Average prices of the agricultural land transactions

National Statistical Institute

Agricultural and Forestry Accounts and Prices Department

Zornitsa Ivanova

Teodora Ralinska

Head of Department

Junior Expert

2, P.Volov Str., 1527 Sofia, Bulgaria

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The National Statistical Institute of Bulgaria has provided Eurostat with annual data on the prices of agricultural land transactions and rent payment in agriculture since 2000. The grant in 2011 aimed at the development of comparable statistical data according to the Target Methodology and envisaged to set up the improved national data collection system and to ensure data quality by introducing new tools for data collection and data checks in order to meet users' needs and access to the data. The three years period for observation (2010, 2011 and 2012) has been selected, moreover the 2012 information was collected on the quarterly bases. After the completion of the project, the NSI continued to develop this statistical information and providing data to Eurostat on a regular basis.

Within the survey data for the next variables are collected:

• Number of transactions;

• Total land area sold by the observed unit in the reference period;

• Sale price per unit of area.

For data compilation next classifications are used:

• Classification of Territorial units for Statistics in Bulgaria (NUTS)

• Classification of observed Land use categories

• Classification of Economic Activities in Bulgaria (NACE 2008, Rev. 2)

• National Register of Populated places in Bulgaria

Data on the sale price of agricultural land are collected from three main groups of respondents operating on the agricultural land market:

• Agricultural holdings, buying agricultural land for development of their economic activity (NACE 2008, code 01)

• Land transactions companies established according to the National legislation specially to carry out operations (purchase, sale and rental) of agricultural land (NACE 2008, code 6810 and 6820)

• Real estate agencies (limited number)buying and selling agricultural land (NACE 2008, code 6831)

Only those agricultural land transactions where its purpose for agricultural production is not changed are taken into account.

1. Definition of the price of agricultural land According to the market price concept, the price of agricultural land (arable land, permanent grassland) is the price received/paid by the holder in free trade without deduction of taxes or levies and without the inclusion of subsidies. In practice, this means the actual price agreed upon by the transactors. Any taxes that the seller may have to subsequently pay as a result of selling the land, such as capital gains tax, would not be deducted from the price. The selling/purchase price of land should thus exclude:

• costs of transferring ownership (therefore lawyer's fees, registration taxes and real estate tax are not included in the land price);

• deductible VAT;

• the entitlements related to the land;

• the value of any monetary compensation received by farmers for the sale/acquisition of the Utilized Agricultural Area (UAA);

• the value of any building on the sold/purchased agricultural land;

• inheritance transfers.

Within the survey data on absolute prices of the agricultural land transactions is collected. There is no need respondents to calculate average prices in cases of several transactions made. In this case they fill-in the most frequently contracted price when they buy/sale agricultural land within the area of corresponding populated place.

2. Observed land use categories

• Arable land - land worked (ploughed or tilled) regularly, generally under a system of crop rotation (as defined for the latest Farm Structure Survey).

• irrigable arable land – arable land area which could, if necessary, be irrigated in the reference year using the equipment and the quantity of water normally accessible

• non-irrigable arable land - arable land area which cannot be irrigated due to the lack of access to water for irrigation

• Permanent grassland - land used permanently (for five years or more) to grow herbaceous forage crops, through cultivation (sown) or naturally (self-seeded) and which is not included in crop rotation

According to the data from the Agricultural Farm Structure Surveys the irrigable land represented non-significant value of the total UAA in Bulgaria and thus in compliance with the Common Methodology the breakdown of the average price of land transactions by two subcategories of arable land (the irrigable and non-irrigable) was not carried out.

1. Reporting units:

Data on the sale price of agricultural land are collected from three main groups of respondents operating on the agricultural land market:

• Agricultural holdings,buying agricultural land for development of their economic activity (NACE code 01)

• Land transactions companies established according to the National legislation specially to carry out operations (purchase, sale and rental) of agricultural land (NACE code 6810 and 6820)

• Real estate agencies (limited number) buying and selling agricultural land (NACE code 6831). Only those agricultural land transactions where its purpose for agricultural production is not changed are taken into account.

2. Observation unit

The observation unit is the price of 1 decar of agricultural land purchased/sold.

• The statistical population for the agricultural holdings and real estate agencies is defined on the base of information for the acquisition of fixed assets (land is presented as a separate item), reported by them in the Annual Activity Report of Non-financial Enterprises.

• For the Land transactions companies the statistical population is defined on the base of information on reported value of changes in the fixed assets during the calendar year in the Annual Report of Consolidated Annual Activity Report of Specialized Investment Firms.

All units above a certain value threshold are included in the monitoring.

The survey includes all units that meet the defined value threshold, as a result of which some of the districts (at NUTS 3 territorial level) remain outside its scope.

The data from 2010 onwards meet the requirements of the Eurostat Common Methodology.

Not applicable.

BGN per 1 decar sold agricultural land

In order to meet the requirements of the Eurostat Common Methodology, prices are then recalculated in BGN per hectare.

Calendar year.

1. Common EU Methodology on Agricultural Land prices and rents;

2. ESS-net agreement between Eurostat and members states;

3. National Law on Statistics;

4. National Statistical Programme.

Data from the survey are included in Agreements for data exchange and strategic partnership between the National Statistical Institute and other bodies.

Data to Eurostat are supplied according to ESS-net agreement.

