Market Price and Supply of Farmland as a Means of Supporting the Wider Development of Sustainable Agricultural Production in Czechia (a Case Study)

Abstract

The goal of this article is to predict the further development of the market price of farmland in Czechia. As part of this goal, the environmental and socio-economic factors affecting the quantity and quality of farmland and, subsequently, the amount of its market price will be discussed. In addition to the quality of the farmland, the market price of individual plots of land is influenced by a number of other factors, such as the size and shape of the plot, location, erosion risk, the concluded usufructuary lease agreements, competition from buyers in the vicinity, and other factors. The average market price of farmland in Czechia was 29.4 CZK/m² in 2021, which represents an increase of 16.1% against the amount of 25.3 CZK/m² in 2020. According to the results of the statistical analysis, it is possible to assume a constant increase in the prices of farmland precisely because of the ever-decreasing area of land intended for agricultural production. Another factor for the increase in prices can be increased inflation. In 2027, market prices for farmland could reach up to 40 CZK per m². Nevertheless, Czechia is among the countries with the lowest market price of farmland; the price is even lower than in neighboring Poland or Spain. This also contributes to the fact that the market prices of farmland in Czechia are increasing at a relatively fast pace every year.

1. Introduction

Agriculture is considered an important sector of many economies. However, the area of land suitable for agricultural use is still declining in Czechia [1].

According to Huettel et al. [2], “land is undisputedly the most important production factor with limited overall supply that even continuously declines because it is successively taken out of production for recreation or ecological compensation areas, or because it is needed for buildings or street/motorway construction”. Ustaoglu and Collier [3] add that, “in the last decades, there have been large areas of agricultural land that were abandoned in Europe, producing significant social and environmental impacts”. Xie et al. [4] further add that “Farmland abandonment has important impacts on biodiversity and ecosystem recovery, as well as food security and rural sustainable development. Due to rapid urbanization and industrialization, farmland abandonment has become an increasingly important problem in many countries”. Since the 20th century, approximately 385–572 million km² of farmland has been abandoned in the world [5].

The growth of the market price of farmland due to its scarcity (caused by its use for construction and other purposes) presents a significant problem. An average of 7000 hectares of arable land is disappearing from the Czech landscape every year. With a total arable land area of 2.9 million hectares, this appears to be a low number, but according to farmers, it is still alarming [6]. The reason is that the change to a building plot is irreversible.

The Ministry of Agriculture of Czechia is pondering how to prevent further losses of arable land in favor of builders. The state already tried to deal with the excessive interest of developers five years ago, when it drastically (up to 15 times) increased the fees for removing arable land from the agricultural land fund. However, this was apparently not enough in the time of a growing economy. According to the ministry, fees cannot be increased indefinitely.

Fees for exemption from the land fund are undoubtedly a tool that is effective in directing small individual construction. As a means of regulating industrial construction, it turns out to be not very effective, considering the economic possibilities of large investors. The Ministry of Agriculture of Czechia is therefore considering an absolute ban on such a change [6].

According to the statistics of the Ministry of the Environment, not only is residential and industrial construction involved in the decline, but also the extraction of mineral resources. “The specific system of processing the natural resources, which has evolved throughout centuries, has made the globe a large industrial center and an area of intensive agricultural exploitation-which both constitute considerable burden for the natural environment” [7].

Farmland abandonment occurs extensively worldwide in both developed and developing countries [8,9,10,11]. Baumann et al. [12], Queiroz et al. [13], and Li and Li [14] add that the phenomenon of farmland abandonment has mainly occurred in developed countries, such as Europe, the United States, Australia, and Japan. However, in recent years, farmland abandonment has also occurred in developing countries [15,16,17].

“Agricultural land is a limited natural resource with increasing economic value” [18]. Sklenička et al. [19] add that “the spatial variability of farmland prices is determined by factors reflecting agricultural use, and also by location-specific characteristics, which are crucial to the conversion of farmland to non-farming uses”. However, it should be noted that “in periurban belts, landowners expect agricultural parcels to be converted to urban use and so farmland prices fall with distance from cities, owing to premiums reflecting potential capital gains from such future development” [20].

Livanis et al. state that “a theoretical model of farmland valuation is developed that allows urban sprawl to affect farmland values through the conversion of farmland to urban uses, shifts in production to higher-valued crops, and the speculative effect of urban pressure on farmland values” [21]. However, “there is no evidence that non-agricultural investors buy and sell land more frequently than farmers” [22].

“Conversion of farmland to non-farm uses significantly influences the spatial variability of farmland prices” [23]. As stated by Jadevicius, “land prices influence housing affordability, food security and the carbon infrastructure” [24]. Lence [25] add that “the historical behavior of farmland prices, rental rates, and rates of return are examined by treating farmland as an asset with an infinitely long life”.

Baker et al. [26] realize that “farmland prices have risen dramatically in recent years, which has attracted interest from the broader investment community. At the same time, concern is being expressed regarding another bubble in farmland prices”. There is no doubt that “farmland price expectations play a critical role in farm investment decisions, yet previous studies suggest that market experts’ expectations are not rational. That is, market experts do not make efficient use of all available information” [27]. Humpesch et al. [28] investigate the conjecture that existing land lease contracts influence buyers’ and sellers’ costs of being information deficient and, thus, their bargaining position, their expectation formation about future returns, and thus ultimately, the farmland price is too.

Recent research on farmland price developments in Germany and worldwide has covered different dimensions: among others, the general price increase over the last decades [29,30], as well as regional price dispersion [31,32], and the evaluation of farmland policies [33] were investigated [34].

In their article, Just and Miranowski [35] develop a structural model of land prices, and its results show that “inflation and changes in the real returns on capital are major explanatory factors in farmland price swings in addition to returns to farming”.

Farmers are still responsible for most of the farmland trade, even though, in recent years, the number of Czech and foreign investors aware of the opportunity to make a profit has also increased. Therefore, the market price of farmland is still growing in Czechia. However, the price of farmland is increasing in other countries as well. These countries include the US, where “between 2000 and 2010, inflation-adjusted U.S. farmland values increased by over 80%” [36], and Tanzania, where “real land prices rose significantly between 2009 and 2013 by 5.67% per year” [37]. However, it should be noted that higher farmland prices may not benefit current landowners if potential renters or buyers cannot afford to rent or purchase farmland at a high price [38].

“Sustainable agriculture involves obtaining healthy and quality foods, conserving natural resources and preserving biodiversity” [39]. The sustainable development of agricultural businesses on the land is essential, given the need for food production for the world’s growing population. Escoto et al. point to a multifaceted conception of the nature of sustainability: “sustainability plays an important role in society by improving long-term quality of life, including future generations, seeking harmony between economic growth, social development and the protection of the environment” [40]. However, it should be noted that “modern agriculture and modern small-peasant production have different requirements for agriculture sustainability” [41].

