Provision of credits to one of the heirs of inherited land willing to indemnify the other heirs so as to proceed with agricultural activities without diminishing the size of agricultural land. Such measures will be implemented with the support of the Macedonian Bank for Development Promotion where the Agricultural Credit Discount Fund is realized as one of the most efficient instruments aimed at rural crediting within the country. Decrease in land transfer related expenses and taxes Land transfers which aim at parcel consolidation and increase in agricultural holdings could gain in attractiveness and popularity provided that there was a decrease in expenses and provision of tax benefits. Granting tax concessions to farmers who consolidate and improve their lands as well as for farmers who sell lands for consolidation purposes are just some of the options for fiscal facilitation in favour of consolidation. 51 Furthermore, the options concerning long-term lease of land and facilitation of ownership transfer procedures will be considered, such as allowing purchase and sale of several parcels by a single person to be regarded as a consolidation transaction. The introduction of these measures will be in line with the results obtained from the analysis conducted by the competent Ministry of Finance and Ministry of Agriculture, Forestry and Water Economy. Inheritance of agricultural holdings by a single person In spite of the fact that the decrease in size of agricultural holdings and fragmentation of agricultural land are predominantly due to inheritance issues and are an ongoing process, the land consolidation effects which are a consequence of this process would be logical and justified if implemented in parallel with introduction of mitigation measures or halting the very reason concerning adverse effects on agricultural land. Introducing a limitation to the number of heirs is a common practice in EU countries, and its introduction to Macedonia will be the scope of a further analysis. The legal limitation will be defined as a pre-emptive right or another form of privilege granted to a single person that will cultivate the land in the future. Additionally, it will be supported by provision of favourable credits or other types of subsidies by virtue of the financial support programs for a single heir and in order to secure finances for indemnification of the other heirs. In addition to the afore-stated, the legal limitations stipulated in the Law on Agricultural Land that constrain physical division to holdings which are smaller than 2 hectares will additionally be modified and amended for further stipulation and definition of minimum parcel size following the physical division as well as for their more efficient implementation. Introduction of tax burdens on uncultivated agricultural land and abandoned land management In the direction of deployment of major resources of agricultural land which has not been cultivated (for more than three years), the local self-government units will be alerted to implement the covenants from the Law on Property Tax which stipulate property tax exemptions provided that this agricultural land has been cultivated. The technical and human resources of the Consolidation Body and the Ministry of Agriculture, Forestry and Water Economy will be at the disposal of the local self-government units for the purpose of identification of uncultivated privately owned agricultural land. Imposition of tax burdens and increase in the minimum stipulated tax will contribute to deployment of this significant resource. Those owners who wish to retain their lands and avoid taxes and who are not willing to cultivate them will be given the opportunity to offer them for management purposes to a Land Bank. The Land Bank will lease these lands for adequate compensation. Moreover, this Land Bank will also manage abandoned lands identified by the Bank which remain without a defined owner following the announced public call for ownership identification. In such cases, the bank will make long-term lease agreements. This lease will yield revue for the state, but a certain amount will be retained so as to cover incurred administrative expenses. Joint ownership and incomplete arondation procedures In the event of joint ownership of state-owned and privately owned land, the consolidation process will be used for the purpose of voluntary land exchange (i.e. the state will give the private land owner land at a different location). If voluntary exchange is not feasible then this plot of land will be divided between the state and the private land owner and redistributed by virtue of consolidation. 