• Law on Statistics: https://www.nsi.bg/en/node/218/;

• Regulation (EC) 223/2009 on European statistics (recital 24 and Article 20 (4)) of 11 March 2009 (OJ L 87, p 164) foresee that for that purpose it is necessary to establish common principles and guidelines, ensuring data confidentiality of data used for production of European Statistics and access to those confidential data with account for technical developments and requirements of users in democratic society.

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:087:0164:0173:EN:PDF

Individual data shall not be published, observing art. 25 of the Law on Statistics. The dissemination of individual data is made only under Art. 26 of the Law on Statistics.

Problems with the confidentiality of data arise at lower geographic levels and for smaller categories of land, where in some cases there are separate transactions or renting of agricultural land. In this case, the data is aggregated at the higher geographic level.

The schedule for dissemination of statistical information from the survey on agricultural land prices and rents is published in the Release Calendar presenting the results of the statistical surveys carried out by the NSI.

The calendar is available on the NSI website: https://www.nsi.bg/en/node/480

Data are published in compliance with the Chapter 5 of the Law on Statistics and European Statistics Code of Practice, considering professional independence and with aim of impartiality and transparency, where all users are treated equal.

Annual.

The press releases are published regularly on the NSI website in the year following the reference period in Bulgarian and English, together with the dissemination of the data.

The press release can be accessed at https://www.nsi.bg/en/node/11616/?qt-statistical_domain_en=4

The data are published regularly on the NSI website in the year following the observation period in Bulgarian and English in the domain Statistical data/Agriculture and Forestry/Agriculture.

Data are available in IS INFOSTAT and acces was given through the NSI website: https://www.nsi.bg/en/node/11616

Not applicable.

Not applicable.

• Metadata for agricultural land and rent price statistics are published in SDMX format on the NSI website under the heading “Metadata and methodology”;

• A Common methodology on Agricultural land prices and rents in agriculture in EU is available at the same link in Bulgarian and English.

Metadata and the Common Methodology can be accessed at the following link: https://www.nsi.bg/en/content/11615/agricultural-land-market-and-rent?qt-statistical_domain_en=2#qt-statistical_domain_en.

Quality report is not available.

The methods and procedures for the calculation of data are periodically described and their compliance with the Eurostat Common Methodology is documented.

During the meetings of the Agricultural Accounts and Prices Working Group, questions of methodological nature are discussed and examples of good data development practices are presented.

Comparative analysis with data from previous periods and other sources of information is made.

The assessment of the quality of the data is performed through an analysis of the representativeness of the collected information. This is done by measuring the achieved scope of survey and by comparing the survey data with data from other statistical areas - Annual business statistics - for investments of agricultural land in value and agricultural statistics - for the scope of leased land.

Comparisons are also made between the prices of transactions with agricultural land and rents in two consecutive years, at the lowest geographical level.

In case of established deviations (+; - 25%) they are subject to further clarifications with the respondents. Extreme (very low and very high) prices are usually excluded from the calculation of average prices.

The main user of data is the Ministry of Agriculture, Food and Forestry. Data are also provided to the business and to citizens.

The survey of user’s satisfaction is not conducted.

All required data sets, including data at regional level are reported to Eurostat. Data on irrigated and non-irrigated land are not compiled as far non-irrigated land is below as percentage of total agricultural land as the Common Methodology requires.

The accuracy of data is achieved by ensuring a satisfactory scope in the selection of respondents, development of reliable statistical tools, including IT environment for data collection, data control and data editing through elimination of extreme values and methodological instructions for survey implementation.

Sales of permanent grassland are limited in Bulgaria.

The permanently grassed areas, for the most part, are owned by the municipalities and are used for free grazing of animals (in the majority of cases).

The large differences in the reported prices of transactions with permanent grassland from year to year are usually due to the small number of transactions with small areas.

Not applicable.

Non-response rate is calculated.

Data from the Survey on agricultural land prices and rents in agriculture are published according to the Release Calendar of the results of NSI statistical surveys. Data were first published on 24.04.2017.

The data are geographically comparable for the entire period for which they are available.

The data are comparable in time for the period after 2010.

The internal coherence of data is ensured by using the same definitions, classifications, and methods of observation.

The budget (financial resources) needed for the implementation of survey is published in the National Statistical Program on the NSI website. In order to reduce the burden on respondents, an electronic off-line questionnaire containing logical controls is used.

According to the established policy, data revisions are made when the methodology, the classifications and definitions used are changed.

So far not data revision has been made.

The Farm Structure Surveys are carried out over a certain period of time (usually three years) and as far as land data are used as weights for weighing agricultural land prices and rents, for some of the years in the period it is necessary to recalculate the average prices, once the data on the areas by category of land are available.

Direct observation trough implementation of statistical survey.

Annual.

The National Statistical Institute of Bulgaria has provided Eurostat with annual data on the prices of agricultural land transactions since 2010.

The data are collected via an electronic offline questionnaire, which is sent to the respondent by e-mail. The questionnaire is also available on the NSI's website, where it can be downloaded from the respondents or experts from the Regional Offices, for subsequent filling in the required information. After filling in the data by the respondent, the questionnaire is returned by e-mail to a special address of the Regional Statistical Office, in the territory in which it operates. Each regional statistical office is responsible for collecting information from respondents on its territory. Experts at the Regional Offices are required to review the completeness and correctness of information received from respondents. Errors discovered are communicated to the respondents and are required to send correct information from them.

The validation of data in the process of statistical processing is done by means of specially developed software. The development of the software is in accordance with a technical specification written by the responsible experts for conducting the statistical survey. The validation of the data is done at two levels: at the regional level - by the experts in RSOs and nationally - by the NSI experts.

Not applicable.

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