Source: UPI | 21 December 2012

"The Constitution protects Hungarian farmland, our heritage and the basis of our livelihoods, from foreign and domestic speculators alike."

BUDAPEST, Hungary, Dec. 21 (UPI) -- Hungary this week moved to ban foreign ownership of agricultural land under its new constitution amid fears over the future of family farming in the country.

The Hungarian Parliament passed a government proposal Monday to amend its 2011 Constitution, or Fundamental Law, to assure that in the future, only Hungarian farmers can purchase Hungarian farmland.

The law set Hungary on a collision course with the European Union, which had given Hungary until 2014 to phase out similar restrictions under previous laws as a condition of continued financial and development aid.

The government of conservative Prime Minister Viktor Orban hailed Monday's 263-87 vote as providing "stability, predictability and the opportunity for secure planning for those who live off agriculture."

Backers say it will halt an influx of foreign "speculators" from Austria, Italy and elsewhere who are using subterfuge to snap up distressed family farms at bargain prices.

"This is the beginning of a new era for agriculture," a statement issued by the Hungarian Ministry of Rural Development said. "The Constitution protects Hungarian farmland, our heritage and the basis of our livelihoods, from foreign and domestic speculators alike."

Orban's governing Fidesz Party and nationalist allies such as the Jobbik Party have raised alarms that Hungary's vital farm sector is being undermined by foreign banks and investors who are getting around land ownership restrictions by signing "pocket contracts" with farmers.

Under the alleged deals, the government says foreign investors set up illegal arrangements in which they will gain outright ownership of vast stretches of farmland after 2014 when an EU exemption for Hungary's restrictions expires.

Orban says the new law is meant to help small- and medium-size farmers stay independent as Hungary attempts reduce unemployment levels in its farming regions and boost production after decades of collectivism under communist rule.

The Jobbik Party in April had a demonstration near Gorgeteg in southwestern Hungary at a farm owned by a member of the Italian Benetton family. Protesters demanded an end to foreign ownership, Hungarian news agency MTI reported.

"Jobbik wants all unjust and immoral land ownership to stop in Gorgeteg and elsewhere in the country so that a network of local small and medium-sized family land ownership can take roots," Balazs Ander, a county councilman, said at the protest.

Socialist opponents, however, say fears of foreigners buying huge tracts of cheap farmland are exaggerated and are being used as a cover to deflect attention from the government's plans to privatize state-owned farmland into the hands of political cronies.

Jozsef Angyan, a former Hungarian secretary of state and one-time Fidesz lawmaker who bolted the party over the issue, says only a handful of bidders are benefiting from the process after the party used a promise to favor small, independent local farmers as a key to its 2010 election victory, The New York Times reported.

The new constitution was instituted shortly thereafter.

The government denies those claims and says the moves are necessary to preserve "the backbone of Hungarian agriculture" and to ensure that families in economically hard-hit rural areas will have jobs in the future.