52 In the event of incomplete arondation, initiation of land consolidation will be avoided in arondation-prone areas. If the farmer may not legally claim ownership to previously exchanged land, then the consolidation project is to consider the option of granting plots of land to these users following reparcellation as leased state-owned land. 53 PART IV: IMPLEMENTATION OF AGRICULTURAL LAND CONSOLIDATION WITH AN OPERATIONAL PLAN OF ACTIVITIES IV.1 Consolidation procedure implementation phases Consolidation procedures will be implemented through a number of activities which may be divided into six phases. Namely, Project inception, Project design, Assessment of existing state in the consolidation area with an inventory of the existing state of parcels, boundary position, their legal status and identification of land value, Drafting a detailed consolidation plan with indicated layout of new parcels, Consolidation plan implementation, Final phase characterized by completion of project-related documents and acknowledgement of newly created state per parcel. Activities which are to be undertaken in the course of implementation of consolidation projects per phase are outlined hereunder. Consolidation project initiation Consolidation shall commence by showing interest for consolidation project initiation by certain interested stakeholders, which will be followed by an analysis of the initiative. Based on the analysis the initial concept is prepared, bearing draft project objectives, estimated costs and financing sources. Having been approved by the majority of stakeholders and the state, local steering units are to be established in order to represent farmers, other local entities and the steering Body itself. Consolidation projects may be initiated by several stakeholders, such as by the land consolidation Body, a group of farmers, professional associations, a local self-government Body with adopted decision by the council, water management enterprises harmonized with water management units, ministries competent for infrastructure and physical planning and for the environment. The extent of farmers’ process voluntarism or obligation will depend on the type of consolidation project and minimum stipulated criteria for each respective consolidation model will be prescribed in detail. Consolidation project design In the consolidation project design phase consultants will be selected, the consolidation area and project scope will be identified, expenses are estimated, and a sequence of activities is made, as well as a cost-benefit analysis and participation in cost recovery. The consolidation projects are selected pursuant to an analysis of requirements met. Namely, − Size (scope) of land fragmentation, − Identified interest on the part of the farmers concerning consolidation implementation and lack of serious opponents to the process, − Development priorities defined by both central and local government, − Endorsement of the consolidation process by the local authorities, − Availability of state-owned land or any land that will be used in order to increase arable land per property and land for infrastructural and public ventures, 54 − Agricultural area with a serious potential (presence of production factors) for agriculture development where the agricultural structure is a hindrance or a limiting factor, − Consolidation potential resulting in significant improvements (for example if the marketing of products is well regulated, then the benefit of increased production will be rapid and visible, access to motorways, etc.) − A relatively small number of absent landholders or an increased demand for land in conditions of disposable abandoned land, − Satisfactorily regulated property relations with relatively few disputes arising from land deeds, − Environmental hazards, − Plans by other ministries regarding construction of public facilities and infrastructure or environmental protection, and − Availability of necessary cadastral and other information. Upon the verification of meeting selection criteria requirements, an in-depth analysis of community requirements is to be made which is to indicate project benefits and the type of consolidation to be implemented (comprehensive, simple or voluntary). The analysis is to serve for identification of different categories of farmers and owners13, their interests and needs pertaining to modifications to land structure as well as for assessment of consolidation effects on all these different groups. The assessment of project benefits will be made on the basis of a rigorous project-related cost-benefit analysis. The positive outcome is to be used for convincing farmers and other relevant stakeholders regarding the project related necessities and benefits, whereas the negative outcome presupposed project redesigning or abandoning, and considering a new project. The analysis of the project potential benefits will contribute to identification of the specific nature of consolidation requirements (pertaining to agriculture, public facilities and infrastructure, environment, village revival, etc), the type of plots (agricultural, non-agricultural, construction, standing crops, forests) which are to be included in the process and the project scope as well. On the other hand, consolidation expenses which are contrary to benefits in view of feasibility assessment are expenses incurred for basic data collection, expenses for public facilities and infrastructure, village revival, environmental protection, land amelioration, landscaping, relocation, technical expenses, registration