The need for sustainable development is caused not merely by environmental limitations but also economic and social limitations resulting from increasing competitive pressure from the global economy, evidence of which can also be seen in the developments in the European Union [42]. Sustainable development is one of the main objectives of the European Union. According to its principles, the economic aspect of development should perceive society and the natural environment not as inhibitors but rather as stimulants [43]. Prus [44] further adds that “the idea of sustainable farming entails farming production management which allows for the efficient use of natural resources in order to achieve financial profit, while respecting the laws of nature and meeting expectations of society at the same time”.

Sustainable agricultural development is now becoming the subject of much scientific research, as a third of the world’s arable land has disappeared over the past 40 years. This was mainly caused by erosion and pollution. This can have unfathomable consequences, also in view of the ever-increasing world demand for food.

Continuous plowing combined with the excessive use of fertilizers leads to soil degradation worldwide. At the 2015 Climate Conference in Paris, scientists from the University of Sheffield drew attention to the fact that arable land is disappearing much faster than the rate at which new land is created in nature. An analysis of various pieces of research from the last 10 years showed that the rate of decline is “catastrophic”. The changes may be irreversible unless there is a significant reconsideration of farming practices. Erosion progresses up to 100 times faster than new soil is formed. The formation of the top 2.5 cm thick layer of soil takes 500 years [45].

The structure of the article starts with an introduction in the form of literary research based on findings made by renowned economists in connection with the market price of land and the sustainable development of agriculture. The methodology explains the scientific research procedure, particularly the statistical development and prediction of the indicators under review. The results look into the individual indicators, in both a quantitative and qualitative nature. The discussion is focused on the confrontation of experts’ views on the outcomes of the preceding chapter. It also contains an evaluation of the hypotheses provided at the beginning of the paper, as well as recommendations for the entities involved. The conclusion highlights the interesting consequences resulting from the given case study.

A research gap can be found in the action (effect) of economic and environmental factors on the market price of land in the Czech Republic that has not been studied so far.

The goal of this article is to predict the further development of the market price of farmland in Czechia. As part of this goal, the environmental and socio-economic factors affecting the quantity and quality of farmland and, subsequently, the amount of its market price will be discussed.

The results of the research will be compared with the previous findings of similar research from 2020. In order to verify the validity of the acquired knowledge about the price of farmland in economic practice, two hypotheses were established:

Hypothesis 1. 

The significant increase in the price of farmland in the Czech Republic in recent years has also been caused (in addition to its previously low price) by a lack of government regulation of the land market, which resulted in the use of high-quality farmland for the purpose of constructing buildings and roads.

Hypothesis 2. 

The ongoing increase in the price of farmland (especially arable land) in the Czech Republic in the following years will mainly be caused by the fact that landowners will be concerned about possible land degradation resulting from the poor condition of the countryside (soil erosion, etc.) which lowers the quality of land, leading to its lower price or even being unmerchantable. As a result, it will manifest itself in the increased market price of high-quality farmland available for sale on the market.

2. Materials and Methods

2.1. Definition of Market and Official Price

2.1.1. Market Price of Farmland

The market price of farmland means the price that can be reached in the market between a voluntary buyer and a voluntary seller when both parties act in an informed, reasonable manner and at the same time with sufficient presentation of the supply on the market. Market prices of farmland are not considered to be prices achieved during transfers when one of the parties is significantly disadvantaged when negotiating the deal. Such a disadvantage can be, for example, ignorance of current land prices, insufficient presentation of the supply on the market, or acting under the pressure of circumstances [46].

2.1.2. Official Price of Farmland

The official price of farmland is a normatively determined price based on regulations of the Ministry of Finance and Ministry of Agriculture based on the capitalization of the rental effect (net yield), determined for each evaluated soil ecological unit (ESEU). They are used particularly for calculating the land tax. The prices set for individual ESEU should reflect the economic effect of agricultural production on specific plots of land. When negotiating deals, they are only informative and provide information about the likely quality of land in a specific location. Official prices can be considered hypothetical prices that should reflect expected market conditions to some extent. However, currently, the market price does not depend on the official price but follows the law of supply and demand.

In practice, these prices are mainly used for the valuation of land for the purposes of calculating the tax on the acquisition of immovable property, as the prices, according to ESEU, are subsequently adjusted by the surcharge or deduction established by decree. For individual cadastral territories, they are the weighted average of the prices of individual plots of land according to ESEU in the relevant cadastral territory.

For the year 2021, the average base price of farmland was adjusted in a total of 107 cadastral territories (out of a total of 13,035 cadastral territories with registered farmland), out of which the price was reduced in 51 cases and increased in 56 cases.

The average annual exchange rates valid in the given year, according to the Czech National Bank, were used to convert the Czech koruna to the US dollar. The exchange rate between the Czech crown and the US dollar used in the article was between 17.11–25.70 CZK/USD in the years 2004–2022. The average exchange rate in the mentioned years is 21.62 CZK/USD. A uniform exchange rate of 27 CZK/EUR was used to convert the Czech koruna to the euro and was valid for the entire period of currency intervention of the Czech National Bank from 2012–2017. The average annual exchange rate to convert the Czech koruna to the euro in the following years was 25.61 CZK/EUR.

2.2. Statistical Analysis of Land Market Price Time Series

The description of the long-term development of the time series of the farmland market price in Czechia in the years 2005–2022 was carried out using exponential smoothing methods. The created model was subsequently used to predict the evaluated indicators. The solution procedure was based on the assumption that the next value in the time series is influenced by the previous value. However, a new value in terms of time has more weight (formally more importance) in the model than a value a period older. The prediction was made using the double exponential smoothing method (Holt’s method), which was extended by an exponential trend [47]. The original Holt’s model with smoothing constants α and γ was enriched with a phi coefficient. Constant α is used for smoothing the level of the time series, and constant γ for the balance of the trend quantity:

$${\alpha }_{Holt}=\alpha \left(2-\alpha \right);{\gamma }_{Holt}=\frac{\alpha }{2-\alpha }$$

(1)

α ∈<0;1>, γ ∈<0;1>, phi ∈<0;1>

(2)

The parameter α adjusts the degree of adaptation. The higher its value, the faster the method reacts to changes in the data. The parameter γ defines the smoothing levels of local linear trends. The phi coefficient can lead the trend to a value to which the time series tends to converge. Mean Absolute Percent Error (M.A.P.E.) was decisive for the final choice of smoothing constants (α, γ, phi). The selection of the model was based on the usual rule, which considers the case with the M.A.P.E value below 5% as a very good prediction model and, as a satisfactory model, the case with M.A.P.E. below 10% [48]. Statistical calculations were performed in the STATISTICA software environment of version 13.

A total of 28 farmers from the Mýto u Rokycan cadaster (West Bohemia) were surveyed with a research question concerning the sale or purchase of farmland at its current market price in Czechia (see Section 3.10).

3. Results

3.1. Market Price of Farmland in Czechia in 2018–2022

In addition to the quality of the farmland, the market price of individual plots of land is influenced by a number of other factors, such as the size and shape of the plot, location, erosion risk, concluded usufructuary lease agreements, competition from buyers in the vicinity, and others. An interesting new aspect in the thinking of investors is also the predicted climatic future of the region. This, for example, has already had a slightly negative impact on the perception of the South Moravian region.

