Why is Croatian farmland the cheapest in the EU?

Croatia

Croatian farmland remains the most affordable in the European Union, according to the latest data from Eurostat.

In 2023, the average price of one hectare of arable land across the EU stood at €11,791. In contrast, in Croatia, that same hectare cost just €4,491 on average.

At the other end of the scale, Malta recorded the highest prices – a staggering €283,039 per hectare.

However, this figure is somewhat distorted due to Malta’s limited agricultural land and the pressure to convert it into building zones. The real price leader in the EU is the Netherlands, with an average price of €178,093 per hectare.

The rental market also reflects significant differences. Renting a hectare of farmland or permanent grassland in the EU averaged €173 last year. Again, the Netherlands topped the list at €914, followed by Denmark (€594) and Greece (€498).

Croatia ranked near the bottom with an average of just €74 per hectare, second only to Slovakia.

Why So Low?

As Agroklub reports, Croatia’s low land prices are a reflection of deeper, long-standing issues in the agricultural sector.

Decades of neglect and a lack of strategic focus have left the sector with fragmented land ownership, unresolved property rights, and large areas of unutilised or overgrown land.

Many plots are too small or poorly connected, making farming less efficient.

Additionally, negative demographic trends have led to fewer people living in rural areas – and with fewer people, comes less demand. Poor infrastructure and weak regional connectivity further reduce the attractiveness of rural areas.

The land market remains sluggish, with relatively little trading activity. Low state rental rates and past restrictions on foreign ownership have also kept prices down, Agroklub says.

What If Prices Rose?

Higher land values could actually benefit Croatian farmers. Those who own land would see their net worth increase, and higher land value could serve as collateral for better credit conditions.

In countries like the Netherlands, selling one hectare could fund the purchase of a tractor. In Croatia, you’d need to sell 39 hectares to do the same.

Increased land value could also draw interest from investors and banks, positioning agriculture as a more appealing and stable industry. When something is worth more, it’s more likely to be maintained and improved. Farmers might be more inclined to invest in soil fertility or long-term improvements.

Of course, rising prices aren’t good news for everyone. Young or new farmers could find it harder to enter the sector, while increased land values would also mean higher rents – adding pressure to those who rely on leasing.

Prices Are Moving

Despite being the cheapest in the EU, farmland prices in Croatia are not stagnant. From 2015 to today, average prices have risen by around 65%, significantly outpacing inflation, which stood at 22.7% in the same period. In other words, landowners are getting wealthier – at least on paper.

This raises the question: what would happen if the state sold off its agricultural land to local farmers? Could that inject new life into the sector and help unlock the hidden value in Croatia’s countryside?