fees and ownership transfer fees as well as project implementation administrative expenses. Activities which are to be part of the consolidation project are conditioned by the local community priorities, by the natural-agricultural, economic, social and environmental characteristics as well by infrastructural circumstances. In the case of more complex projects, and in particular in cases of more complex land consolidation, the consolidation project scope is specifically conditioned by the assessment of the consolidation Body in view of landscaping intervention requirements in compliance with strategies and plans pertaining to agriculture and rural area development and by the preparedness and willingness of other relevant ministries to be involved in the project within the framework of their competences. Such projects are to ensure enhancement of agricultural situation, but also that the remaining non-agricultural components (infrastructure and facilities) which constitute a segment of this project coincide with its scope. 13 Self-subsistent farmers, farmers engaged in agriculture as a secondary activity, farmers who act on the market and with reference to the issue of ownership, owners who cultivate or lease their lands or who have abandoned their lands 55 Assessment of existing state in the consolidation area The assessment of the existing state in the consolidation area encompasses identification of parcel boundaries, ownership and user status, extent of protected areas, assessment of parcel value as well as introducing and implementing a complaints procedure. The consolidation area will be established in line with the administrative decision, rationality criteria, area in compliance with farmers’ requirements, but nevertheless in most cases in conformity with the approval granted by the Consolidation body. The selected consolidation site, i.e. consolidation area, is to offer sufficient land to be part of the consolidation process and state owned land which may be used for exchange purposes aiming at parcel increase and construction of facilities or infrastructure which are of public interest. The project boundaries are to secure as wide scope of estates as possible and likelihood of inclusion of minor new areas which may prove beneficial in the on-going process. As to the consolidation model initiated by farmers (primarily voluntary consolidation), the selection of consolidation area shall further affect the determination of consolidation activities (such as enhancement of agricultural structure, environmental protection, public goods, village revival, etc.). Assessment of land value is of paramount importance so as to secure that land relocation will be executed properly and whether any compensation is necessary. Adequate methodology for calculation of land value is to be defined and it is to be based on market value and on aspects affecting production, such as soil quality, irrigation systems and topography. Furthermore, natural fertility potential and existing productivity are to be taken into consideration. In the event of poorly developed land market that does not secure information pertaining to land value, relative assessment values, such as grading, will be applied. In view of this activity, significant factors are the selection of people who are to perform land assessment (starting with professional appraisers, committee of farmers or their combination) defined pursuant to their respective qualifications, selection procedure and procedure stipulated for management of assessment related complaints. Drawing up a detailed consolidation plan The drawing up of a detailed plan commences with drawing up of a draft plan with an overview of the new state concerning the relocated land parcels, the location of new paths and other public facilities and other improvements which are a constituent part of the project, as well as identification of activities which are to be eliminated. Persons in charge of drawing up the plan may be experts from the consolidation body or from the private sector (surveyors, agronomists, experts on physical planning and land consolidation). The relation and communication of these people with the project team and project manager, as well as the process of farmers’ involvement and involvement of any other stakeholders in drawing up the detailed plan will be clearly defined and outlined. By virtue of an interactive procedure, several alternatives to the projects will be presented pertaining to costs and benefits and assessment of environmental effects. Having considered participants’ options and comments, a final version of the detailed consolidation plan is drafted and is subject to further remarks and approvals. The final version of the plan is the version approved and adopted by the competent Body, i.e. consolidation Body following a certain pattern of previous plan approval by the stakeholders. Additionally, project stakeholders may file complaints to the consolidation Body as a competent Body, and subsequently to the state institution that conducts supervision over the consolidation or to a competent court. 