The development of farmland market prices in 2018 was different from previous years. In the previous 13 monitored years, prices rose steadily, even with year-on-year growth exceeding 10% since 2014, and they grew fastest in 2016 by 25.5%. In 2018, after a long time, we can talk about the stagnation of land market prices.

The average market price of farmland in 2018 only slightly increased by 2.4% to the amount of 240,850 CZK/ha (i.e., 24.1 CZK/m²) from the amount of 235,111 CZK/ha (i.e., 23.5 CZK/m²) in 2017 (Figure 1).

Even in 2018, farmland was traded most often at market prices in the range of 15–40 CZK/m². For exceptionally high-quality plots of arable land and, at the same time, in locations with high competition among buyers, prices even exceeded the mentioned upper limit, exceptionally by up to around 50 CZK/m². However, these premium prices were achieved less frequently than in the previous year.

The difference between the market prices of arable land and the prices of permanent grassland (PG) stabilized in 2018 at a similar level as in the previous year, namely 33% in favor of arable land (34% in 2017). In 2021, arable land was sold at prices, on average, 33% higher than in the case of PG, which was a smaller difference than in the previous 2 years (Figure 2).

For comparison,

Table 1. Development of farmland hectares (ha) [49].

	Arable Land	Permanent Grassland	Forest Land
2004	3,054,654	971,748	2,645,737
2005	3,047,249	973,789	2,647,416
2006	3,039,669	976,226	2,649,147
2007	3,032,448	977,988	2,651,209
2008	3,025,597	979,718	2,653,033
2009	3,016,858	982,776	2,655,212
2010	3,008,090	985,859	2,657,376
2011	3,000,390	989,293	2,659,837
2012	2,993,236	991,523	2,661,889
2013	2,985,792	994,461	2,663,731
2014	2,978,989	997,225	2,666,376
2015	2,971,957	1,000,620	2,668,392
2016	2,965,606	1,003,393	2,669,850
2017	2,958,603	1,006,552	2,671,659
2018	2,951,395	1,011,095	2,673,392
2019	2,940,927	1,017,555	2,675,670
2020	2,931,912	1,022,716	2,677,329

shows the development of the area of the individual types of land in the Czech Republic.

After a long period of dynamic growth in land prices in the monitored years (2004–2017) and the calming of the situation brought about by 2018, 2019 can be assessed as a period without significant events and movements in the land market.

The average market price of farmland in 2019 was at the level of 243,985 CZK/ha (i.e., 24.4 CZK/m²), which represents an increase of 1.3% compared to the amount of 240,850 CZK/ha (i.e., 24.1 CZK/m²) in 2018. When considering the low amount of price changes, the development of land market prices in 2019 can be characterized as price stagnation with a slight recovery towards the end of the period. The year 2019 was the first year over the entire monitored period in which the market prices for farmland grew more slowly than inflation, which was 2.8% in 2019 [46].

In 2019, farmland was traded, as in 2018, most often at market prices in the range of 15–40 CZK/m². Especially at the end of the year, premium prices even exceeding 50 CZK/m² were achieved. It was always a sale of exceptionally high-quality plots of arable land, mostly with a certain added value, e.g., plots within reach of larger settlements, irrigated plots, etc.

In 2019, the difference between the market prices of arable land and the prices of permanent grassland (PG) increased significantly. For arable land, prices rose by 2%, while for PG, on the other hand, prices fell slightly by 1.6%. Thus, in 2019, arable land was sold at prices 38% higher than in the case of PG (Figure 2). The question is whether this is a one-time fluctuation or a long-term increase in the difference between the prices of arable land and PG.

From the point of view of the size of the deals in 2019, the structure was similar to previous years. Medium-sized offers with an area of 5 to 10 ha continued to be the most sought-after and best traded. The demand for very small plots of land of up to 0.5 ha, which can be difficult to sell in some locations, has visibly decreased. The integrity of the plot, compact shape, and separate access to the plot are advantages to the sale.

The situation on the farmland market was affected by the onset of the COVID-19 epidemic at the beginning of 2020. The average market price of farmland in 2020 was at the level of 253,510 CZK/ha (i.e., 25.4 CZK/m²), which represents a growth of 3.9% against the amount of 243,985 CZK/ha (i.e., 24.4 CZK/m²) in 2019 (Figure 1). The land market, therefore, continued to go through a quiet period, and if it were not for the abolition of the tax on the acquisition of immovable property, the growth in the price level would have been minimal in 2020.

In 2020, farmland was traded most often at market prices in the range of 20–40 CZK/m². Prices above the mentioned upper limit were achieved for very high-quality land or for land near large cities. In 2020, arable land was sold at prices 35% higher than in the case of PG, which is a smaller difference than 38% in the previous year (Figure 2).

The average market price of farmland in 2021 was at the level of 294,326 CZK/ha (i.e., 29.4 CZK/m²), which represents a growth of 16.1% against the amount of 253,510 CZK/ha (i.e., 25.3 CZK/m²) in 2020 (Figure 1). After 3 years of prevailing stagnation, the land market returned, expressed as a percentage, to double-digit price growth.

In 2021, farmland was traded most often at market prices in the range of 20–45 CZK/m². For the best quality soils and plots with suitable parameters (such as shape, size, access to the plot, and integrity) or for plots near large cities, prices even exceeded 50 CZK/m². In 2021, arable land was sold at prices on average 33% higher than in the case of PG, which was a smaller difference than in the previous years (Figure 2).

According to Farmy.cz, the price of traded farmland in 2022 increased by almost 14% to around CZK 335,000 per hectare [46]. Competing company Agro21 states an average price of CZK 320,000 per hectare [50]. The difference is determined by what kind of deals the landowners made through these companies.

The distribution of prices from a regional perspective was almost identical in the period 2018–2022. The change could only be observed in the area of South Moravia, which is cited as the most threatened area in connection with the issue of drought, and investor preferences are also adapting to this. Above-average prices were achieved in the vicinity of Prague, in the Haná region, and in the districts of Kolín, Hradec Králové, Mladá Boleslav, and Nymburk, i.e., the most fertile regions of the Czech Republic, and other localities with high-quality arable land. Higher prices were also achieved for soils of lower or average quality in some border areas, especially southwestern Bohemia (especially in the districts of Tachov and Cheb) and partly also in southern Moravia. In these areas, prices were influenced by the demand of interested parties from Bavaria and Austria. In the northern regions of Czechia, the influence of proximity to the border on the price of land remained minimal.

In 2022, the government declared an increase in support for family and organic farms at the expense of the largest agricultural enterprises. However, these changes should not significantly affect the land market, as it is only an adjustment to the distribution of a similar volume of total subsidies. The change in the subsidy policy will probably result in an increase in the profitability of smaller farms, which could then bring a positive effect to the owners in the form of a higher selling price in the event of their sale.

Land will continue to be seen as a suitable anti-inflationary investment. Given the development of inflation in 2022, it is more likely to expect a further rise in farmland prices.

