| KALOCFA, Hungary, March 7
KALOCFA, Hungary, March 7 Austrian farmers
working in Hungary could be forced off their land under new laws
initiated by Prime Minister Viktor Orban, a prospect that angers
Vienna and could revive conflict between Orban and Brussels.
Orban, bolstering his reputation as a champion of national
interests against foreign interference, accuses the farmers of
using sharp practices to obtain the land.
"Where there is farmland, there is battle," his agriculture
minister Sandor Fazekas told a farming conference in Budapest
But the European Commission has little patience with Orban
after clashing with him on issues from media freedom and
independence of the judiciary to swingeing taxes on business
sectors with high foreign ownership, such as banks and
While Brussels examines whether Orban's land laws infringe
the bloc's principles of free movement and shared economic
rules, Orban's government is appealing to Hungary's history as a
nation often called upon to defend its fertile plains from
"We need to do everything we can to ensure that farmland, be
it leased or owned, remains with Hungarian people, Hungarian
farmers and Hungarian smallholders," Fazekas said.
Orban's party is comfortably ahead of the main leftist
opposition groupings in opinion polls before a parliamentary
election in April. However, the far-right Jobbik party has
challenged the government to take even stronger action against
foreign land users.
Hungarians sometimes refer to Austrians as their in-laws
because of the joint empire they forged in the 19th century. But
Hungarians struggled for equal status in that union and there is
still a wealth gap.
Many Austrians living in the east of their country go to
Hungary for cheap dental treatment, while Hungarians cross the
border to sell fruits and vegetables or tackle household repairs
for less than most Austrian workers would accept.
COMPENSATION IN DOUBT
Budapest says some Austrians got around an EU-approved
moratorium on foreigners owning farmland by drawing up special
contracts with the landlord, which give them quasi-ownership
rights. The government has drafted a law which, when it comes
into force in May, will render those contracts illegal.
Starting in May, foreign farmers can in theory own farmland
because the moratorium expires. In practice the requirements are
so onerous that most of the farmers operating with the
quasi-ownership contracts will have to shut up shop.
Previous measures that hurt foreign investors were on a much
bigger scale. A relief scheme for struggling borrowers cost the
banks - most of them foreign-owned - about 1 billion euros ($1.4
billion). Austrian lenders Erste Bank and Raiffeisen were among
the biggest losers.
Vienna says that while the latest legislation is likely to
affect only some of the 200 Austrian farmers working in Hungary,
it challenges the EU's fundamental rules.
The European Commission told Reuters it is looking into
whether Hungary's changes are compatible with EU law, especially
if they result in Austrian farmers losing their land with no
Austrian Agriculture Minister Andrae Rupprechter said he
expected the Commission to rule next month.
"Free movement of capital is in question," he told Reuters
in Vienna. "I'm confident that the commission will make a clear
judgment in our favour."
Austria hopes to resolve the issue bilaterally, saying the
farm ministers will meet promptly after Hungary's election.
ORBAN'S BARN CABINET
The issue is something of a personal crusade for Orban. In a
previous stint as prime minister, 13 years ago, he held a
cabinet meeting in a barn in the farming village of Kalocfa,
about 25 km (15 miles) from the border with Austria.
He had come to the village, surrounded by flat open fields
of wheat and maize, to focus attention on the Austrian farmers.
"We need to put an end to this. This Austrian racket that
has been going on here cannot continue," Orban said then.
"Every Austrian farmer who has evaded Hungarian law and
bought land should be happy to get away with it unscathed."
Near Kalocfa today, an Austrian farming company has about
700 hectares (1,730 acres) of land, three workers there told
Reuters. They said the owner was not on the site, but a jeep
with an Austrian number plate was parked near an office building
at the farm.
The owner did not respond to a request for an interview.
Some foreigners bought farmland outright during a brief period
when it was legal for them to do so.
The mayor of Kalocfa, 33-year-old Andras Szabo, said local
people had mixed views on the Austrian presence. "Sometimes it
is good, other times it is bad. I think an Austrian farmer is
neither better nor worse than a powerful Hungarian farmer."
But he said many smallholders cannot expand their property
because of rising land prices. Szabo's family farms on a meagre
43 hectares near a road carrying heavy truck traffic.
Others in the region also complained about having to compete
for land. They did not want to be named for fear of antagonising
their Austrian neighbours.
Near the village of Bajansenye, locals said more than half
of the farmland is used by foreigners.
One smallholder in his 40s said he moved to a nearby village
with a dream of building his own farm, but was stuck with a tiny
plot because of foreigners buying up all the land.
($1 = 0.7225 euros)
(Additional reporting by Georgina Prodhan in VIENNA; Editing by
Christian Lowe and Ruth Pitchford)