56 Implementation of detailed consolidation plan Having selected contractors, public activities such as land amelioration, levelling, drainage, construction of new roads and bridges, etc. are performed followed by cadastral presentation of the new state in terms of the newly created parcel boundaries. Consolidation final phase The consolidation final phase comprises of calculation and sharing of costs, final updating of the cadastral map as well as issuance and registration of title deeds with reference to these new parcels. IV.2 Programming and Implementation Dynamics of the Land Consolidation Policy in the Republic of Macedonia In accordance with the dynamics of introducing and implementation of the land consolidation policy instruments in the Republic of Macedonia, the foreseen planning period covered by the strategy is divided into three main phases: preparation phase, which covers the period from the beginning of 2012 until the first half of 2013, then the second phase until the middle of the planning period, i.e. 2016 and the last, third phase until 2020. The land consolidation planning and implementation activities that will be undertaken in the main intervention areas are presented per phase further in the text. Land Consolidation Preparation Phase, from 2012 until the middle of 2013 The preparation phase foresees implementation of activities that should provide all the necessary conditions for introducing and implementing the agricultural land consolidation policy and other policies and measures that influence the processes of structural improvement of the agricultural land. The preparation phase will be implemented during 2012 and by the middle of 2013 and it covers the establishment of the basic organizational structure and the necessary legal basis. Achieving the specific policy objectives for agricultural land consolidation in the preparation phase will be enabled by setting and implementing conditions, policy instruments and activities in the following areas: Land consolidation policy instruments Although land fragmentation is present throughout the whole country, the regions with intense agricultural production where farmers show greater interest will be selected as the initial areas for land consolidation. The regions that are in need of or have foreseen implementation of infrastructural activities such as construction or reconstruction of irrigation networks will be first considered when choosing the first projects that contain landscaping elements. At the very beginning, during the inception of the process and the selection of projects it is important to conduct proper risk assessment analysis in order to reduce the potential implementation risks and find new ways to reduce the frequency of their occurrence. Once the project has started, good project management or the skills acquired by staff are of vital importance to risk prevention. As for the selection of the land consolidation model, the voluntary land exchange that took place in the Municipality of Konče will be promoted and two more prospective regions need to be identified so that the voluntary land consolidation processes will start there. The initial projects will focus on including farmers on voluntary basis as a simpler form when compared to the models that 57 require legally regulated land consolidation. The voluntary land exchange is planned to increase in number from 10 cases in 2012 to 30 cases in 2013 etc. Regarding the experience required, at least one of the planned projects should be a voluntary and consolidation project with elements of smaller infrastructural investments (in the melioration or road infrastructure) and their implementation will take place in 2013. By the end of 2012 an analysis will be conducted regarding the existing consolidation areas in the country in smaller rounded areas in accordance with the needs and plans of the water management companies for capital investments in expansion or rehabilitation of the secondary irrigation network. At the beginning of the strategy implementation, smaller-sized projects will be implemented with a smaller area covered (up to 100ha, or several hundreds) and a smaller number off participants (not more than 100). The project should not last too long, especially not at the beginning, so that the project activities would not have a negative influence on the community and also to enable higher promotion and popularity of land consolidation. The length of time depends on the scope and complexity of the project, but for most of the local communities, on average, half a year for the voluntary land exchange and between one and a half to three years for the smaller complex land consolidation projects are acceptable periods. Legal basis for land consolidation implementation During 2012 the legal basis for land consolidation in the Republic of Macedonia will be established, which means that the Law on Agricultural Land Consolidation will be passed. The law will provide the basis for establishing the necessary institutional capacity – the national Land Consolidation Body, and it will regulate the