3.2. Expected Development in 2023 and Predictions for the following Years

Agro21 has predicted a slowdown in land price growth for 2023, according to which it will increase by about a tenth, year-on-year [50]. However, there is a risk that the price of renting farmland, the so-called usufructuary lease, will increase significantly (see Section 3.3). The risks connected with agricultural production are covered in another study [51].

The following Figure 3 expresses a statistical forecast of the development of farmland market prices in Czechia until 2027. The forecast was made on the basis of the methodology presented in Section 2.2 and expressed the fact that the market prices of farmland will continue to grow significantly in the following years. In 2027, they could reach up to CZK 400,000 per ha (Figure 3).

3.3. Usufructuary Lease (and Its Effect on the Market Price of Farmland)

It is important to understand the difference between a usufructuary lease and tenancy. A usufructuary lease refers to the use of a leased object (farmland) with an effort made to improve it and the possibility of obtaining benefits from it, which is in contrast to a tenancy, where the leased object is used without further improvement.

A characteristic feature of land ownership and use in Czechia is still (on a European scale) the relatively high proportion of leased land, which is, however, steadily decreasing. Currently, more than a quarter of the acreage of farmland is owned by farmers who farm this land [49].

According to the FADN sample survey, the amount of usufructuary leases is significantly differentiated according to production areas on the best quality soils in the corn or beet production area, where it is 2–2.5× higher in the cross-section of individual years than in the mountain production area [52].

Representatives of the Agrarian Chamber of Czechia already assumed (in 2022) that in the following year, landowners will most likely try to increase the tenancy for farmers, and this is due to the fact that smaller-scale farmers will receive more money from 2023 in the payment of the first hectares (the so-called redistributive payment). In autumn 2022, when concluding new usufructuary lease contracts, a number of farmers encountered a demand for a radical increase in usufructuary leases in connection with an increase in the payment for the first hectares. The fear that a disproportionately high redistributive payment (see Section 4.2) will lead to a sharp rise in usufructuary lease prices for active farmers, regardless of the size of the cultivated area, has come true [1].

From the end of a 2022 survey of roughly 160 companies, it follows that usufructuary leases were already increasing: more than a third of them, up to 10% in 2022, and for a quarter of them, up to 20%. Almost 80% of the companies expected further increases in usufructuary lease costs in the near future [53]. However, most usufructuary lease agreements are concluded after 5 years, and the price increase can therefore be spread over several years.

The increase in the number of applicants for redistributive payment can be expected to be around 3 to 5% in 2023, and it will mainly consist of newly established organic farms (because it is not easy to implement a combination of organic and conventional agriculture anew) and the farms of beginner farmers [54].

The number of applicants for subsidies will become clear in May 2023, when applications will be submitted to the intervention fund. If the purposeful division of farms was discovered at that time, the farmer would lose not only the subsidy for the first hectares but also the right to all future subsidies for the “purposefully” divided farm [53].

3.4. Investing in Farmland in Czechia (Supply and Demand for Farmland)

On the side of the demand for farmland in Czechia, the following main groups of investors can be distinguished for research purposes:

• Agricultural investors, who are farmers and agricultural companies whose main motivation is to own land as a means of production;
• Long-term non-agricultural investors who purchase land for medium to long-term tenure; the main motivation is a reasonable long-term investment return and its security;
• Speculative non-agricultural investors who purchase land with the intention of selling it over a shorter period; their main motivation is the realization of maximum profit in a short period.

In 2018, a continued decline in interest in larger plots of land over 50 ha was noted, which is most noticeable in the offers of larger portfolios from non-agricultural investors. These portfolios are often composed of a large number of diverse plots of land in terms of size, type, location, and shares owned, with a number of different usufructuary lease relationships. Until about 2016, these larger portfolios of land were in sufficient demand, and an above-average price could be expected when sold. In 2017, interest in these offers was already declining, and this trend continued in 2018. Currently, when selling such a portfolio, it is quite likely that it will be sold at a lower price than when selling smaller areas in individual locations. To a similar extent, the demand for larger areas of integrated plots of land and plots of land densely concentrated in one location has not yet decreased, but even for such offers, it is no longer possible to expect a significantly higher price than for the sale of smaller plots of land [46].

Much more complicated are the sales carried out in the form of a transfer of a company (mostly LLC), which are perceived by investors as significantly riskier and more administratively demanding, and the range of those interested in such offers is considerably limited.

In 2018, the highest demand on the market was for a medium-sized acreage of 5–10 ha. Year-on-year, market prices increased similarly for all monitored size categories (sizes of up to 2 ha at +2.4%, sizes of 2–5 ha at +2.7%, and sizes of over 5 ha at +1.3%). Only the category above 5 ha showed slightly slower growth; however, the mentioned differences are negligible in view of the possible statistical error.

In 2019, the overall demand for land fell for all monitored groups of investors. However, the share of agricultural investors in deals realized at market prices in 2019 increased to 63% compared to 61% in 2018 (Figure 4). The share of long-term non-agricultural investors in deals realized at market prices in 2019 decreased to 37% compared to 39% in 2018. Nevertheless, at the end of 2019, there was a noticeable increase in interest in purchasing land from this group of investors (Figure 5). Foreign investors continued to be dominated by interested parties from Germany, and increased interest was also noted for investors from the Netherlands and Belgium. These buyers were partly motivated by an interest in farming on the purchased land, and partly, the land was acquired as a rental investment. No significant interest from non-EU countries was noted.

The total supply of land in 2019 also decreased. Some of the advertised offers were offered by the owners at prices that are no longer realistically achievable; there was mainly a lack of 5–10 ha plots available for investment on the market.

The total supply of land in 2020 decreased only slightly, but the structure of sellers is slowly changing. From the offers presented on the market, it is clear that the majority of the offers on the market are no longer offers from the original owners (restituents and their descendants) but from investors who bought the land as an investment and are now offering land from their portfolios for sale. Some of the offers advertised in this way are offered at prices that are not normally achievable on the market, and the seller is more likely to try their luck at selling at least small parts of their portfolios at these inflated prices. Farmland is increasingly treated as a commodity without the emotional ties of the former owners.

At the beginning of 2020, the overall demand for land fell slightly for all monitored groups of investors. The share of agricultural investors in deals realized at market prices decreased quite significantly to 59% in 2020 compared to 63% in 2019 (Figure 4). On the contrary, the share of long-term non-agricultural investors in deals realized at market prices increased to 41% in 2020 compared to 37% in 2019. The increased interest in the purchase of land by non-agricultural investors can be attributed to the greater interest of citizens in investing in real estate during a possible crisis (pandemic, energy, etc.) and also to the faster projection of the fears and uncertainties of individual investors into the demand and purchase of real estate.

The total supply of farmland fell slightly again in 2021. Due to high demand, plots offered at acceptable prices were sold faster than in the past (Figure 4). The selection of land continuously offered for sale was, thus, significantly more limited. On real estate websites, there usually remained offers of land offered at excessively high prices.

Increased purchase demand was seen mainly from non-agricultural investors who saw farmland as a safe investment in uncertain times. Since 2014, the share of non-agricultural investors in land transfers realized at market prices has been steadily decreasing, and farmers were increasingly predominant, yet, in 2020, this trend has reversed, and in 2021 the share of non-agricultural investors was already 48% (Figure 4).

