Agricultural Structure Act passed: Lower Saxony protects small fields

Lower Saxony's red-green state government passed a new law on Wednesday that is intended to keep farmland affordable and prevent land speculation. Because, as Agriculture Minister Miriam Staudte (Greens) said in the debate in the state parliament, “access to affordable land is the prerequisite for independent business.”

This has become increasingly difficult in recent years, especially for smaller regional businesses, because the purchase and rental prices for agricultural land in Lower Saxony have risen enormously. The purchase prices for arable land have tripled from 2010 to 2025, as Staudte explained on Wednesday - from around 20,400 to 66,400 euros per hectare. For years there has only been one direction for lease prices: upwards. From 307 euros per hectare in 2010 it went up to 548 euros per hectare in 2023.

“We want agricultural businesses to be able to continue to farm land at fair prices in the future,” explains the SPD parliamentary group’s agricultural policy spokeswoman, Karin Logemann. The new law creates reliable rules for this. Roughly speaking, the law creates three main things: a price cap for the sale of agricultural land, an upper limit for the ownership of such land and a new approval requirement for so-called share deals.

The price brake, as the name suggests, is intended to help keep the ever-increasing costs in check. Because “purchase prices and leases have risen to such an extent that many companies simply can no longer keep up,” said the Greens’ agricultural policy spokesman, Pascal Leddin, in the debate on Wednesday.

If the sales price of an agricultural area is 35 percent higher than the usual local prices, the members of the property transaction committee, who are responsible for controlling the sale of agricultural areas in the districts, can now stop the transaction.

This control mechanism has been around for a while, but what is new is the price brake and what is also new is that from now on sales plans for areas larger than one hectare must first be reported to the districts. Previously this limit was half a hectare.

The new upper limit, in turn, stipulates that anyone who already manages more than eight times the average farm in Lower Saxony can be prevented from purchasing additional land.

According to the agricultural structure survey by the Lower Saxony State Office for Statistics, this average farm is 76 hectares in size. In 2020 there were 3 hectares less. At the same time, the number of companies fell by 3.7 percent to 34,040 between 2020 and 2023. The trend so far is: fewer, but larger companies.

The approval requirement for so-called share deals concerns investors, mostly from outside the industry, who do not buy the agricultural land themselves, but rather invest in the companies that own the land. So far, such transactions have often remained hidden from the authorities; no local farm can bid for the land, there is no land register entry, and investors often don't even have to pay trade tax.

Such an examination of share deals does not exist in any other federal state, which is why Staudte reached for the top shelf in her speech in the state parliament on Wednesday: “We are writing agricultural policy history with this law.”

Baden-Württemberg actually passed a similar regulation, but the aim was to specifically curb land purchases by farmers from neighboring Switzerland in a very specific area. There were also such attempts at regulation in some East German states. In short, they failed because of the farmers' lobby. The large companies prevailed.

The reactions to the new law are definitely positive – across camps. The BUND Lower Saxony, for example, sees the need for such a law to protect nature, biodiversity and the climate.

Rising land prices increased the pressure to intensify production in order to be able to operate profitably. “This makes sustainable business more difficult, pollutes the soil and water, and endangers biodiversity and habitats,” comments chairwoman Susanne Gerstner. The new law could help to make access to agricultural land more equitable and limit price increases.

“We hope that young farm managers in particular will have better opportunities to acquire or lease land in the future,” says Eberhard Prunzel-Ulrich, deputy chairman of the Lower Saxony/Bremen Farming Association (AbL). In this way they could build long-term future prospects for their farms. What will now be crucial is how the law is implemented in practice.