implementation of all the land consolidation instruments planned. In parallel with the adoption of the law it will be necessary to introduce adjustments to the other legal acts to which certain amendments will have to be made. During this phase the adoption of the necessary bylaws of the Law on Land Consolidation will also start so that the legal provisions of this law could be implemented. Institutional strengthening During the preparation phase, the activities presented in the national Land Consolidation Strategy will be implemented by the Sector for registration and management of agricultural land within the MAFWE, i.e. the Agricultural Land Exchange Department. The Department will implement the voluntary land exchange and the pilot projects involving more complex land consolidation and it will coordinate the activities that will be implemented by the branch offices and the municipalities involved at the local level. By the end of 2012 the total number of staff members in the department should be five, mostly by transfer of other MAFWE staff. The land Consolidation Body will start operating at the beginning of 2013 with the adoption of the new budget of the Land Consolidation Directorate. Land consolidation financing The financing of the activities in 2012 will be provided from the current MAFWE budget, whereas the 2013 activities will be financed from a special budget of the Land Consolidation Directorate. The documents required for programming of the existing instruments financed by the EU will be drafted in the course of 2012. In 2012 and 2013 efforts will be made to provide bilateral technical, financial and other kind of support for the activities for institutional strengthening of the Land Consolidation Body by the FAO and the short-term support provided by the EU (TAIEX) etc. 58 Awareness raising and improvement of skills During the planned period the voluntary land exchange that took place in the Municipality of Konče will be promoted, as well as other activities of the Agricultural Land Exchange Department in cooperation with the local entities, the Association of the units of Local Self-government (ZELS) and the farmers’ associations for wider promotion of the land consolidation process among the farmers. The activities will be organized as direct meetings with the farmers and presentations of previous initial activities in regions with the greatest interest and need for land consolidation. Other policies contributing to land structure improvement In the course of 2012 harmonization with the relevant line ministries will be made for research comparison and gathering opinion on introducing amendments to the laws and policies for improved land structure and land use. Land Consolidation Phase Two - from the middle of 2013 until 2016 During the second phase of the planning period covered in the strategy from 2013 to 2016 all legal and institutional conditions for land consolidation will be completed with increased dynamics and complexity of the land consolidation projects. Land consolidation policy instruments During the second phase of land consolidation the voluntary land consolidation projects that started in 2012 will now be completed, but also small and medium projects of simple land exchange will be implemented for improvement of the land use structure. In this phase, the piloting of several more complex instruments of small-sized complex land consolidation will start and awareness will be raised with farmers about the need and the benefits of land consolidation yielded in the previous projects. The voluntary land exchange and land consolidation programme will go faster in terms of the started projects. The voluntary land consolidation projects are expected to start in 2013 and continue after the completion of the legal framework and the instruments. The number of projects will increase from 2 to 6 in 2016. In the second half of 2013 the Land bank will start operating thus enabling the implementation of a more active policy regarding the abandoned land and land exchange. The legally supported i.e. comprehensive land consolidation projects will start in 2014 and their number will increase from 1 to 5 in 2017 and onwards. Legal basis for land consolidation implementation By the end of 2013 all the bylaws related to the Law on Land Consolidation will be completed, as well as legal adjustments and amendments to the law by the end of the phase. During this phase, adjustments and amendments will be made to other laws that influence land structure, if deemed necessary. Institutional strengthening 59 During the second phase, as the scope of work of the Land Consolidation Directorate increases, so will its organizational structure increase in terms of staff. The Sector for registration and management of agricultural land within the Land Consolidation Directorate will be fully functional and complete and the main human and organizational capacities of the Land Bank will be established so that its activities will also start. The operation of the Land Bank will start by its participation in land exchange and abandoned land management in