The share of speculative non-agricultural investors in deals realized at market prices has already been negligible in the last 3 years. However, the owners continue to be approached by correspondence with buyout offers below fair market prices.

The structure of foreign investors remained similar, with the predominance of interested parties from Germany. No significant interest in the purchase of land by investors from outside the EU was noted. Nevertheless, it is appropriate to draw attention to the almost non-existent barriers to entry for foreign investors to the real estate market in Czechia. The return on investments in agricultural land is around 50 years for owners and 25 years for farmers who work the land [42].

3.5. Traded Farmland in the Czech Republic

Table 2. Traded farmland in the Czech Republic [49].

	2016	2017	2018	2019	2020	2021
Absolute traded area of agricultural land resources (ha)	102,900	95,300	77,200	65,700	63,500	81,600
Price of farmland according to IAEI 1/business contracts–CZK/ha	201,000	204,000	234,000	277,000	239,000	301,000
Total traded value (mil. CZK)	20,682.9	19,441.2	18,064.8	18,198.9	15,176.5	24,561.6

¹ Institute of Agricultural Economics and Information.

shows that the area of farmland that was traded between 2016 and 2020 decreased and that the lowest acreage of farmland sold was recorded in 2020, which might be connected with the COVID-19 pandemic, when personal contacts between sellers and buyers were significantly restricted by government regulations. In contrast, the average price of one hectare of farmland in those years increased (except for the year 2020, as mentioned above), which slowed down the decline in the total value of traded farmland. In 2021, farmland was in high demand, which led to a higher volume of sales/purchases as well as an increase in the market price. This resulted in the highest traded value in the period under review: CZK 24.5 billion.

3.6. Official Price of Farmland

The last general increase in official prices of farmland took place 7 years ago (by approx. 15%), and since then, these prices have remained at the same level. The difference between the official and market prices, thus, continues to increase. The increase in these official prices would also lead to an overall increase in the taxation of landowners.

According to ESEU, the average price for all of Czechia was 7.14 CZK/m², while the average market price of land (i.e., 25.4 CZK/m²) was 255% higher in 2020. Significant differences between the official price and the market price occur mainly for low-quality land, whereas for the land with the lowest quality, with the official price of up to 3 CZK/m², the market prices are up to nine times higher. On the contrary, for the best quality land with an official price above 15 CZK/m², the market prices are only double.

In 2021, the average price, according to ESEU, for all of Czechia was 7.13 CZK/m², while the average market price of land (i.e., 29.4 CZK/m²) was already 312% higher in 2021. The main reason for this disparity is the influence of the subsidy policy on the land market. Subsidies provided to an increased extent to farmers in disadvantaged regions balance out significant differences in the economics of farming in different production areas and, thus, actually distort the price of land.

3.7. Comparison of Farmland Prices between Czechia and the European Union

Despite the annual growth of the market prices of farmland, when compared to other EU countries, the market prices of farmland in Czechia are still very low (see Figure 6).

Farmland prices differ significantly in individual EU countries, even within neighboring regions. The reasons are the very diverse soil and climatic conditions, the very uneven acreage of farmland in relation to the number of inhabitants, the different business structures of agriculture, the different economic levels of individual states (and often even lower territorial units), and the different efficiency of agricultural enterprises. The amount of financial support from the state is also important [56]. Conditions resulting from legal regulations and the level of liberalization of the farm-land market also play a significant role.

From Figure 6 above, it follows that Czechia is among the countries with the lowest market price of farmland. The price of farmland in Czechia is even lower than in neighboring Poland or Spain.

However, despite this fact, the market prices of farmland in Czechia are increasing at a relatively fast pace every year. When compared to the Netherlands, which has the highest market price of farmland among the selected countries, the market prices of farmland in Czechia were 760% lower in 2019.

3.8. Comparison of the Number of Farms and Average Farm Areas in Czechia and the European Union

Czech agriculture is characterized by a very high average of land area per farm [57]. At present, farms in the Czech Republic are the largest in the European Union (see Figure 7). Competition and economic pressure on smallholder farmers over 10 years have caused the average acreage of a Czech farm to increase by over two-thirds to 133 hectares. This is eight times the EU average (16 ha). Almost all EU states, with the exception of Cyprus and Sweden, have experienced an increase in average acreage. There are currently 10,800,000 agricultural farms in the EU, and the average farm acreage is 16 ha [55].

As stated by Havel [52], “the estimated number of farmland owners in Czechia is 2.7 million”. Smaller farmers need to either receive subsidies from the state or make a profit; this is a problem for small farms [1]. The countries of the former federation are an exception not only in the EU but also in the former Eastern Bloc, which, like Czechoslovakia at the time, underwent a period of agricultural collectivization after the Second World War. The reason why the farms in Poland, Hungary, and Romania have low average acreage (Figure 7) is the fact that collectivization was either not as thorough or was abandoned in some countries [42].

It should be emphasized that two opposing tendencies collide in Czech agriculture. One of them is the concentration of agricultural enterprises into holdings, such as with Agrofert or the Spearhead company belonging to the J&T investment group. The opposite trend is the sale of land to smaller farmers. According to the estimate of Agro21, large companies will get rid of roughly 20,000 hectares per year in this way. This is also confirmed by the data of the Agricultural Association of Czechia, according to which the average domestic farm has shrunk by roughly one-fifth to 116 hectares over the past 10 years. When compared to 2016 (see Figure 7), it is currently lower by 17 ha, i.e., by 12.8%. The current subsidy policy of the state, which is mainly supported by the Association of Private Farming of Czechia and against which the Agrarian Chamber protested four times in 2022, is in line with this trend [53].

3.9. Land Market Research in Czechia

In order to determine the validity of both established hypotheses, the authors of the study collected current knowledge about the land market from professional publications (e.g., the Farmy.cz server [46]) and also conducted a research survey among landowners in a selected region of Czechia in October 2022. This research survey followed on from similar previous research carried out in October 2019.

The cadastral territory of Mýto u Rokycan in the Pilsen Region of Czechia was chosen by the authors for research among farmland owners who rent their land to the company ZBIROŽSKÁ, a.s.

Farmland owners who acquired land in the course of restitution or inherited it from their ancestors were asked the following questions (identical to the 2019 survey):

• Question no. 1: Are you considering the sale of your farmland, given its current market price in Czechia?
• Question no. 2: Under what conditions would you be potentially willing to sell the land?
• Question no. 3: Do you consider the collected rents to be adequate, considering the current market price of the land?
• considering the real payment possibilities of agricultural subjects (tenants)?

The answers of the 28 addressed farmland owners are summarized in

Table 3. Results of the survey among farmland owners.

Question	Question Content	Answer (2019)	No. of Answers	Answer (2022)	No. of Answers
1	Acceptance of current land prices	No	30	No	28
2	Conditions of potential sale	Difficult life situation or unavoidable property sale	30	Difficult life situation or unavoidable property sale	28
3a	Is rent adequate, considering the market price of farmland?	No	30	No	28
3b	Is rent adequate, considering the possibilities of agricultural companies?	No	20	No	18

.

