The legal framework for agricultural land is regulated by a specific legislation – the Law on Agricultural Land, which comprehensively governs the procedure for leasing agricultural land owned by the state or communal entities.
Article 64. of the Law on Agricultural Land prescribes that agricultural land owned by the state is leased through public advertising and public bidding, with two rounds, except in cases of preemption rights and preferential lease rights, which have their own specific conditions.
Article 64a of the Law on Agricultural Land provides regulations on how the right of preferential lease for agricultural land owned by the state is realized.
In order to facilitate the understanding of the leasing process for agricultural land owned by the state through the right of preferential lease, we will briefly outline the specific features of this procedure, as well as the conditions that interested parties need to fulfill in order to exercise the right of preferential lease for agricultural land owned by the state.
The decision to lease agricultural land owned by the state based on the right of preferential lease is made by the competent authority of the local self-government unit with the approval of the Ministry responsible for agricultural affairs.
Based on the aforementioned decision to lease agricultural land owned by the state, and upon payment of the lease fee for the right of preferential lease and the provision of security for long-term agreements, the Ministry responsible for agricultural affairs and the lessee conclude a lease agreement for agricultural land owned by the state. The right of preferential lease for agricultural land owned by the state is exercised through a procedure conducted by the local self-government unit, which initiates a public call. The public call is announced by June 30th of the current year, and applications with the necessary documentation must be submitted to the local self-government unit no later than October 31st of the current year.
The right of preferential lease for agricultural land owned by the state is granted to legal and natural persons who meet the following criteria:
- The person must be the owner of a system for irrigation, drainage, fish ponds, agricultural facilities, greenhouses, and perennial plantations (fruit orchards and vineyards in production) located on agricultural land owned by the state. Additionally, the person must be registered in the Register of Agricultural Holdings and have an active status for at least 3 years.
- The person must be the owner of livestock and be the owner or lessee of facilities for breeding those animals within the territory of the local self-government unit where the right of preferential lease is exercised. Furthermore, the person must be registered in the Register of Agricultural Holdings and have an active status for at least one year.
According to Article 64a of the Law on Agricultural Land, the determination of the lease price for agricultural land owned by the state based on the right of preferential lease varies depending on whether the applicant is a legal person representing the owner of the system for irrigation, drainage, fish ponds, agricultural facilities, greenhouses, and perennial plantations (fruit orchards and vineyards in production) located on agricultural land owned by the state, registered in the Register of Agricultural Holdings with an active status for at least 3 years, or the applicant is the owner of livestock, owning or leasing facilities for breeding those animals within the territory of the local self-government unit where the right of preferential lease is exercised, registered in the Register of Agricultural Holdings with an active status for at least one year.
In the first case, the lease price for agricultural land owned by the state based on the right of preferential lease is the average achieved price per hectare. In the second case, the lease price for agricultural land owned by the state based on the right of preferential lease is the average achieved price per hectare, with the condition that the lease price based on this right cannot exceed the average lease price per hectare in the territory of the Republic of Serbia over the past 3 years. The average achieved price per hectare is the average price achieved at the most recent public auction for agricultural land owned by the state leased within the territory of the local self-government unit. If there was no public auction in the previous year in the local self-government unit, the average achieved price for agricultural land owned by the state in all neighboring local self-government units is taken into account.
However, the specific conditions, procedures, and documentation required for exercising the right of preferential lease are further regulated by the provisions of the Regulation on the Conditions and Procedure for Leasing and Using Agricultural Land Owned by the State. By Article 3 of the mentioned Regulation, general conditions for leasing agricultural land based on the right of preferential lease are specified. These conditions include the requirement that an annual program for the protection, arrangement, and use of agricultural land is adopted by the competent authority of the local self-government unit (by March 31 of the current year) with the approval of the Ministry responsible for agriculture. Additionally, there are specific conditions mentioned in the previous part of this report.
Considering all the aforementioned, it follows that in order to exercise the right of preferential lease for agricultural land owned by the state, it is necessary to cumulatively fulfill the general and specific conditions mentioned. This includes having the appropriate registration in the register of agricultural holdings, for the required time period (at least 3 years), and meeting the conditions regarding the predominant activity of the entity seeking to exercise the right of preferential lease for agricultural land owned by the state.
