INVEST IN BULGARIAN AGRICULTURE 2012

All over the world agricultural land is seen as a hedge against inflation, unstable capital markets and growing economic uncertainty. As in other parts of the world, the agricultural sector in Bulgaria has seen much investments over the last couple of years, as both yields and commodity prices follow an upward trend. World Bank report shows that a 40% rise in population leads to 70% rise in demand for agricultural produce. Bulgarian agricultural exports grew in value by over 34% in 2010. The largest share was taken by cereal production.

Agriculture makes up close to 5% of Bulgaria’s GDP. Land in Bulgaria is most commonly measured by the unit decare (daa), as 10 daa = 1 hectare.

Total agricultural land in Bulgaria: 56 million daa (5 600 000 hectares)

Land distribution by type in Bulgaria (million daa) is as follows:

By the latest figures of the Bulgarian Association of the Owners of Agricultural Land:

-    Some 170 000 transactions of agricultural land have happened in Bulgaria in 2011.

-    Over 150 000 hectares have changed hands in 2011.

-    The prices of agricultural land rose between 17%-20% for 2011, but that rise is expected to level out to 10% thereafter in the next few years.

-    Rent yields are expected at 10% - 12%.

-    Some 350 000 hectares of arable land are still not cultivated, as they belong to the State or to individual owners not interested in agriculture.

-    For 2011, wheat harvest for Bulgaria is some 4 million tonnes, sold at average prices of 164 EUR/tonne. Wheat yields rise to 460 kg/daa and the total area allocated for wheat production is some 1 050 000 hectares.

1. Subsidies

The subsidies for 2012 are as follows: 22.40 BGN from the EU and 3 BGN from the Bulgarian budget, for a total of 25.40 BGN/per daa (130
EUR/hectare). At the beginning of 2014, the subsidy system will likely change to involve a floating payment schedule, which is set to favor agricultural holdings whose size is between 50 – 300 hectares. Most of the subsidies are taken up by the agricultural cereal producers, since subsidies
are distributed per hectare of planted land. Cereal production takes up to 56.25% of cultivated land.

2. Land under cultivation

The total land under cultivation is 3 200 000 million hectares, of which 1 800 000 million hectares, or 56.25%, are taken up by cereal production

3. Traded volumes

Year     Land traded (by/hectares)
2008    100 000
2009    90 000
2010    114 300
2011    150 000

The total number of deals for 2011 comes to some 170 000. An increasing consolidation of agricultural holdings is happening in the last two years (2010 and 2011).

4. Prices

Prices differ according to the size of the plot, the quality of the land, concentration of ownerships, local labor force, available agricultural producers in
the area and related infrastructure.

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