Although they concern a regionally limited group of farmland owners, the above research findings correspond to the conclusions published in professional publications and on the Farmy.cz website.

One of the interviewed owners of farmland in the Mýto u Rokycan municipality summarized their position as follows: “My decision not to sell land in Mýto u Rokycan for the time being is due to the fact that the price of high-quality farm (arable) land, considering its limited scope and possible use for other purposes, will continue to rise significantly. If I decided to sell it, it would only be if, due to a difficult life situation, I needed money or funds to buy another investment. I consider the price of 340,000 CZK, which is currently offered by investors for the sale of one hectare of farmland, to be unacceptably low”.

3.10. Qualitative Factors Affecting the Market Price of Land

3.10.1. Care of Farmland

Care of farmland and sustainable agricultural production represent the absolute basis needed to retain water in the landscape. The starting point is new soil and water protection technologies in the agricultural sector based on precision farming methods. For example, farmers will be forced to rotate crops or reduce large areas of fields to prevent erosion. Those who bought large machines with subsidies or invested in biogas stations will not want to comply with textbook sowing procedures or limit industrial fertilizers. However, farmers have no choice. If farmers do not comply with the proposal to reduce the impact of the drought, they will have difficulty accessing European subsidies.

3.10.2. Compacted Soil

Irrigation systems, dams, or ponds are to be built, and existing ones are to be cleaned. “The key to combating drought is in agricultural and forestry land, that’s where the largest water reserve is”, according to the Ministry of Agriculture of Czechia [58].

It is precisely new water protection technologies that can help. So-called compacted soil contributes to the lack of water in the soil. Tractors and heavy machinery have created a layer under the ground in the fields, which makes it harder for water to soak in, and with it, erosion increases. In Czechia, it is estimated that half of the farmland is compacted in this way. Undermining can help with this, but it is much more expensive than plowing. In practice, it is not used much, the soil offers considerable resistance, and the technique is demanding in terms of fuel consumption.

3.10.3. Water Retention in the Landscape

The goal of the government’s plan to combat the drought is to retain as much water as possible in the landscape. Among other things, the construction of reservoirs, their interconnection, and the securing of water resources should contribute to this. Changes in the landscape will first be evident in the cleaned streams and rivers. Ponds will also be created or restored to serve as water reservoirs: “300 years ago there were around 75,000 ponds, today there are two thirds less” [58]. Over the past 100 years, a million hectares of wetlands and ponds have disappeared in Czechia. The total length of the river network was shortened by almost a third, the area of floodplains and wetlands decreased by 80%, the area of ponds decreased by 70% since the 17th century, and 270 thousand hectares of meadows and pastures were plowed. The Research Institute for Soil and Water Conservation states that up to a quarter of all farmland has been gradually drained for farming since the First World War [59].

Drainage pipes were found in the ground, which do not help today, and on the contrary, drain insufficient water. Regulating elements must be installed in the drainage so that the underground pipes can be closed and, thus, prevent the outflow of groundwater. Digging out old pipes from a depth of two meters would be enormously expensive, and in addition, the excavation work would harm the farmland even more.

A total of 50% of the soil in the fields is currently at risk of erosion in Czechia, which is why, in addition to the blinding of drainages and the construction of retention tanks, in the future, there will also be approaches to limiting the size of fields and a number of land improvements, which are intended to increase the amount of water retained in the landscape [60].

3.10.4. Agroforestry

Agroforestry in Czechia is now used to contribute to increasing biodiversity. In the middle of the fields in Czechia, in a few years, pines, oaks, hornbeams, lindens or elms, and poplars, as well as peach, apple, apricot, and cherry trees, might be seen more often. In addition to those mentioned, the supported types of trees also include walnut and almond trees, and according to the government regulation prepared by the Ministry of Agriculture, shrubs, two types of currants and gooseberries, also belong there. In addition, according to the state, woody plants should be used to help break up fields into smaller soil blocks and prevent water and wind erosion. With their roots and falling leaves, they increase the proportion of organic matter in the soil, and the change in soil structure improves water retention in the landscape. They contribute to reducing greenhouse gas emissions by absorbing carbon dioxide and storing carbon in the wood or soil. According to the professional literature, poplars can also be harvested for wood after 15 years, while walnut trees are cut later, up to around 30 years of age [61].

4. Discussion

4.1. Market Price of Land and Its Perspectives

The price of farmland is given not only by the supply and demand on the market or by its locality but also by the soil quality. Farmers’ investments in land can significantly enhance its quality and, consequently, its price. Fertile arable land, as indicated by the statistics, is much more valuable than lower-grade land (e.g., permanent grasslands).

The economist Lukáš Kovanda said that “investments in land ensure low but stable revenues, which means that even rich investors resort to investments in land in order to supplement their investment portfolio with a relatively very safe investment”. On the other hand, some investors may prioritize farmland as a lower-risk investment. This is down to subsidies. “Nowadays, agriculture is funded by subsidies in a substantial way. Subsidies are known for several years in advance. That is the basis for certainty of rent which farmers pay to the land owners”, added investor Pavel Ryska [62].

The findings made by Severová et al. [63] show that the situation for agriculture in the Czech Republic has improved mainly due to the increase in subsidies; higher interest has been shown by non-agricultural entities, and banks are changing their attitude to granting loans for purchases of farmland.

Lee [64] says that agricultural policy should be developed in a locally optimized way so as to effectively limit the transformation of farmland for urban use. The hop fields in North Bohemia serve as an example of such a policy. The goal of hop growers in the Czech Republic is to exceed the 5000 ha boundary of a hop field area. A possible future increase in hop field area will depend mainly on the possibility of purchasing land for modification and the planting of hop fields, as well as the willingness of landowners to lease the plots of land to hop-growing companies for at least 10 to 15 years [65]. This may be attributed to increased sales of high-quality lagers, for which the local, high-quality farmland in the area is suitable to produce. The quality of the beer, which is very popular in the American and Japanese markets as well, proves that if the income of the inhabitants grows, consumers can afford higher-quality and, at the same time, more expensive products, which is also shown by the results of the model titled “Consumer behavior on food markets” [66].

4.2. Redistributive Payments

The redistributive payment means that for each of the first 150 hectares of land, farmers will be able to get almost CZK 4000 extra, i.e., almost CZK 600,000 per farm. Just for a new identification number established, for example, for a family member, some farmers can earn CZK 3 million over the five-year subsidy period [53].

Some experts warn that the high payment for the first hectares can tempt farmers to enact formal tricks. According to Agro21, it will be necessary to motivate agricultural enterprises to divide companies between family members [50].

However, according to the State Agricultural Intervention Fund, the European Commission prohibits such procedures. The question is how will the potential purposeful division of farms will be controlled?

According to the Association of Private Farming of Czechia (APF CR), artificial division should not become a problem. It cannot be ruled out that this will happen, but it probably will not be a widespread issue. In fact, it is expected that farmers will have to state the reasons why the change took place in the case of dividing the farm. One could be the concurrence of organic and conventional production, which must be under two different CRN.