the second half of 2013. Until the beginning of 2015 it is expected that the Sector for registration and management of agricultural land will have nine staff members with specific tasks as land consolidation project team leaders and members, and additional six employees in the Land Bank. During this phase, employees from the branch offices of the MAFWE will be selected and fully involved in the land consolidation activities, most of all regarding the initiation and support to the voluntary land consolidation implementation. The units of the local self-government will be included in the activities at the local level. Land consolidation financing In addition to the Directorate budget, the activities for institutional strengthening will also be financed from the implementation of TAIEX and Twinning activities, and in 2014 also through the first IPA component. Awareness raising and improvement of skills In addition to the regular implementation of the activities from the communication plan for the individual land consolidation projects, a National campaign for land consolidation promotion will be organized in the second half of 2013 and once again in 2014. Other policies contributing to land structure improvement The harmonization of the legal framework regarding the fiscal policy and the inheritance rights which was made in the past period will now be implemented as part of the second phase. In 2016, in the middle of the land consolidation implementation, the results from the first implementation period will be evaluated. During the evaluation it will be necessary to reconsider the land consolidation models for the forthcoming period, especially the implementation of the legally-binding land consolidation, the land mobility that has been achieved and the effectiveness of the existing institutional setup. Land Consolidation Phase Three - from 2016 to 2020 Following the evaluation conducted in 2016, the parallel implementation of all available land consolidation models will continue until 2020, in accordance with the analyses on the adequacy of application of the appropriate models. During the third and final phase, in addition to the regular voluntary land consolidation procedures, several more complex integrated projects will be included for land consolidation of larger areas in the country by including serious infrastructural investments combined with the Land Bank. This phase is aimed at active implementation of complex land consolidation projects that will be conducted in seven areas. Including forest land as part of the land consolidation procedures when the forest land is part of the territory that is being consolidated or is part of a separate land consolidation project is planned to start in the second period covered by this strategy, i.e. following the evaluation for the 60 strategy implementation in 2016, based on the experiences of the implemented projects involving agricultural land, the strengthened institutional land consolidation capacities and the established information systems in forestry. IV.3 Land Consolidation Indicative Implementation Plan 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total finished Tool 1 Land Exchange Cases* Started in 2012 10 10 Started in 2013 30 30 Started in 2014 50 50 Started in 2015 100 100 Started in 2016 150 150 Started in 2017 300 300 Started in 2018 400 400 Started in 2019 500 500 Started in 2020 700 700 Total On-going/year Tool 1 10 30 50 100 150 300 400 500 700 Finished 2240 Tool 2 Voluntary Land Consolidation Projects** Started in 2012 1 1 1 1 Started in 2013 2 2 2 2 Started in 2014 2 2 2 2 Started in 2015 3 3 3 3 Started in 2016 3 3 3 3 Started in 2017 3 3 3 3 Started in 2018 4 4 4 4 Started in 2019 4 4 On-going 4 Started in 2020 5 On-going 9 Total On-going/year Tool 2 1 3 5 7 8 9 10 11 13 Finished 18 On-going 9 Tool 3 Legal Land Consolidation Projects *** Started in 2014 1 1 1 1 1 Started in 2015 2 2 2 2 2 2 Started in 2016 3 3 3 3 3 3 Started in 2018 3 3 3 On-going 3 Started in 2020 2 On-going 5 Total On-going/year Tool 3 1 3 6 6 8 8 8 Finished 6 On-going 8 * average duration = 1 year (preparation + implementation), cases are the simple exchange of parcels ** average duration = 3 years (preparation + implementation) *** average duration = 5 years (preparation + implementation) 61 PART V: OPERATIONAL PLAN OF LAND CONSOLIDATION ACTIVITIES FOR THE PERIOD 2012-2020 Intervention areas / Activity Implementation year Result Competent authority Извори на финансирање 2012 2013 2014 2015 2016 2017 2018 2019 2020 Land consolidation implementation Implementation of voluntary land exchange projects In accordance with IV.3 LCB MAFWE-LCB Budget Preparation of the LCB for implementation of voluntary land consolidation projects. (minimum criteria, methodology, procedures) Completed organizational preparations– procedures, capacity LCB MAFWE-LCB Budget Implementation of voluntary land consolidation projects In accordance with IV.3 LCB AFSARD, IPARD Budget Preparation of the LCB for implementation of compulsory land consolidation projects. (minimum criteria, methodology, procedures) Completed