4.3. Reduction of Field Area

“Soil aggregation plays a critical role in the maintenance of soil structure and crop productivity” [67]. However, the division of fields into 30 hectares, which, from January 2021, applies to all, i.e., not only land at risk of erosion, should lead to a reduction in the risk of water erosion, as the length of the slopes will be shortened [60]. There are discussions about how effective this will be.

Some experts criticize the measure and say that fields should be reduced to 5 or 10 hectares. “Thirty hectares is still a large area, but it is a significant step forward. However, it is not possible to make such a significant change all of a sudden, because from the point of view of the farming system, it would be almost liquidating for many farmers”, says Prof. Vácha [60].

4.4. The Quality of Farmland and Its Impact on the Market Price

The quality of farmland (in addition to its quantity and location) is an important factor influencing its market price. It is given by its depletion, as well as by poor land management. In particular, as regards arable land, which provides the majority of crops for food production, its market price is significantly affected if it is subject to erosion, compacting, and other influences that have a negative impact on its quality. The following factors can improve land quality and contribute to an increase in its market price, leading to sustainable farming on farmland. This will prevent the land from becoming a subject of interest for the construction industry. A specific example in the Czech Republic is the aforementioned sustainable development of hop growing.

4.4.1. Trend of Drying out of the Landscape in Czechia

The drying trend of Czechia is quite clear and is caused by both climate change and the poor state of the landscape. The latter causes problems even if climate change did not exist. However, it is clear that this is the result of the impact of climate change; drought and floods are just different manifestations of the same problem.

It can be assumed, says Jiří Malík, a member of the Government Council for Sustainable Development, that “there will be a lot of rain, but rather it looks like we are in for longer and longer periods of time when there will be no rain”. In the landscape, there are about 70% deepened and straightened streams, which channelizes and dries them out but also allows for “deadly” flash floods. In addition, over 1.2 million hectares of farmland are deliberately drained by a melioration system [68].

“Once the soil is destroyed, a layer of about 40 to 65 cm is completely compacted with fine sediment and clay. Under its entire surface, it is impossible for anything to get underground during any rain, thus wells in Czechia are drying up and groundwater is also being lost”, adds Malík [68].

The melioration system drains the landscape very quickly and, at the same time, causes the rapid onset of floods because the water from the pipes is brought to one point at once. It is brought into a ditch where there used to be a stream with meanders and natural banks. Now the water in it rises quickly, flows away quickly, and, thus, has enormous energetic and then destructive consequences [68].

4.4.2. Effect of Soil Compaction

Land management in Czechia also causes a certain burden on the land. Since the 1960s, the situation has worsened, as technology has been driving through the fields for decades. It had to manifest itself somewhere. As stated by Prof. Radim Vácha, Director of the Research Institute for Soil and Water Conservation, “earlier it was plowed more often, and today minimization technologies are used more, when only the topsoil up to 20 to 30 cm is processed. When it rains, lagoons form or the water flows away because there is nowhere for it to soak. Compaction manifests itself especially in the deeper soil layer, the so-called subsoil, which cannot be reached by plows or harrows” [59].

The plow processes the soil to a depth of approximately 40 cm, where the soil is not yet so compacted. Undermining is offered as a possible solution, during which it is possible to reach a depth of about 50 cm. The soil is not turned, only plowed [60]. “In practice, it is not used much, the soil offers considerable resistance and the technique is demanding on fuel consumption. In addition, if the soil is not revitalized by incorporating organic matter or an additive to increase microbial activity and thus support the formation of the soil edaphone, including earthworms, the soil will quickly settle again”, adds Prof. Vácha [59].

4.4.3. Water Retention in the Landscape

There is no universal recipe for retaining water in the landscape. According to Shi et al. [69], “short-term heavy rainfall and rapid surface runoff are the important factors causing serious soil and water loss on a short time scale in a mountainous region”. As demonstrated by Wang et al. [70], “the tillage erosion effects on soil and water loss were closely related to rainfall patterns in hilly agricultural landscapes”. What will help at higher altitudes may not be effective at lower altitudes. “For example, in the lowlands, it is complicated to build expensive measures In the terrain to retain precipitation, when there is hardly any rain there. Or, in some places, we need a waterworks, not only to improve flows in times of drought, but also to hold back flood waves”, says Professor Žalud from Mendel University and mentions the possibilities of a gradual remedy. “First of all, it is necessary to divide the large soil blocks on the slopes so that the water does not run away. Furthermore, in some places, it is necessary to restore meanders, sow a bio belt or build a grove. And land improvements can help with this everywhere” [59].

A map of Czechia was drawn up, which suggests how to modify specific places so that the soil can cope with drought and torrential rains on its own. “It should also serve as a basis for the subsidy policy of the Ministry of Agriculture. There are management adjustments on some fields. For example, it would be good to grass some of them so that they are not used, for example, to grow corn”, explains Mark Rieder, head of the Water Research Institute and, at the same time, chairman of the government commission that deals with mitigating the effects of drought. According to him, the construction of balks and groves is also important.

The situation is also worsened by the quality of the soil, which was affected by the earlier land consolidation. “We have to prepare for a more extensive drought, even though there isn’t one at the moment. The question is not whether such a drought will come. In the horizon of several years, it is a certainty”, comments Miroslav Trnka [58].

4.4.4. Agroforestry

However, according to Vladimír Picha [1], spokesman for the Agricultural Association of Czechia, in the case of agroforestry, it is not a universal solution that could be applied frequently. “Especially on pastures, it is a suitable supplement, when trees provide protection for grazing animals from direct sunlight. We see the use of this method in farming on arable land as problematic, but it is a voluntary decision of the farmer whether they are able and willing to tolerate limitations in the form of having to go around obstacles in the field”, said Picha.

The Agrarian Chamber of Czechia then adds that agroforestry is starting to be promoted abroad as well and has its clear advantages. It includes a combination of both traditional and rarer types of wood species.

“The goal is not to increase the yield in terms of wood material, but to care for the landscape and preserve its natural properties for future generations. We welcome the new subsidy title for the support of agroforestry systems, but it should be more attractive and flexible for farmers”, pointed out the President of the Agrarian Chamber of the Czech Republic, Jan Doležal [71]. According to him, it should take into account the specifics of individual regions more; the program assumes that it will be possible to apply the same methods anywhere.

The question remains whether similar activities are sufficient when it comes to the number of trees in Czechia. According to fruit growers, around a million trees in Czechia will be cut down or not restored due to the low purchase prices of apples. In 2023 alone, fruit growing is expected to decrease by 10% in cultivation areas, and that is more than how many agroforestry systems will be added during the current subsidy period up until 2027 [61].

4.5. Evaluation of Hypotheses and Resulting Implications for Sustainable Development

As is proven by the above analysis of farmland price development and the economic behavior of farmers in Czechia, it can be stated that the validity of both hypotheses defined in the Introduction was confirmed.

4.5.1. Recommendations for Investors, Farmers, and Agricultural Firms

It involves adopting new rules for managing farmland in the metropolis of Prague [65], which consists of dividing large fields into small fields with a maximum size of five hectares. It also involves the creation of grass balks, the planting of fruit and leafy tree lines, the adjustment of sowing procedures in favor of greater variety, and the preference for crops for which cultivation does not increase soil erosion. “In order to achieve a higher quality of farmland management, farmers can be advised to alternate the use of farmland for growing crops and grazing” [42].

The subsidy conditions of the so-called good agricultural and environmental condition of the soil (GAEC) specify which cycle of organic matter to follow, and this orders the farmer to supply organic matter, at least in the form of catch crops or by plowing post-harvest residues. The soil is significantly enriched, for example, by plowing in rapeseed residues. If someone does not comply with the measures, they will lose part of the subsidies. Some technologies, such as sowing in strips, can also reduce erosion; it helps with corn. The said anti-erosion decree introduces sanctions for irresponsible farmers and should punish repeated cases [60].

The above-mentioned entities can participate in many programs that are financially supported by the state:

• They have more than CZK 18.5 billion to help them with this from the Ministry of Agriculture, which plans to invest the money in the fight against drought over the next 6 years [58]. Czechia will receive the most money for measures against drought from European funds. The rest will be paid from state money, and part will be paid by private investors or farmers, municipalities, or state-owned Povodí companies;
• The state will spend CZK 34 billion on land improvements in Czechia over 10 years. The Ministry of Agriculture has already allocated funds for the period up to 2030 for land improvements. Specifically, CZK 26 billion for expenses and CZK 5 billion for land purchases. Altogether, 1500 projects are to be developed in the whole of Czechia by the aforementioned year, 2030 [49];
• The Ministry of Agriculture of Czechia will also launch a new subsidy program in 2023, which will support the planting and maintenance of trees in fields and meadows. By 2027, CZK 124 million will be provided by European and national streams of money for so-called agroforestry. Thanks to this, around 180 hectares of new agroforestry systems should be established annually [61];
• The money will be paid in subprograms in two forms: as a one-time contribution for the establishment of an agroforestry system or a multiyear contribution for the maintenance of an established agroforestry system. The maintenance obligation is for a period of 5 years, during which checks will be carried out by the paying agency. The authority assumes that farmers will continue to grow trees even after the end of the support. The agroforestry system has both an economic benefit for the applicant and a benefit for the quality of the agricultural areas they manage with regard to the environment [49].

4.5.2. Recommendations for the Government

Spatial planning, when decisions are made about what and where can be built, must become a soil protection tool. In particular, the effort will be to limit the occupation of quality farmland in the highest protection classes. One of the tools that can also be considered is an absolute ban on removing the best quality (highly fertile) soil from the soil fund.

4.5.3. Recommendations for Landowners

Unlike a tenancy agreement, a usufructuary lease agreement allows the landowner to demand (from the farmer) a way of farming that does not reduce the value of the owner’s property. In this way, without specific laws, erosion can be defended across the board, as there are approximately 2.7 million small landowners in Czechia, i.e., practically every other person of working age [52].

This is mainly about the will of the owners to enter into such contracts and also to check their fulfillment. Even the best usufructuary lease agreement will not prevent the excessive loss of land from the fields if the owner does not at least occasionally monitor the way their land is managed. It is not only in their interest but also in the interest of the Czech landscape.

4.5.4. Research Implications

As part of economic research in the future, it will be necessary to deal with the issue of the level of the farmland price due to its decrease for construction purposes and the deterioration in quality due to climate change and the poor state of the landscape (erosion, drought, etc.) in Czechia. The loss of farmland as a result of the aforementioned influences affects the market supply of farmland and, thus, the price of farmland in Czechia. For this purpose, it would be appropriate to verify the applicability of subsidies from the good agricultural and environmental condition of the soil and to what extent this can contribute to influencing the price of farmland.

The so far unresolved problem of the Czech land market is ensuring access to land for young people interested in agricultural business, who, although they have an agricultural education, do not have farmland at their disposal and do not even have relatives from whom they could take over land in the future.

4.6. Limitations of the Research

• The research limitations include similar land characteristics and country profiles in Central or Eastern Europe;
• We can only name the main factors outside of the evaluated soil ecological unit system, which, in our opinion, affect the market price of farmland.

5. Conclusions

The market price of farmland is one of the significant factors in the sustainable development of agriculture in Czechia. Research has shown that the market price of farmland is influenced by some economic and social factors:

• The location of plots of land within cadastral offices;
• The quality of the soil of the plot;
• The amount of the usufructuary lease or the terms of the tenancy agreement;
• Total plot acreage;
• The competition from buyers in a particular location.

The market prices of farmland in Czechia increased every year in the monitored 16 years due to different influences. In 2016 alone, its price in Czechia increased by a record 25.5%. The price of a square meter in 2021 was CZK 29.4 (USD 1.35), which represents a year-on-year increase of 16.1%. In 2004, the market price of farmland was less than CZK 7 (USD 0.272). The total value of farmland in Czechia has risen to CZK 940 billion (USD 40.99 billion) in recent years.

According to the results of the statistical analysis and the opinions of experts, it is possible to assume a constant increase in the prices of farmland precisely because of the ever-decreasing acreage of land intended for agricultural production. Another factor for the increase in prices can be increased inflation.

However, despite the annual increase in the average market price of farmland, Czechia is still among the cheapest in the European Union from this point of view. Related to this fact is the problem of the annual loss of both farmland and arable land. In the period 2015–2020, 2346 ha of farmland decreased on average; arable land showed an average decrease of 8489 ha. The main cause of such alarming decreases is the conversion of these lands for non-agricultural purposes, e.g., industrial and residential construction, the extraction of raw materials, or the construction of the transport network.

Roughly two-thirds of the farmland in Czechia is affected by varying degrees of erosion risk in terms of both water and wind erosion. The loss of soil from fields, the cause of which is erosion, cannot be completely prevented, but nevertheless, a large part of the Czech population has had a means at their disposal for many years to at least partially prevent this phenomenon: usufructuary lease agreements between the landowners and tenants of this land, i.e., farmers [52].

It is reported that about 50% of the farmland in Czechia is threatened by water erosion, and the share of land threatened by wind erosion has also increased, based on long-term continuous observations, from an estimated 10 to 15 to 20%. The number of erosion events reported to the erosion monitoring system has tended to increase. This has two main causes. On the one hand, we have the course of the weather: in 2020, it rained significantly more than in previous years, and on the other hand, there is significant motivation for reporting. This fulfills the principle of the methodology, which provides (for the reassignment of locations) information on where erosion occurs repeatedly to a higher protection class.

The price of farmland is also directly related to the loss of farmland. Since Czechia has long been one of the countries with the cheapest farmland, investors take advantage of this opportunity and buy farmland for the purpose of either further tenancy or for non-agricultural purposes. This rate of land loss is indeed alarming, given the importance of land to human sustenance.

However, it is not only that the land used for growing crops is decreasing. In addition to land loss, there is also long-term soil contamination from industrial activity and accelerated erosion. The reason for these serious problems is not only the careless treatment of the environment (constant violations of spatial plans by investors) but also the low social awareness of the importance of this wealth.