organizational preparations– procedures, capacity LCB MAFWE-LCB Budget Implementation of compulsory land consolidation projects In accordance with IV.3 LCB AFSARD, IPARD Budget Abandoned agricultural land management Land Bank includes abandoned land in projects LCB MAFWE-LCB Budget Simplification and speeding up of the procedures for state-owned agricultural land exchange (with private land and between state owned land) Amended Law on Land Consolidation and bylaws MAFWE, Land Management Sector MAFWE Budget Adjustments to the procedures for leasing state-owned land in order to consolidate the land parcels Amended Law on Agricultural Land and bylaws MAFWE, Land Management Sector MAFWE Budget Stipulating rural development measures for full coverage of the costs for voluntary land consolidation Measures introduced to the Rural Development Programme and Decree MAFWE, Rural Development Sector MAFWE Budget Evaluation of the land consolidation implementation Updated land consolidation strategy and legal amendments MAFWE;LCB MAFWE-LCB Budget Legal basis Drafting of the Land Consolidation Law Adopted Land Consolidation Law MAFWE;LCB MAFWE-LCB Budget Drafting other legal amendments for establishing the Land Consolidation Directorate as part of the MAFWE Amendments to the Law on state governing bodies and the MAFWE systematization MAFWE and the Government of R.M. MAFWE Budget 62 Drafting of bylaws pertaining to the Land Consolidation Law Adopted bylaws to the Law on Land Consolidation MAFWE; LCB MAFWE-LCB Budget Institutional capacity Providing staff for the Agricultural Land Exchange Department 5 people employed in the department (internal transfer to MAFWE) MAFWE MAFWE Budget Drafting the planning documents for the establishment of the LCB Designed LCB budget for 2013, strategic plan and systematization. MAFWE MAFWE Budget Establishment of the LCB LCB is functional with an appointed director and organizational Bodys MAFWE MAFWE Budget Procurement of equipment, IT hardware and software, transport vehicles Equipment and vehicles procured LCB 2013 MAFWE Budget & 2014 IPA Beginning of the operation of the Land Bank Land Bank manages land fund, exchanges land and performs other operations LCB MAFWE-LCB Budget Training needs assessment for the LCB staff Training needs assessment conducted for the LCB staff LCB outsourcing MAFWE-LCB Budget Drafting the staff’s training and professional development plan Staff training and personal development plan drafted LCB outsourcing MAFWE-LCB Budget Human resources management and learning by acquiring practical knowledge and experience in project implementation Plans and ongoing implementation of initial and further training of staff LCB MAFWE-LCB Budget Drafting a multi-annual land consolidation programme Multi-annual Land Consolidation Programme adopted by the Government of R.M. LCB MAFWE-LCB Budget Implementation of the IPA land consolidation project IPA activities implemented according to the project’s ToR LCB and consultants IPA TAIB and MAFWE-LCB Budget Procedure for introducing the measure for land consolidation in the IPARD programme Land consolidation measure included in IPARD MAFWE IPARD ТУ MAFWE Budget Accreditation of the operational IPARD structures for implementation of the land consolidation measure Operational IPARD structures accredited IPARD and AFSARD ТУ MAFWE Budget, AFSARD Budget 63 LCB – Land Consolidation Body Applying for Twinning and ТАIEX projects and use of technical support Applications submitted and implementation of Twinning, ТАIEX and a second IPA project MAFWE; LCB IPA EU Drafting the budget and strategic planning of the LCB Budgets and strategic plans of the LCB prepared LCB MAFWE-LCB Budget Providing financial support from other bilateral donors (FAO, World Bank, EBRD) Applications submitted and technical assistance projects implemented LCB Donors Awareness raising and improvement of skills Implementing the campaign for the promotion of the results from the Municipality of Konce Land consolidation promoted at the local level in 4 regions and through associations MAFWE-Land Exchange Department MAFWE Budget Drafting a communication plan Communication plan prepared LCB MAFWE-LCB Budget Implementation of the communication plan (regular targeted and national campaigns) Ongoing implementation of regular targeted and national campaigns LCB MAFWE-LCB Budget Other policies that indirectly affect land consolidation Study on the land market operation Study on the market operation completed MAFWE MAFWE Budget Development of the measure for early retirement of farmers and implementation through the annual rural development programmes The measure for early retirement of farmers is implemented through the annual rural development programmes IPARD and AFSARD ТУ MAFWE Budget, AFSARD Budget Analysis of the possible facilitation of the individual land consolidation by adjustments to the land, fiscal and other kinds of policies Conducted analysis of the adjustments to the land, fiscal and other kinds of policies Ministry of Finance, MAFWE Ministry budgets Amendments to laws and regulations for improved individual land consolidation Necessary amendments to laws and bylaws completed Ministry of Finance, MAFWE Ministry budgets Establishing and operation of the information system for agricultural land market Established information system for the agricultural land market LCB MAFWE-LCB Budget, Donors 64 Annex 1 Existing Institutional and Legal Acts on the Land Property and Land Use Current laws related to property rights: • Law on expropriation (Official Gazette of the Republic of Macedonia, No. 33/95; 20/98; 40/99; 31/03; 46/05; 10/08; 106/08; 156/10, 6/12) • Law on denationalization (Official Gazette of the Republic of Macedonia, No.20/98; 31/00; 43/00-пречистен текст;42/03; 44/07; 14/09; 20/09;72/10,171/10) • Law on agricultural land (Official Gazette of the Republic of Macedonia, No.135/07,17/08 исправка,18/11,42/11-исправка,148/11) • Law on Spatial and Urban Planning (Official Gazette of the Republic of Macedonia, No. 60/11) • Law on Property Taxes (2004 RM) (Official Gazette of the Republic of Macedonia, No. 61/04,92/07,102/08,35/11,53/11) • Law on Real Estate Cadastre (Official Gazette of the Republic of Macedonia, No. 40/08; 158/10,17/11-исправка,51/11) • Law on Survey and Land Cadastre (Official Gazette of the Republic of Macedonia, No. 34/72) • Law on agriculture and rural development (Official Gazette of the Republic of Macedonia, No. 49/10,53/11) • Law on Forests (Official Gazette of the Republic of Macedonia, No. 64/09,24/11,53/11) • Law on Pastures (Official Gazette of the Republic of Macedonia, No. 3/98;101/00;89/08;105/09;42/10; 116/10) • Law on Ownership and Other Real Rights (Official Gazette of the Republic of Macedonia, No. 18/01;92/08;139/09;35/10) • Law on Construction Land (Official Gazette of the Republic of Macedonia, No. 17/11,53/11) • Spatial plan of Republic of Macedonia (Official Gazette of the Republic of Macedonia, No. 39/04) • Law on Obligations (Official Gazette of the Republic of Macedonia, No. 18/01;78/01,4/02;59/02,5/03;84/08;81/09;161/09) Bylaws related to property rights: • Rules on the form and content of the application form for the exchange of agricultural land and the necessary documentation (Official Gazette of the Republic of Macedonia, No.12 / 08,93/11) • Decree on the criteria for the definition of rural areas (Official Gazette of the Republic of Macedonia, No.137 / 08) • List of rural areas in the Republic of Macedonia (Official Gazette of the Republic of Macedonia, No.89 / 11) • Rulebook on recovery, marking and changing the boundaries of cadastral municipality of land that is subject to survey (Official Gazette of the Republic of Macedonia, No.118/08) • Rules for the maintenance of the Real Estate Cadastre (Official Gazette of the Republic of Macedonia, No.27/11,81/11) • Rules on how to use, distribute, access, publish, store and protect data from geodetic cadastral information system and the manner of publication of data from the Real Estate Cadastre (Official Gazette of the Republic of Macedonia, No. 27/11) • Regulation on the establishment of the Real Estate Cadastre (Official Gazette of the Republic of Macedonia, No.118/08, 143/08, 119/09, 48/2010,71/2010 и 149/2010) • Rulebook on the rules for cadastral land classification (Official Gazette of the Republic of Macedonia, No. 38/78) • Rulebook on Cadastral land classification (Official. Gazette no. 38/78) • Rulebook on the rules for bonity classification of land and distribution in solvent classes and subclasses (Official Gazette of the Republic of Macedonia, No.29/87, 33/91) • Rules for the maintenance of survey and land cadastre (Official Gazette of the Republic of Macedonia, No.6/75, 9 / 75-исправка, 60/06-исправка) 65 Annex 2 Overview of land structure in other European countries Country Agricultural land in million ha Average size of the agricultural holding in ha Average size of parcel in ha Information source Bulgaria 6.2 2 0.4- 0.5 Land fragmentation and Its Impact in Central and Eastern European Countries and the Commonwealth of Independent States, Fritz Rembold, FAO, 2003 Romania 14.8 2.3 0.3 Land fragmentation and Its Impact in Central and Eastern European Countries and the Commonwealth of Independent States, Fritz Rembold, FAO, 2003 Albania 0.578 1.17 0.2-0.25 Land Fragmentation and Consolidation in Albania, Fatbardh Sallaku, Agricultural University of Tirana, Albania, 2011, or, Albania Country Brief: Property Rights And Land MarketsRachel Sabates-Wheeler, Land Tenure Centre, 2003 Serbia 5.1 2.5 0.6 Serbia National Report, Arkotras Consortium, 2006 Greece 16.9 4,8 Eurostat, EY, 2008 Spain 23.9 25.4 Eurostat, EY, 2008 Italy 15.3 6 Agricultural Policy in Europe, Alan J. Greer, University of Manchester, 2005 Greece 3.9 4 Agricultural Policy in Europe, Alan J. Greer, University of Manchester, 2005 EU 25 130.8 19 1.8 – 4 Agricultural Policy in Europe, Alan J. Greer, University of Manchester, 2005 Portugal 3.8 9 Agricultural Policy in Europe, Alan J. Greer, University of Manchester, 2005 Slovenia 0.95 6.3 1.4 Land Consolidation in Slovenia, Ministry of Agriculture, FAO, 2007 Turkey 6 1 General Directorate of State Hydraulic Works, Turkey